Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. The acknowledgment last week by the US that huge tariffs against China are unsustainable was a significant de escalation and the trade war started by the Trump administration. But just one hundred days in the White House has seen the US President shake up global trade and that in turn has had an impact on the election here and in Canada as well. Joining me now is Professor Tim Harcourt from the Institute of Public Policy and Governance at UTS and host of course of the Airport Economist and Footy Nomics. Tim is also a former Chief Economist at the Australian Trade Commission. He joins me in the studio this morning. Tim, welcome back to Fear and Greed.

Welcome to the Fear and Greed Business Interview. I'm Sean Aylmer. The acknowledgment last week by the US that huge tariffs against China are unsustainable was a significant de escalation and the trade war started by the Trump administration. But just one hundred days in the White House has seen the US President shake up global trade and that in turn has had an impact on the election here and in Canada as well. Joining me now is Professor Tim Harcourt from the Institute of Public Policy and Governance at UTS and host of course of the Airport Economist and Footy Nomics. Tim is also a former Chief Economist at the Australian Trade Commission. He joins me in the studio this morning. Tim, welcome back to Fear and Greed.

Good to be back here.

Good to be back here.

So Tim, I reckon, you spent most of your life arguing against tariffs. What's a man like you do in a year like twenty twenty five.

So Tim, I reckon, you spent most of your life arguing against tariffs. What's a man like you do in a year like twenty twenty five.

Isn't it incredible? You know, particularly when I was at the IC to you and most people were still protectionists, and I'd say, well, you know, tariffs are bad for workers. You know, exports paid better wages, better health and safety, provide more jobs, you're better off been for an open economy for a country like Australia, And none of them believed me. They called me a free trader and this and that. Now all of a sudden because Donald Trump has brought in tariffs there against them, so ironically I'm now in favor, but I'm at an unfortunate cost for the world economy.

Isn't it incredible? You know, particularly when I was at the IC to you and most people were still protectionists, and I'd say, well, you know, tariffs are bad for workers. You know, exports paid better wages, better health and safety, provide more jobs, you're better off been for an open economy for a country like Australia, And none of them believed me. They called me a free trader and this and that. Now all of a sudden because Donald Trump has brought in tariffs there against them, so ironically I'm now in favor, but I'm at an unfortunate cost for the world economy.

So is there any sense behind Trump's tariff argument.

So is there any sense behind Trump's tariff argument.

I think the problem for people like you and II Sean is we try and see it into of economics, into the economic policy, but it's not. It's about power, and it's about how he negotiates. So as a property developer, he grabs something, whack it on the table, and then gets you to negotiate it off. And so what I think he wanted to do was to basically whack on all these tariffs for all sorts of reasons and then get everyone to come to him to get him off, you know. And we saw those funny memes of the penguins going to the White House to negotiate the tariffs off. And so I think it's part of I'm going to make myself the sense of the world trading system instead of the world Trade organization in Geneva. So it's all about negotiating an attactic not really bad economics doesn't work because in a sense I dare say, where we end up is we will end up when in Australia or have a ten percent tariff, probably China'll have forty fifty sixty percent tariffs.

I think the problem for people like you and II Sean is we try and see it into of economics, into the economic policy, but it's not. It's about power, and it's about how he negotiates. So as a property developer, he grabs something, whack it on the table, and then gets you to negotiate it off. And so what I think he wanted to do was to basically whack on all these tariffs for all sorts of reasons and then get everyone to come to him to get him off, you know. And we saw those funny memes of the penguins going to the White House to negotiate the tariffs off. And so I think it's part of I'm going to make myself the sense of the world trading system instead of the world Trade organization in Geneva. So it's all about negotiating an attactic not really bad economics doesn't work because in a sense I dare say, where we end up is we will end up when in Australia or have a ten percent tariff, probably China'll have forty fifty sixty percent tariffs.

Is there? I mean doesn't work to us in a sense that he starts this incredible and negotiating position and then we all come to something that's a bit fairer. Or are we actually forgetting the wood from the trees here and saying we just shouldn't have tariffs?

Is there? I mean doesn't work to us in a sense that he starts this incredible and negotiating position and then we all come to something that's a bit fairer. Or are we actually forgetting the wood from the trees here and saying we just shouldn't have tariffs?

Well, you know, a first best world, you wouldn't. A second best world you get them off unilaterally or multilaterally. And unfortunately, a third best world is when countries do it bilaterally like we're seeing here. I got to say, though, everyone being very upset about Trump and the United States, China did China started this? Yeah, I mean China put the tariffs on Australia two hundred and twenty percent on wine, where you know Trump it's ten percent. Over the fact, we had the audacity to call for an inquiry into COVID so that we wouldn't perhaps have another pandemic and we knew how to deal with and they put tariffs on us for geopolitical reasons. And in some ways, you know, Trump saw this as you can use tariffs as a weapon over immigration or fetanoh or whatever you like free speech, because he saw Jijiping do it to Australia over an inquiry into COVID. So in some ways China started this and Trump has escalated it.

