March 31, 2025 • 24 mins
Donald Trump's unleashing of his tariff program through the Liberation Day plan has the share market reeling - and the US market is reeling the most with the weakest numbers so far this year. As Trump's old colleague, Steve Bannon, calls for Liberation Day to be made a public holiday in the US, it's time to take a serious look at Trump and your investments.
Cameron Stewart, Chief International Correspondent of The Australian joins Associate Editor Wealth, James Kirby in this episode.
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In today's show episode, we cover:
- Liberation Day - A milestone or a millstone?
- How long will Musk last at the top table with Trump?
- The role of crypto in Trump's plans* In defence of Defined Benefit Super schemes
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Hello and welcome to The Australian's Money Puzzle podcast. I'm
James Kirby. Welcome aboard everybody. This week is a week
that might well be a milestone in the markets, in
international trade. It might be a milestone in history, in
investment history, that's for sure, because this is the week
that Donald Trump unleashes, if you like, his Liberation Day program,
(00:32):
which is a program, as I'm sure all listeners know
by now, is to introduce a range of tariffs right
on imports into the US for across every country in
the world, and it has the potential to upend the
economic world order as we know it. As we know
it back as far as the end of the Second
World War nineteen forty seven General Agreement on Trade in Tariffs,
(00:53):
which was enhanced and improved all the way up up
through the World Trade Organization to what we have today.
This is now imperiled, basically, and investors don't know where
to move. They certainly know what to do in the
short term, sell stocks because the US is down five percent.
US markets down five percent, the most important market, dragging
a lot of other markets with it, including our own.
(01:15):
So crucial I think to understanding what's happening is an
understanding of Donald Trump. And my guest today has a
unique understanding of Donald Trump because he's been there, He's
been in the Oval Office, he's been at the rallies,
he was at the famous rally where they all went
wild in the capital, and he has a unique view
on Trump. It's Cameron Stewart and he's the chief international
correspondent of the Australian. How are you, Cameron, Hi, James.
(01:38):
Good to be with you, Good to have you on
the show. I think some of us, at least had
paid no attention to Trump as when he was in opposition,
and many people, certainly in the investment markets, didn't expect
him to return. Tell us you, I'm sure you asked
us lots of times, but tell us your impression of
Trump up close, because not many people have been up
(01:59):
close since seeing him in action. Is he as erratic
in person as he seem from a distance. Is he charming?
Is he charismatic? Is he overwhelming? What's it like?
Speaker 2 (02:09):
That's a good question. I've been in the Oval Office
twice with Trump and been around him a lot in Washington. Firstly,
I'd say he's very orange. He's even more orange in
real life than he actually appears on television, which is interesting.
But look, there's a couple of things that'd say similarities
between the Trump mark one i'll call it for the
first term and Trump to this term one. Is absolutely
(02:32):
even more of a showman now than he was then.
He really understands the business of being the president and
what you have to look like and the bizaz that goes.
We all recall the disastrous Oval office meeting between him
and Ukraine's Zelenski when he said this great television that's
that was his final take on the actual thing that's
consistent from the first term. The second thing is that
(02:54):
he still has a very visible glass jaw. He's very
easily anger. If he feels disrespect a foreign leader disrespects him,
then that foreign leader is going to be in for trouble. Personally,
he's actually quite funny. He's got quite a good sense
of humor. Of course, he goes to very dangerous areas
with that humor sometimes, and he's certainly charismatic. He holds
a room very strongly, very clearly. But I would say
(03:16):
there are some differences being up close to Trump in
the first term compared to now James and that is
that here you can really see it in his face
almost he relishes the power he has this time more
so than he did in the first term. In the
first term, he didn't really know how to work believers
of power in Washington. He didn't really know how Washington worked.
(03:39):
Of course, he was a business person, and he had
a record turnover amongst his staff. He was being chased
by the special prosecutor over a range of issues, and
you could see he was like the apprentice part of
the part, basically the apprentice president. But now second time around,
you just see it in his face. He is in control.
(04:01):
He wants to be in control. He's backed by Republican
majorities in both houses of Congress, a solid election when
he knows the game. He's only got one term and
doesn't need to be re elected. He's appointed these amazing
disruptors to run the departments around Washington. And so I
think in that way, Trump is a different beast than
(04:23):
he was the first time.
Speaker 1 (04:25):
Like Scaramucci's points that everyone ends up on the woodschipper,
and I think we all expected that, but it's not
happening as certainly not happening in anything like the piece
is it so the people he puts into Treasury or
Secretary of State or Commerce or whatever, it's relatively stable.
Then is it compared to the first year of the
first term of the first run.
