April 8, 2025 • 5 mins
Sarah Megginson (@moneymargarita) explains the Tariffs and how they will affect everyday Aussies.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
In simple morning, good morning.
Speaker 2 (00:02):
When we need to talk money, we talk to you
because you actually spell it out really simply for all
of us. But everyone's going on about the tariffs America.
There's been huge drops on the share market and it
is actually going to be affecting every day Australians. Can
you unpack it?
Speaker 1 (00:17):
For us? It is? And I think the best way
to think about a tariff is to just call it
a tax, because that's what it is. And basically Trump
has introduced these giant taxes. They are going to impact us,
They're going to impact the entire global economy. It's all
a little bit chaotic, and I think at times like
this we can feel a bit stressed by because it
(00:37):
is just like filling up our new feeds. It's on
the news, it's in our social media, it's everywhere, and
it can make you really panic. So the best thing
to do is just kind of block out the noise.
It's always my advice. Block out the noise and try
to just focus on those things that impact you. And
in Australia, nothing is impacting us yet it will as
of well, sorry I should say, our superannuation is absolutely
(00:59):
taking a hit. And if you're exposed in the stock
market that's taking a hit. But also those investment classes
are designed to be long term. They're designed to withstand
ups and downs in the market. So unless you're needing
to access his supermarket, sorry sip granuation this month or
this year, try not to check your balance, try not
to be too concerned about it, and block the noise out.
Speaker 2 (01:20):
Okay, So if you're getting money from your super now,
it's going to affect you. So that's a it is
a generation of Australians, it will be affecting absolutely.
Speaker 1 (01:29):
And to be clear on what is actually happening, basically,
Trump wants to encourage American companies to bring business back
into America. And the way he pitched this during the
election was We're going to put these tariffs on there
and it's going to make it more expensive for these
other countries to do business with us. And he explained
it in such a way and people believe them that
(01:51):
these other countries are going to pay to do that,
and it's just not how it works. If you you know,
you look at your husband, m he runs mold men.
If someone said to him, Hey, I really want you
to come and work on our building, and deal with
all the mold there. But we're going to charge you
a twenty five percent tax to come and do that
work for us. That just doesn't make sense. So what
(02:12):
these countries have done in retaliation is they've then added
attack their own tariff back. So it's just going to
make everything more expensive globally. It is going to impact
us if it stays the course like this. Of course,
now all these countries are entering into huge negotiation periods
of Trump. In Australia we don't really have much to
negotiate with him. Our biggest kind of streach in this
is our beef experts. The US buys around three billion
(02:35):
dollars worth of beef here. I actually didn't know, but
McDonald's over there is one of our biggest buyers of
Australian beef because it's such good quality. There are going
to be impacts in terms of data day things that
we use like phones and electronics and things could get
more expensive, Cars could get more expensive. But the bigger
issue is that this is likely to slow down the
whole global economy, and one of the impacts of that
(02:58):
is likely to be if we have a slow down
in the economy, that is when the RBA usually steps
in and starts to try to stimulate our economy by
lowering interest rates, and people might be excited about that.
They might think, Okay, that's a really good side effect
of this, My interest rates are going to come down,
and in fact, some predicting we might actually get a
double rate cut in May, a point five percent cut.
(03:20):
That is does feel like a good thing. But if
the economy does really slow down, there's no guarantee that
the banks are actually going to pass on these rate
cuts in full. Because when the economy slows and there's
less transactions happening, there's less business loans happening, there's less
lending and less credit card spending, and all of these
ways that banks make money will start to slow down.
(03:40):
So that's what we saw after the GFC, where we
would have interest rate cuts and banks wouldn't pass them on,
or that only pass part of those cuts on. So
it's kind of not a reason to celebrate. I don't
think we're celebrating any of this yet. I do think, though,
just try not to get too involved in it and
disheartened by it. Unless it's impacting you your close retirement,
you're worried about your supers, then of course engage with it.
(04:03):
But if it's more just this news that's happening around you,
try to you know, life is just going to continue
on as usual here and there is going to be
a period of weeks or months of negotiating and change
that happens from here. So we will just kind of
watch it all unfold.
Speaker 2 (04:18):
Sarah, Thank you, you did make it clear.
Speaker 1 (04:21):
Thank you so much.
Speaker 3 (04:22):
Guys you don't remember what your care Yeah, you got
red in me.
Speaker 4 (04:33):
That I don't quite know how you're trying to express yourself.
Is it because it's the end of the show, because.
Speaker 2 (04:46):
More living a rate cut might be.
Speaker 3 (04:49):
You know, that's part of the reason why I reckon
he's doing it. He wants to see himself as the king,
and everyone is trying to fight hard to not have
these tariffs, so he bringing them to the table. But
it's almost like the old movies where you see the
kings standing there and the peasants come in with three
pigs and they go, this is our offering to you
know what I mean. It's negotiation, but he wants to
(05:11):
be the one that I'm the king, it's the king maker.
He's making himself, the king, what do you want to
talk about? I won't give you this much of the
tariffy if you do this.
Speaker 4 (05:20):
Yeah, he's just.
Speaker 3 (05:21):
Going hard early so he can negotiate.
Speaker 2 (05:23):
But then parts of it are not crazy, because all
countries should be self sufficient, right and be able to
have and support our own produce and our own product
and our own manufacturing.
Speaker 3 (05:32):
So there's well, we let go of it through greed.
Speaker 2 (05:35):
We didn't all greed be poor and yeah, happy.
Speaker 3 (05:41):
We start making a t shirt business and going to
China and saying can you do this?