Well, you know, a first best world, you wouldn't. A second best world you get them off unilaterally or multilaterally. And unfortunately, a third best world is when countries do it bilaterally like we're seeing here. I got to say, though, everyone being very upset about Trump and the United States, China did China started this? Yeah, I mean China put the tariffs on Australia two hundred and twenty percent on wine, where you know Trump it's ten percent. Over the fact, we had the audacity to call for an inquiry into COVID so that we wouldn't perhaps have another pandemic and we knew how to deal with and they put tariffs on us for geopolitical reasons. And in some ways, you know, Trump saw this as you can use tariffs as a weapon over immigration or fetanoh or whatever you like free speech, because he saw Jijiping do it to Australia over an inquiry into COVID. So in some ways China started this and Trump has escalated it.

I mean, we're always seeing embargoes against Russia, against countries in the Middle East, so it's kind of all in that same sphere. What about the politics of it, particularly for Australia.

I mean, we're always seeing embargoes against Russia, against countries in the Middle East, so it's kind of all in that same sphere. What about the politics of it, particularly for Australia.

Well, I think the reason that Anthony Albereesi's in such a strong position in the election is for three reasons Trump, Trump and Trump, you know, I mean, I mean late last year the opposition was doing reasonably well and Albo was you know, he was being prompted by his and persuaded by his colleagues to put off the election. And then the psychle On Alfred came in, but he delayed and is in a much stronger position since Donald Trump returned to the White House. And you know, we've seen a similar case with Mark Carney in Canada, I mean the Liberal Party in Canada under Justin Trudeau had been in for a decade. They are in trouble. Mark Carney, central banker, former central banker, lot you and I hasn't even got a seat world changer. It's even got a seat. And he becomes the Prime minister and everything changes. So maybe we should have stayed at the Reserve Bank. Sure we might might have been where he is.

Well, I think the reason that Anthony Albereesi's in such a strong position in the election is for three reasons Trump, Trump and Trump, you know, I mean, I mean late last year the opposition was doing reasonably well and Albo was you know, he was being prompted by his and persuaded by his colleagues to put off the election. And then the psychle On Alfred came in, but he delayed and is in a much stronger position since Donald Trump returned to the White House. And you know, we've seen a similar case with Mark Carney in Canada, I mean the Liberal Party in Canada under Justin Trudeau had been in for a decade. They are in trouble. Mark Carney, central banker, former central banker, lot you and I hasn't even got a seat world changer. It's even got a seat. And he becomes the Prime minister and everything changes. So maybe we should have stayed at the Reserve Bank. Sure we might might have been where he is.

You might have been. I'm sure I wasn't. Future made in Australia. That policy, Wow, does it makes.

You might have been. I'm sure I wasn't. Future made in Australia. That policy, Wow, does it makes.

Sense well in some way. In some ways it does because you don't want to go around jacking tariffs up again. But I think what we learned through COVID is that you can't have everything offshore for geopolitical security reasons. You don't want to have everything on shore either, so you do need to diversify a bit. And there are things in manufacturing, and I'm not talking about textile clothing and footwear and so on, but there are certain things in manufacturing and Australia does do reasonably well and you can give reasonable support, which is instead of putting up tariffs and putting in foreign investment, restrictions, and I think every country in the world has something similar. They might not call it exactly the same thing as that catchy future Made in Australia tagline, but I'm sure they have something reasonably simple.

Sense well in some way. In some ways it does because you don't want to go around jacking tariffs up again. But I think what we learned through COVID is that you can't have everything offshore for geopolitical security reasons. You don't want to have everything on shore either, so you do need to diversify a bit. And there are things in manufacturing, and I'm not talking about textile clothing and footwear and so on, but there are certain things in manufacturing and Australia does do reasonably well and you can give reasonable support, which is instead of putting up tariffs and putting in foreign investment, restrictions, and I think every country in the world has something similar. They might not call it exactly the same thing as that catchy future Made in Australia tagline, but I'm sure they have something reasonably simple.

But it is about That's about picking winners, though, isn't it.

But it is about That's about picking winners, though, isn't it.

It's about providing the right conditions so that winners pick themselves. But to some extent, yeah, I think it's given assistance to some in a way.

It's about providing the right conditions so that winners pick themselves. But to some extent, yeah, I think it's given assistance to some in a way.

You could be Mark Garney. I said, is that about picking winners? And you said, it's providing assistance so those picked themselves.

You could be Mark Garney. I said, is that about picking winners? And you said, it's providing assistance so those picked themselves.