Speaker 2 (04:46):
Well, it's stable in the sense that he hasn't sacked
anyone yet, although mind you, he was very tended to
do so over the signal gays of controversy, of course.
But what he's done, of course, this is his way
of getting back at the swamp in Washington, is to
put people who don't like the departments to actually put
them as head of the departments. He's done that with
the FBI, has done that with Roight Kennedy and the
Health Department. And his idea is to basically challenge those
(05:08):
departments and move them into his line of thinking, if
you like. And so whether it's successful is a question
that's still to be answered. But that's a huge thing
that he's done, which he didn't in his first turn.
Speaker 1 (05:19):
I don't want to get too much into the thickets
of politics, because our listeners are interested in how this
affects their investing future and becaus the standout. The last time,
there was various people who were quite prominent in the
financial side of the Trump administration mark one this time,
though Mosque is so prominent. I just wanted to ask
(05:42):
you sort of a simple question, which is, do you
think Mosque would be as prominent this time next year?
Speaker 2 (05:48):
No, I definitely don't. Why is that because I think
that there's not enough room for the egos to be
being so close to the things. I mean, I think
a lot of people have been surprised by how prominent
MUSC been early on, actually sat in on calls with
Ukraine's Zelensky and it's extraordinary stuff, really, And we are
taking bets in the newsroom. And how long he'll last?
(06:09):
I said six months, and I'm sticking to that. I
think the problem is going to be apart from egos,
James is the doge, the Trump's musk's task of cutting
massive amounts of spending from the federal government. Now, look,
he's doing that in a fairly robust and sometimes clumsy way,
cutting money to the wrong departments and having to restore them.
(06:29):
It's been fairly messy. But the trouble with that is
that we are now starting to see a backlash from
people A who are losing their jobs and B who
are scared of losing their jobs, and Musk is becoming
quite unpopular in the United States. There's a tax on
Tesla cars. It's really interesting to see how the mood
towards Musk is changing. And I think it will be
(06:50):
a very easy solution by Trump at some point in
time to say, Elon, thank you very much, we've had
enough of you. You can go, and that way Musk
goes and Trump doesn't get the blame for some of
these cuts. So I think we're going to see a
breakdown in this relationship within twelve months, well within twelve months.
Speaker 1 (07:07):
Right, So some sort of a Machiavellian twist there that
you put someone in that was an impossible task. Really,
whoever goes in to cut up the government departments was
going to face fire and here it comes. Yeah, okay,
very interesting. Just also on that when people are talking
economics and Trump he was re elected. Wall Street eventually
(07:31):
sided with him late in the day. Maybe they knew
he was going to get in anyway, but the sort
of titans of Wall Street, Larry Fink and co. They
sided with him in the end, and their public explanation
of that was that he would bring in tax cuts,
that he would bring in deregulation, but it's all about
tariffs right. So far this year and in this first
six months or so, the US has been the weakest
(07:53):
stock market in the world. In fact, it's fall and
five percent since the start of the year. It's lower
now than it was when Trump went in. As I said,
it's dragging Australia with it, of course as usual, which
basically mirrors that four or five percent off for the
year so far. Has the tariff's agenda, I will say
it run out of control, but it has completely dominated
(08:14):
the administration so far. Do you think he will ever
move to the other parts that people elected him for,
that the market elected him for, that war Street wanted.
Speaker 2 (08:25):
I think he will. I think it will take a
bit of time because Trump mark Io has seemed in
such a rush to do everything all at once, from
tackling woke culture to closing the border to getting peace
in Ukraine and Gaza. So the more regular side of
being a president, as you mentioned, his election promises, deregulation,
tax cuts, basic economic reform have faded into the background,
(08:47):
and of course the only economic focus really has been
the tariffs. But I think they will come back into focus.
But of course, the considerations there will be impacted by
whatever tariff policy he settles on going to do to
determinal level of income that the government gets from those tariffs,
and that will flow into other aspects of economic policy.
So perhaps, to be charitable to Trump, he's trying to
(09:09):
solve the tariff problem first and then see what falls
out from that. But that it might be a bit
too charitable to suggest there's a grand plan here. But
I think that he will go back as a four
year term. We're only well less than one hundred days
into what so much has happened. I think he will
be forced to go back and look at some of
the more basic factors of being a president, and that includes,
of course trying to get prices down, which will be
(09:30):
a huge challenge for him.
Speaker 1 (09:31):
Yeah, right, Okay, we'll take a short break. We'll be
back in the moment. Folks. Hello, Welcome back to The
Australian's Money Puzzle podcast. My guest today is Cameron Stewart's
chief international correspondent of The Australian and something of a
veteran Trump watcher. One thing I wanted to ask you
(09:54):
is about people say you don't understand the US so well.