Speaker 2 (05:47):
Crazy ideas we always come up with you and never
do anyway. By everyone,
In simple morning, good morning.
Speaker 2 (00:02):
When we need to talk money, we talk to you
because you actually spell it out really simply for all
of us. But everyone's going on about the tariffs America.
There's been huge drops on the share market and it
is actually going to be affecting every day Australians. Can
you unpack it?
Speaker 1 (00:17):
For us? It is? And I think the best way
to think about a tariff is to just call it
a tax, because that's what it is. And basically Trump
has introduced these giant taxes. They are going to impact us,
They're going to impact the entire global economy. It's all
a little bit chaotic, and I think at times like
this we can feel a bit stressed by because it
(00:37):
is just like filling up our new feeds. It's on
the news, it's in our social media, it's everywhere, and
it can make you really panic. So the best thing
to do is just kind of block out the noise.
It's always my advice. Block out the noise and try
to just focus on those things that impact you. And
in Australia, nothing is impacting us yet it will as
of well, sorry I should say, our superannuation is absolutely
(00:59):
taking a hit. And if you're exposed in the stock
market that's taking a hit. But also those investment classes
are designed to be long term. They're designed to withstand
ups and downs in the market. So unless you're needing
to access his supermarket, sorry sip granuation this month or
this year, try not to check your balance, try not
to be too concerned about it, and block the noise out.
Speaker 2 (01:20):
Okay, So if you're getting money from your super now,
it's going to affect you. So that's a it is
a generation of Australians, it will be affecting absolutely.
Speaker 1 (01:29):
And to be clear on what is actually happening, basically,
Trump wants to encourage American companies to bring business back
into America. And the way he pitched this during the
election was We're going to put these tariffs on there
and it's going to make it more expensive for these
other countries to do business with us. And he explained
it in such a way and people believe them that
(01:51):
these other countries are going to pay to do that,
and it's just not how it works. If you you know,
you look at your husband, m he runs mold men.
If someone said to him, Hey, I really want you
to come and work on our building, and deal with
all the mold there. But we're going to charge you
a twenty five percent tax to come and do that
work for us. That just doesn't make sense. So what
(02:12):
these countries have done in retaliation is they've then added
attack their own tariff back. So it's just going to
make everything more expensive globally. It is going to impact
us if it stays the course like this. Of course,
now all these countries are entering into huge negotiation periods
of Trump. In Australia we don't really have much to
negotiate with him. Our biggest kind of streach in this
is our beef experts. The US buys around three billion
(02:35):
dollars worth of beef here. I actually didn't know, but
McDonald's over there is one of our biggest buyers of
Australian beef because it's such good quality. There are going
to be impacts in terms of data day things that
we use like phones and electronics and things could get
more expensive, Cars could get more expensive. But the bigger
issue is that this is likely to slow down the
whole global economy, and one of the impacts of that
(02:58):
is likely to be if we have a slow down
in the economy, that is when the RBA usually steps
in and starts to try to stimulate our economy by
lowering interest rates, and people might be excited about that.
They might think, Okay, that's a really good side effect
of this, My interest rates are going to come down,
and in fact, some predicting we might actually get a
double rate cut in May, a point five percent cut.
(03:20):
That is does feel like a good thing. But if
the economy does really slow down, there's no guarantee that
the banks are actually going to pass on these rate
cuts in full. Because when the economy slows and there's
less transactions happening, there's less business loans happening, there's less
lending and less credit card spending, and all of these
ways that banks make money will start to slow down.
(03:40):
So that's what we saw after the GFC, where we
would have interest rate cuts and banks wouldn't pass them on,
or that only pass part of those cuts on. So
it's kind of not a reason to celebrate. I don't
think we're celebrating any of this yet. I do think, though,
just try not to get too involved in it and
disheartened by it. Unless it's impacting you your close retirement,
you're worried about your supers, then of course engage with it.
(04:03):
But if it's more just this news that's happening around you,
try to you know, life is just going to continue
on as usual here and there is going to be
a period of weeks or months of negotiating and change
that happens from here. So we will just kind of
watch it all unfold.
Speaker 2 (04:18):
Sarah, Thank you, you did make it clear.
Speaker 1 (04:21):
Thank you so much.
Speaker 3 (04:22):
Guys you don't remember what your care Yeah, you got
red in me.
Speaker 4 (04:33):
That I don't quite know how you're trying to express yourself.
Is it because it's the end of the show, because.
Speaker 2 (04:46):
More living a rate cut might be.
Speaker 3 (04:49):
You know, that's part of the reason why I reckon
he's doing it. He wants to see himself as the king,
and everyone is trying to fight hard to not have
these tariffs, so he bringing them to the table. But
it's almost like the old movies where you see the
kings standing there and the peasants come in with three
pigs and they go, this is our offering to you
know what I mean. It's negotiation, but he wants to
(05:11):
be the one that I'm the king, it's the king maker.
He's making himself, the king, what do you want to
talk about? I won't give you this much of the
tariffy if you do this.
Speaker 4 (05:20):
Yeah, he's just.
Speaker 3 (05:21):
Going hard early so he can negotiate.
Speaker 2 (05:23):
But then parts of it are not crazy, because all
countries should be self sufficient, right and be able to
have and support our own produce and our own product
and our own manufacturing.
Speaker 3 (05:32):
So there's well, we let go of it through greed.
Speaker 2 (05:35):
We didn't all greed be poor and yeah, happy.
Speaker 3 (05:41):
We start making a t shirt business and going to
China and saying can you do this?
Speaker 2 (05:47):
Crazy ideas we always come up with you and never
do anyway. By everyone,
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