I've learned a bit from him, I think the last few weeks. So with me.

I've learned a bit from him, I think the last few weeks. So with me.

Tim will be back in a minute. I'm speaking to you Professor Tim Harcourt from the University of Technology, Sydney and host of the Airport Economist. So with all this going on internationally, how important is it for Australia to take the opportunity to do a free trade agreement with Europe if at all possible, to look to Asia to improve our relations with them. It's not like we're big trading partners with the US anyway, I mean, apart from a few products. But is it an opportunity for Australia to reach out to other countries.

Tim will be back in a minute. I'm speaking to you Professor Tim Harcourt from the University of Technology, Sydney and host of the Airport Economist. So with all this going on internationally, how important is it for Australia to take the opportunity to do a free trade agreement with Europe if at all possible, to look to Asia to improve our relations with them. It's not like we're big trading partners with the US anyway, I mean, apart from a few products. But is it an opportunity for Australia to reach out to other countries.

It's a good point. I mean, with America, it's really an investment partner and many of our big companies are based there. With Europe, it's interesting. Europeans were the famous protectionists when the cost of the Common Agricultural Policy you could send all the cows from France around the world twice on business class, you know, and we knew it was inefficient. The Europeans now need friends, you know. They're now doing deals with Mark Carney, They're now coming back to the table with Don Farrell. So I think Europe will be more positive now than it used to be. What I'm interested in and the other and easy government's done this to some extent, is to look at Asian, to look at India, to look at our Northeast Asian friends, you know, Taiwan, South Korea, Japan, those places that are hungry for energy. They've got a demand for food and agriculture and a lot of the things that Australia does very well.

It's a good point. I mean, with America, it's really an investment partner and many of our big companies are based there. With Europe, it's interesting. Europeans were the famous protectionists when the cost of the Common Agricultural Policy you could send all the cows from France around the world twice on business class, you know, and we knew it was inefficient. The Europeans now need friends, you know. They're now doing deals with Mark Carney, They're now coming back to the table with Don Farrell. So I think Europe will be more positive now than it used to be. What I'm interested in and the other and easy government's done this to some extent, is to look at Asian, to look at India, to look at our Northeast Asian friends, you know, Taiwan, South Korea, Japan, those places that are hungry for energy. They've got a demand for food and agriculture and a lot of the things that Australia does very well.

I mean, you are the airport economists, and I know you've been to some of those countries recently. Are they interested in Australia. What do they see Australian offer them.

I mean, you are the airport economists, and I know you've been to some of those countries recently. Are they interested in Australia. What do they see Australian offer them.

I was just in India in Bengalaru, Bangalore and Chennai, and of course they're interested in Australian innovation and India gives them scales, you know. So I had a small chemicals company called Callington that provides different chemical services for aircraft. They're based in Chennai and they can serve us all of India and Qatar and the Middle East and be based in that port city. Bangalore, India has an incredible space program and Space Machines is a startup based at uts actually at Botany, and it basically is like the NRMA for satellites. So if your satellite breaks down, Space Machines will come and fix it. So they've got it. They're based in Bengalaru at the sort of the hub of Indian space. So I think there's I think there's opportunities there. And I was also in Taiwan last year and what I noticed was that there's a lot of Taiwanese investment in southern India, in Bengalaru, in semiconductors and in ai because Taiwan is also thinking about this brave new world and where they want to diversify their their production. And we heard of course that you know, Apple's moved sixty percent of its production from China to India. So obviously India and Taiwan are making a bit of a play there and that's quite good news for Australia.

I was just in India in Bengalaru, Bangalore and Chennai, and of course they're interested in Australian innovation and India gives them scales, you know. So I had a small chemicals company called Callington that provides different chemical services for aircraft. They're based in Chennai and they can serve us all of India and Qatar and the Middle East and be based in that port city. Bangalore, India has an incredible space program and Space Machines is a startup based at uts actually at Botany, and it basically is like the NRMA for satellites. So if your satellite breaks down, Space Machines will come and fix it. So they've got it. They're based in Bengalaru at the sort of the hub of Indian space. So I think there's I think there's opportunities there. And I was also in Taiwan last year and what I noticed was that there's a lot of Taiwanese investment in southern India, in Bengalaru, in semiconductors and in ai because Taiwan is also thinking about this brave new world and where they want to diversify their their production. And we heard of course that you know, Apple's moved sixty percent of its production from China to India. So obviously India and Taiwan are making a bit of a play there and that's quite good news for Australia.

Is India as bureaucratic as it used.

Is India as bureaucratic as it used.