And of course I don to understand the US so well.
I've only ever taken holidays there like most people. But
having said that, I read the Wall Street journal I
watched the news very closely. But what they say is
you don't understand the impact of Trump on the street
in the US that inside the US, it's a completely
different view. Inside the US, he speaks for people who
(10:16):
were never spoken for before. He had this extraordinary election
where he was not just re elected, but he had
stronger votes from all the various constituencies that you wouldn't expect.
So tell us what your impression of what Americans think
of Trump and how they view it as opposed to
how we view it Americans.
Speaker 2 (10:37):
For example, I went to a lot of Trump rallies,
and his supporters there are very much as sort of
slice of the general support he has around the country,
which is strong in the regions and also in really
rural areas. It's interesting, Jimes because the people that go
to the rallies and the classic Trump supporters go along
and they just absolutely thrive on Trump's rhetoric that the
(10:59):
system is not working for them, and that's a system
across the board. Socially politically, they feel forgotten. They love
his promise to destroy the system, and he links it
very well with nationalism, which is a hugely potent force
out there in regional and rural America. So he has
a very potent mix that he sells to to people.
And look at I say so as in that's not
(11:19):
a fake thing. They certainly feel it very much. But
what he doesn't do he doesn't pay much attention to details.
He just said, we're going to make America great, We're
going to restore manufacturing, the markets are going to go well,
it's going to be fantastic. He doesn't go into the details.
And I think the interesting thing here is that he's
still that he support is falling. Trump support is falling
even amongst some of his supporters. And the question comes
(11:41):
when the details don't suit Trump, And that is a
I think when prices don't fall, because I think he's
going to have a real challenge to try and combat inflation.
What's less of inflation with the tariffs that he's.
Speaker 1 (11:55):
Yes because they're inflationary, Yeah, yeah.
Speaker 2 (11:58):
They're inflationary. And also when jobs are lost people, the
whole notion of Trump is will restore jobs, and he's
Elon Musk cutting tons of jobs, of course, and then
you've got the markets which are very rocky at the moment,
and if that led to job losses as well. So
I think that you're seeing a bit of a potential
reckoning from Trump supporters in relation to Trump at some point.
Speaker 1 (12:19):
These are contemporary pools, are they, Cameron? Is that what
you're referring to? Yeah?
Speaker 2 (12:24):
Right, yes, okay, yes, that's true. He's now only four
in ten Americans agree with his tariff policy and the
way he's going about the economy at the moment, so
that's not Yeah, so you know that's definitely less than
his elected number. So a lot of people are getting alienated.
Speaker 1 (12:42):
Yeah, what about the arrival of the billionaire? Is that
amazing photograph of the moll laned up Mark Zuckerberg and
Bezos Musk or basically standing in a line? Do you
think that sort of unlikely coalition? How will that play
out from here?
Speaker 2 (12:59):
Well? I guess depends on how much Trump helps them
with their coffers and helps their business. Trump at the
moment is quite happy. It seems to be very libertarian
with the big tech titans, letting them do an awful
lot with their business and not really challenging them a lot,
and he is quite happy for them to not pull
back on social platforms. I think that they love the
(13:19):
Trump agenda at the moment. Again, reality may well bite
in that respect. I think that might be a bit
more of a temporary alliance, if you like. But it
certainly does help Trump to be in the good graces
of those enormously powerful. I mean, these are like the
railroad Titans, aren't They are the nineteen.
Speaker 1 (13:35):
They are, absolutely, they are the modern day railroad barons. Absolutely.
But one thing that's and I know there's always this
sort of thing. Americans don't get satire. Americans don't get irony.
Do the Trump supporters genuine supporters that they are, and
many of them being basically Republican Party supporters who were
just who would be Republican voters in any event, and
(13:57):
Trump is just the latest iteration of who they would
vote for. But is there any sense of irony among
that supporters that there is a squad of billionaire as well?
In the show when the proposal was to drain the
swamp and all that.
Speaker 2 (14:10):
It's a great question, James, But then again, how did
Trump a billionaire become the hero of the working class.
This is the phenomenal irony of the whole Maga movement,
is that he had a billionaire, never fought for his
country as a general or was a politician, which of
course previous presidents have always been that sort of milk.
Here's a guy, a businessman, taking over, and he's a billionaire,
(14:32):
He's got a gold skyscraper in New York City, and
yet he is seen as the man of the working
American and whereas the Democrats, the traditional Democrat party, are
seen now as a party of inner city elites. It's
an extraordinary flip. And Trump has done that.
