Low dollar, falling stockmarket: What the US-China trade war means for Australia

The Australian dollar at three-year lows; our stockmarket falling fast.

It’s doesn’t seem such a positive story. But it can also be easily explained by just two words: trade war.

The problem is that Australia’s result in the peace might be worse than the current situation.

That’s because the trade war is all about the negotiation between the world’s two super-powers, the United States and China.

So while the war feels very real right now as they jockey for their respective positions, what comes with the peace will have more consequences for our farmers and exporters.

That’s because, right now, Australia enjoys unparalleled access to both the Chinese and US markets through our free-trade agreements.

Because of our strategic positions with these countries, they are some of the most generous trade deals they offer.

Witness, for example, the enormous strides the wine industry has taken since the China FTA was signed. Or the enormous growth in Australian education institutions that have established in China. Healthcare and aged care are other examples of service based industries that have benefited.

But when it comes to the settlement of this trade war, understand that Australia will not features strongly in the negotiations.

It will be inconsequential, and may well suffer as a result.

So while the headlines right now are dominated by the tough talk from Donald Trump and the retaliatory actions of President Xi and the Chinese foreign affairs spokesman, remember that Australia perhaps should fear the peace more than the war.