To be, not anymore? Not? I mean I went to the Tatar campus in Chennaia, the Tata Consultancy Services and can you imagine, you know, they now have digital passports in India that you don't use cash, you know, thirty years ago, and I went there on my tiktook. I was pulling I was ripped off in India thirty years ago, probably were, but I was pulling packets of rupees. You don't use cash in India now, and so you know, a villager, you know, a villager will pay for his groceries using his phone, you know. So it's quite different. And Tata's extraordinary because they're you know, famous all over the world and they're working with Australian companies here. And you go through the usual past, the sacred cows and the tiktooks and all the all the craziness in color of India and when you hit this space age campus on the outskirts of Chennai, so quite quite an extraordinary scene, so very different than it used to be India.

To be, not anymore? Not? I mean I went to the Tatar campus in Chennaia, the Tata Consultancy Services and can you imagine, you know, they now have digital passports in India that you don't use cash, you know, thirty years ago, and I went there on my tiktook. I was pulling I was ripped off in India thirty years ago, probably were, but I was pulling packets of rupees. You don't use cash in India now, and so you know, a villager, you know, a villager will pay for his groceries using his phone, you know. So it's quite different. And Tata's extraordinary because they're you know, famous all over the world and they're working with Australian companies here. And you go through the usual past, the sacred cows and the tiktooks and all the all the craziness in color of India and when you hit this space age campus on the outskirts of Chennai, so quite quite an extraordinary scene, so very different than it used to be India.

What about Indonesia? How big an opportunity is that? So many people, so many people. It's interesting with Indonesiaca. It's always very close to us. And when I was at Australia, I found we had more exporters going to do Bai than say Indonesia. And Indonesia's really like your Brazil's, like the United States. Big domestic market was never seen as a low cost sort of production place like the rest of parts of Southeast Asia. It was always an internal domestic market and that's what the Indonesian story is. But I think for Australia, ties with defense and education is pretty good. And you know we have at uts, we have you know, startup programs with Asian that are centered on Indonesia. So yeah, a big country with an amazing middle class, you're going to get those opportunities. When's the next book you've had? You said off air, you said, what seven sort of eco trade books? One footy book, which one's old?

What about Indonesia? How big an opportunity is that? So many people, so many people. It's interesting with Indonesiaca. It's always very close to us. And when I was at Australia, I found we had more exporters going to do Bai than say Indonesia. And Indonesia's really like your Brazil's, like the United States. Big domestic market was never seen as a low cost sort of production place like the rest of parts of Southeast Asia. It was always an internal domestic market and that's what the Indonesian story is. But I think for Australia, ties with defense and education is pretty good. And you know we have at uts, we have you know, startup programs with Asian that are centered on Indonesia. So yeah, a big country with an amazing middle class, you're going to get those opportunities. When's the next book you've had? You said off air, you said, what seven sort of eco trade books? One footy book, which one's old?

Best foot nomics? Yeah, footy nomics is outpaced all the other trade books, believe it or not. And if it wasn't for Donald Trump, I don't think i'd be able to talk try as much in the media. So yeah, I did economics as sport for a bit of a bit of fun and also been at sports nut like most Australians. But I found it fascinating. Not only you know our summer sports like cricket that are so big in the IPR and there's so much investment in Australia, but the fact that we have four footy codes for football codes in Australia, you know, with the demand for talent and fans and broadcastings extraordinary. Most countries have just soccer or maybe soccer and rugby union, but we have four so makes it quite a Does it work. I think it does and the consumer wins because you get so much choice, that's true. Tim, Thank you for talking to Fear and Greed. Thank you.

Best foot nomics? Yeah, footy nomics is outpaced all the other trade books, believe it or not. And if it wasn't for Donald Trump, I don't think i'd be able to talk try as much in the media. So yeah, I did economics as sport for a bit of a bit of fun and also been at sports nut like most Australians. But I found it fascinating. Not only you know our summer sports like cricket that are so big in the IPR and there's so much investment in Australia, but the fact that we have four footy codes for football codes in Australia, you know, with the demand for talent and fans and broadcastings extraordinary. Most countries have just soccer or maybe soccer and rugby union, but we have four so makes it quite a Does it work. I think it does and the consumer wins because you get so much choice, that's true. Tim, Thank you for talking to Fear and Greed. Thank you.

It was Professor Tim Harcourt from the Institute of Public Policy and Governance at UTS and host of the Airport Economists and Footy Nomics. This is the Fear and Greed Business Interview. Join us every morning for the full episode off Fear and Greed. Business news for people who make their own decisions. I'm Chane Elmer. Enjoy you day.

It was Professor Tim Harcourt from the Institute of Public Policy and Governance at UTS and host of the Airport Economists and Footy Nomics. This is the Fear and Greed Business Interview. Join us every morning for the full episode off Fear and Greed. Business news for people who make their own decisions. I'm Chane Elmer. Enjoy you day.