Speaker 1 (14:46):
Again and they re elected him on that. So there
was no basically any suspicion of that or questioning of
that was muted basically because he was re elected.
Speaker 2 (14:56):
That's right. And would agree that he's doing exactly what
he promised to do. To give Trump his due, He's
not saying he's not lying about it. He's doing absolutely
what he promised he would do. He's just doing it
at full speed.
Speaker 1 (15:09):
Right, So what do you think. I know it's very difficult,
but so here we are. This is the Week of Liberation,
Day of the tariffs. Australia will be affected to some degree,
but I suppose the eye popping tariffs, So of things
like the twenty five percent on cars for instance, going
into the US and general motors and forward, you would
think that they would be going up in the stock market.
(15:30):
You would think he's doing them a favor, but they've
been falling. Actually, how do you think is going to
pan out midyear? You were talking about the first hundred days.
What are the sort of questions that will dominate the
Trump administration for the rest of the year.
Speaker 2 (15:44):
Look, I think with as far as Trump's concern it's
interesting his second term on tariffs is fairly different to
his first term on tariffs. Of course, he was a
big tariff guy in his first term, and people often
forget terroriffs he put on China. He's always been susceptible
to that. But this time around, and this is what
I think has shaken so many allies, including Australia, is
that he really is a different beast on tariff's. He
(16:06):
really has come out this term with a sense that
America has been wronged, and that's capital A and capital W.
The sense of grievance is really driving his tariff policy
this time he sees them very much as nationalistic, almost
a tool of vengeance in a way that he didn't
in the first term. And I think that's why, of course,
(16:26):
we saw Australia fail on the geinting exemption from the
still and all a millium tariffs recently, whereas they've got
that same exemption in twenty eighteen. And the bottom line
I think there is that Trump is just a different
beast when it comes to tariff's this time around. And frankly,
I think if the same Australians were running the show
as we're running the show, then it's Malcolm Turnbull, Julie
(16:48):
Bishop and Joe Hockey as the three key players. I
think Australis too would not have got an exemption this
time around. That's sound different. I think Trump is on
That's interesting.
Speaker 1 (16:56):
Yeah, yeah, okay, So they've become core stitch And as
you said, to some extent, that's the explanation, isn't it
for basically turning against what we're allies? Who are allies?
But this idea that how could he possibly turn against
his own allies? But that's the explanation that the allies
have let the US down.
Speaker 2 (17:16):
That's right. Absolutely, it's the ally's fault and he's getting
them back, but he is incredibly erratic with it. It's
interesting he's committed to tariffs to a large degree, but
he's still a bit skittish on them. And I think
this is fascinating for Australians to watch. It's very disturbing,
of course if you have a lot of investments. But
he imposed twenty five percent tariffs on Mexico and Canada
and then of course the stock market went, whoa, we
(17:38):
dived and he delayed them for thirty days, and we've
got this mystery on I think Thursday, Australian time, of
what he's going to do with this Liberation Day, which
I see one of his former aide, Steve Bannon, wants
to turn into a public holiday. So it's going to
be fascinated to see exactly what he does at that
point in time. I think the one thing that actually
(17:59):
scared Trump James is the stock market. He does not
want to see a great dive on Wall Street. He's
one of the few presidents you might recall in his
first journ that actually linked stock market's success to his
own policies. Other presidents don't do that market still.
Speaker 1 (18:15):
But the market's went very well in his first one
hundred days last time.
Speaker 2 (18:18):
That's right, and so he thumped his chest at that time.
I recalled it. What he's saying this is, look at me.
I'm a great president. The market loves me. Now the
market doesn't like him at the moment. And if the
market starts to hate him, then I think you might
see him pulling back on some tariffs. And I think
the way he will do that will be in a
way that doesn't lose face. And that would be, say,
for example, with Australia, when he meets the Australian Prime
(18:40):
Minister in Washington, they have dinner together and everything, and
you have a sort of exemption given on the one country.
I think that might be the way that Trump goes backwards,
if he wants to go backwards down the track.
Speaker 1 (18:51):
Okay, very interesting. Yeah, And that whole change of tone
where you can start to give exceptions to the policy
that you've announced, it gives you some regal room. Okay,
very interesting. We'll take a little break. We've got some
very good questions, including one from Rosie which I've kept
for Cameron because I knew he was coming on the
show back in the moment. Hello, and welcome back to
(19:19):
The Australian's Money Puzzle. I'm James Kirby and I'm talking
to Cameron Stuart. Cameron, by the way, is the international
affairs correspondent on The Australian and someone I have worked
with on and off for a long time. I think
roughly nineteen ninety three would have been the first day
I saw him in the office of The Australian. So
that will tell you how long ago it was. That
(19:39):
not that we've been there ever since. By the way,
We've all done interesting things. But here we are. Here
we are, many years later, back back here. Okay, Now
the question is from Rosie. Thanks for your podcast so informative,
keeps things in perspective and provides me with the reliable
financial news I could most reliable financial news I could
ask for. Thank you, Rosie. I don't normally read out
those first parts, but that one was interesting. Okay, here's
(20:02):
the question. I have a question about Trump, and I
was interested. I've noted Trump seems very interested in legitimizing
cryptocurrency and has recently established an official strategic Bitcoin reserve.
That's right, Previously, Trump has seemed very concerned, but share
markets are making sure they're strong right now, he seems
not to care about that. I wondered if Trump possibly
(20:23):
doesn't care about markets tanking because he's more interested in
boosting the value of crypto. Is that too cynical? Nothing
is too cynical, Rosie. We'll just put the story, We'll
put the question straight to camera about crypto and the
strategic reserve. That was extraordinary, wasn't it that he would
first of all, he was so pro crypto. Secondly, we'll
just put the whole crazy thing about his own tokens
(20:44):
to one side for the moment, because it's too important
really to be distracted. How important is crypto to him?
Is there something more going on than we might think.
Speaker 2 (20:55):
Yes, I don't know. I'm not well qualified to comment
on Trump's crypto policies, but I do think he's very
worried about the market and very influenced by the market.
So I would disagree with that aspect of Rosies. And
now that's a so question radio.
Speaker 1 (21:10):
Yes, yes, okay, very good. There you are, Rosie not
being taken very seriously by Cameron on that one. And
I think probably I would agree there too, that the
markets themselves would be so so much more important than crypto.
And in any event, Rosie crypto is correlated now to markets,
completely correlated. So basically, if the markets are good, crypto
(21:30):
is good, and vice versa. So that would all feed
into that, all right, Just to finish off, I have
a very interesting piece of corresponders from NIL. I just
read it briefly. I'm lucky enough to be a member
of a defined benefits superannuation scheme, and I acknowledge I
have substantial superbalance that's not affected by the market. The
benefit is defined. What frustrates me is how defined benefit
funds seem to be talked about all the time as
(21:51):
some supreme benefit only for old members and never the employer.
The returns are magical and can't be obtained by younger employees, apparently.
And then the point, all he's life, he paid seventeen
percent of his salary into a defined benefit fund. And
this Cameron, all the people you deal with, all those
senior bureaucrasts that you deal with, and all those senior
army and Navy people, they'd all beyond these defined benefits.
(22:12):
And if the stock market crashes, they don't care. But
here's the point Neil makes that that he says it
puts seventeen percent in all the time when you think
about it, we don't write by low. It's still as
we speak today, it's eleven and a half and used
to be used to be like three or four percent
one time. But the point he makes is this, it
seems to me, with good prudent investment management and long
(22:33):
term membership and personal contributions, that a defined benefit fund
can be a winner for both sides employer employee. And
I guess what I'm saying is the only difference I
see between identifying benefit fund and a normal fund is
who wears the risk over any reasonable length of time.
It seems the returns of an accumulation type fund are
often better than a conservative defined benefit fund, and if
(22:55):
people were prepared to invest sixteen percent of their income
over for years, they could accrue similar benefits. Great point, Neil.
Fair enough. We're always making fun. We're always ribbing you guys,
probably because we'd love to be you and we wouldn't
have to worry about our super and we wouldn't care
if Donald Trump crashes the markets, because we'd have a
defined benefit. That point stands, but it's also very true
(23:18):
that if I put seventeen percent in since I was
twenty one, I'd have a lot more money in super
than I have today, and so would you. Cameron. All Right, Hey,
thank you very much for being on the show.
Speaker 2 (23:26):
Great to have you, pleasure, Thanks James.
Speaker 1 (23:29):
Great to have Cameron Stewart there on the show today.
And of course keep an eye on what happens next
on Liberation Day public holiday. Huh. I supposed to's been
suggested by Steve Bennon, so that probably kills it off
immediately as an idea. Okay, the email is the money
puzzle at the Australian dot com dot au. Talk to
you soon.
Hello and welcome to The Australian's Money Puzzle podcast. I'm
James Kirby. Welcome aboard everybody. This week is a week
that might well be a milestone in the markets, in
international trade. It might be a milestone in history, in
investment history, that's for sure, because this is the week
that Donald Trump unleashes, if you like, his Liberation Day program,
(00:32):
which is a program, as I'm sure all listeners know
by now, is to introduce a range of tariffs right
on imports into the US for across every country in
the world, and it has the potential to upend the
economic world order as we know it. As we know
it back as far as the end of the Second
World War nineteen forty seven General Agreement on Trade in Tariffs,
(00:53):
which was enhanced and improved all the way up up
through the World Trade Organization to what we have today.
This is now imperiled, basically, and investors don't know where
to move. They certainly know what to do in the
short term, sell stocks because the US is down five percent.
US markets down five percent, the most important market, dragging
a lot of other markets with it, including our own.
(01:15):
So crucial I think to understanding what's happening is an
understanding of Donald Trump. And my guest today has a
unique understanding of Donald Trump because he's been there, He's
been in the Oval Office, he's been at the rallies,
he was at the famous rally where they all went
wild in the capital, and he has a unique view
on Trump. It's Cameron Stewart and he's the chief international
correspondent of the Australian. How are you, Cameron, Hi, James.
(01:38):
Good to be with you, Good to have you on
the show. I think some of us, at least had
paid no attention to Trump as when he was in opposition,
and many people, certainly in the investment markets, didn't expect
him to return. Tell us you, I'm sure you asked
us lots of times, but tell us your impression of
Trump up close, because not many people have been up
(01:59):
close since seeing him in action. Is he as erratic
in person as he seem from a distance. Is he charming?
Is he charismatic? Is he overwhelming? What's it like?
Speaker 2 (02:09):
That's a good question. I've been in the Oval Office
twice with Trump and been around him a lot in Washington. Firstly,
I'd say he's very orange. He's even more orange in
real life than he actually appears on television, which is interesting.
But look, there's a couple of things that'd say similarities
between the Trump mark one i'll call it for the
first term and Trump to this term one. Is absolutely
(02:32):
even more of a showman now than he was then.
He really understands the business of being the president and
what you have to look like and the bizaz that goes.
We all recall the disastrous Oval office meeting between him
and Ukraine's Zelenski when he said this great television that's
that was his final take on the actual thing that's
consistent from the first term. The second thing is that
(02:54):
he still has a very visible glass jaw. He's very
easily anger. If he feels disrespect a foreign leader disrespects him,
then that foreign leader is going to be in for trouble. Personally,
he's actually quite funny. He's got quite a good sense
of humor. Of course, he goes to very dangerous areas
with that humor sometimes, and he's certainly charismatic. He holds
a room very strongly, very clearly. But I would say
(03:16):
there are some differences being up close to Trump in
the first term compared to now James and that is
that here you can really see it in his face
almost he relishes the power he has this time more
so than he did in the first term. In the
first term, he didn't really know how to work believers
of power in Washington. He didn't really know how Washington worked.
(03:39):
Of course, he was a business person, and he had
a record turnover amongst his staff. He was being chased
by the special prosecutor over a range of issues, and
you could see he was like the apprentice part of
the part, basically the apprentice president. But now second time around,
you just see it in his face. He is in control.
(04:01):
He wants to be in control. He's backed by Republican
majorities in both houses of Congress, a solid election when
he knows the game. He's only got one term and
doesn't need to be re elected. He's appointed these amazing
disruptors to run the departments around Washington. And so I
think in that way, Trump is a different beast than
(04:23):
he was the first time.
Speaker 1 (04:25):
Like Scaramucci's points that everyone ends up on the woodschipper,
and I think we all expected that, but it's not
happening as certainly not happening in anything like the piece
is it so the people he puts into Treasury or
Secretary of State or Commerce or whatever, it's relatively stable.
Then is it compared to the first year of the
first term of the first run.
Speaker 2 (04:46):
Well, it's stable in the sense that he hasn't sacked
anyone yet, although mind you, he was very tended to
do so over the signal gays of controversy, of course.
But what he's done, of course, this is his way
of getting back at the swamp in Washington, is to
put people who don't like the departments to actually put
them as head of the departments. He's done that with
the FBI, has done that with Roight Kennedy and the
Health Department. And his idea is to basically challenge those
(05:08):
departments and move them into his line of thinking, if
you like. And so whether it's successful is a question
that's still to be answered. But that's a huge thing
that he's done, which he didn't in his first turn.
Speaker 1 (05:19):
I don't want to get too much into the thickets
of politics, because our listeners are interested in how this
affects their investing future and becaus the standout. The last time,
there was various people who were quite prominent in the
financial side of the Trump administration mark one this time,
though Mosque is so prominent. I just wanted to ask
(05:42):
you sort of a simple question, which is, do you
think Mosque would be as prominent this time next year?
Speaker 2 (05:48):
No, I definitely don't. Why is that because I think
that there's not enough room for the egos to be
being so close to the things. I mean, I think
a lot of people have been surprised by how prominent
MUSC been early on, actually sat in on calls with
Ukraine's Zelensky and it's extraordinary stuff, really, And we are
taking bets in the newsroom. And how long he'll last?
(06:09):
I said six months, and I'm sticking to that. I
think the problem is going to be apart from egos,
James is the doge, the Trump's musk's task of cutting
massive amounts of spending from the federal government. Now, look,
he's doing that in a fairly robust and sometimes clumsy way,
cutting money to the wrong departments and having to restore them.
(06:29):
It's been fairly messy. But the trouble with that is
that we are now starting to see a backlash from
people A who are losing their jobs and B who
are scared of losing their jobs, and Musk is becoming
quite unpopular in the United States. There's a tax on
Tesla cars. It's really interesting to see how the mood
towards Musk is changing. And I think it will be
(06:50):
a very easy solution by Trump at some point in
time to say, Elon, thank you very much, we've had
enough of you. You can go, and that way Musk
goes and Trump doesn't get the blame for some of
these cuts. So I think we're going to see a
breakdown in this relationship within twelve months, well within twelve months.
Speaker 1 (07:07):
Right, So some sort of a Machiavellian twist there that
you put someone in that was an impossible task. Really,
whoever goes in to cut up the government departments was
going to face fire and here it comes. Yeah, okay,
very interesting. Just also on that when people are talking
economics and Trump he was re elected. Wall Street eventually
(07:31):
sided with him late in the day. Maybe they knew
he was going to get in anyway, but the sort
of titans of Wall Street, Larry Fink and co. They
sided with him in the end, and their public explanation
of that was that he would bring in tax cuts,
that he would bring in deregulation, but it's all about
tariffs right. So far this year and in this first
six months or so, the US has been the weakest
(07:53):
stock market in the world. In fact, it's fall and
five percent since the start of the year. It's lower
now than it was when Trump went in. As I said,
it's dragging Australia with it, of course as usual, which
basically mirrors that four or five percent off for the
year so far. Has the tariff's agenda, I will say
it run out of control, but it has completely dominated
(08:14):
the administration so far. Do you think he will ever
move to the other parts that people elected him for,
that the market elected him for, that war Street wanted.
Speaker 2 (08:25):
I think he will. I think it will take a
bit of time because Trump mark Io has seemed in
such a rush to do everything all at once, from
tackling woke culture to closing the border to getting peace
in Ukraine and Gaza. So the more regular side of
being a president, as you mentioned, his election promises, deregulation,
tax cuts, basic economic reform have faded into the background,
(08:47):
and of course the only economic focus really has been
the tariffs. But I think they will come back into focus.
But of course, the considerations there will be impacted by
whatever tariff policy he settles on going to do to
determinal level of income that the government gets from those tariffs,
and that will flow into other aspects of economic policy.
So perhaps, to be charitable to Trump, he's trying to
(09:09):
solve the tariff problem first and then see what falls
out from that. But that it might be a bit
too charitable to suggest there's a grand plan here. But
I think that he will go back as a four
year term. We're only well less than one hundred days
into what so much has happened. I think he will
be forced to go back and look at some of
the more basic factors of being a president, and that includes,
of course trying to get prices down, which will be
(09:30):
a huge challenge for him.
Speaker 1 (09:31):
Yeah, right, Okay, we'll take a short break. We'll be
back in the moment. Folks. Hello, Welcome back to The
Australian's Money Puzzle podcast. My guest today is Cameron Stewart's
chief international correspondent of The Australian and something of a
veteran Trump watcher. One thing I wanted to ask you
(09:54):
is about people say you don't understand the US so well.
And of course I don to understand the US so well.
I've only ever taken holidays there like most people. But
having said that, I read the Wall Street journal I
watched the news very closely. But what they say is
you don't understand the impact of Trump on the street
in the US that inside the US, it's a completely
different view. Inside the US, he speaks for people who
(10:16):
were never spoken for before. He had this extraordinary election
where he was not just re elected, but he had
stronger votes from all the various constituencies that you wouldn't expect.
So tell us what your impression of what Americans think
of Trump and how they view it as opposed to
how we view it Americans.
Speaker 2 (10:37):
For example, I went to a lot of Trump rallies,
and his supporters there are very much as sort of
slice of the general support he has around the country,
which is strong in the regions and also in really
rural areas. It's interesting, Jimes because the people that go
to the rallies and the classic Trump supporters go along
and they just absolutely thrive on Trump's rhetoric that the
(10:59):
system is not working for them, and that's a system
across the board. Socially politically, they feel forgotten. They love
his promise to destroy the system, and he links it
very well with nationalism, which is a hugely potent force
out there in regional and rural America. So he has
a very potent mix that he sells to to people.
And look at I say so as in that's not
(11:19):
a fake thing. They certainly feel it very much. But
what he doesn't do he doesn't pay much attention to details.
He just said, we're going to make America great, We're
going to restore manufacturing, the markets are going to go well,
it's going to be fantastic. He doesn't go into the details.
And I think the interesting thing here is that he's
still that he support is falling. Trump support is falling
even amongst some of his supporters. And the question comes
(11:41):
when the details don't suit Trump, And that is a
I think when prices don't fall, because I think he's
going to have a real challenge to try and combat inflation.
What's less of inflation with the tariffs that he's.
Speaker 1 (11:55):
Yes because they're inflationary, Yeah, yeah.
Speaker 2 (11:58):
They're inflationary. And also when jobs are lost people, the
whole notion of Trump is will restore jobs, and he's
Elon Musk cutting tons of jobs, of course, and then
you've got the markets which are very rocky at the moment,
and if that led to job losses as well. So
I think that you're seeing a bit of a potential
reckoning from Trump supporters in relation to Trump at some point.
Speaker 1 (12:19):
These are contemporary pools, are they, Cameron? Is that what
you're referring to? Yeah?
Speaker 2 (12:24):
Right, yes, okay, yes, that's true. He's now only four
in ten Americans agree with his tariff policy and the
way he's going about the economy at the moment, so
that's not Yeah, so you know that's definitely less than
his elected number. So a lot of people are getting alienated.
Speaker 1 (12:42):
Yeah, what about the arrival of the billionaire? Is that
amazing photograph of the moll laned up Mark Zuckerberg and
Bezos Musk or basically standing in a line? Do you
think that sort of unlikely coalition? How will that play
out from here?
Speaker 2 (12:59):
Well? I guess depends on how much Trump helps them
with their coffers and helps their business. Trump at the
moment is quite happy. It seems to be very libertarian
with the big tech titans, letting them do an awful
lot with their business and not really challenging them a lot,
and he is quite happy for them to not pull
back on social platforms. I think that they love the
(13:19):
Trump agenda at the moment. Again, reality may well bite
in that respect. I think that might be a bit
more of a temporary alliance, if you like. But it
certainly does help Trump to be in the good graces
of those enormously powerful. I mean, these are like the
railroad Titans, aren't They are the nineteen.
Speaker 1 (13:35):
They are, absolutely, they are the modern day railroad barons. Absolutely.
But one thing that's and I know there's always this
sort of thing. Americans don't get satire. Americans don't get irony.
Do the Trump supporters genuine supporters that they are, and
many of them being basically Republican Party supporters who were
just who would be Republican voters in any event, and
(13:57):
Trump is just the latest iteration of who they would
vote for. But is there any sense of irony among
that supporters that there is a squad of billionaire as well?
In the show when the proposal was to drain the
swamp and all that.
Speaker 2 (14:10):
It's a great question, James, But then again, how did
Trump a billionaire become the hero of the working class.
This is the phenomenal irony of the whole Maga movement,
is that he had a billionaire, never fought for his
country as a general or was a politician, which of
course previous presidents have always been that sort of milk.
Here's a guy, a businessman, taking over, and he's a billionaire,
(14:32):
He's got a gold skyscraper in New York City, and
yet he is seen as the man of the working
American and whereas the Democrats, the traditional Democrat party, are
seen now as a party of inner city elites. It's
an extraordinary flip. And Trump has done that.
Speaker 1 (14:46):
Again and they re elected him on that. So there
was no basically any suspicion of that or questioning of
that was muted basically because he was re elected.
Speaker 2 (14:56):
That's right. And would agree that he's doing exactly what
he promised to do. To give Trump his due, He's
not saying he's not lying about it. He's doing absolutely
what he promised he would do. He's just doing it
at full speed.
Speaker 1 (15:09):
Right, So what do you think. I know it's very difficult,
but so here we are. This is the Week of Liberation,
Day of the tariffs. Australia will be affected to some degree,
but I suppose the eye popping tariffs, So of things
like the twenty five percent on cars for instance, going
into the US and general motors and forward, you would
think that they would be going up in the stock market.
(15:30):
You would think he's doing them a favor, but they've
been falling. Actually, how do you think is going to
pan out midyear? You were talking about the first hundred days.
What are the sort of questions that will dominate the
Trump administration for the rest of the year.
Speaker 2 (15:44):
Look, I think with as far as Trump's concern it's
interesting his second term on tariffs is fairly different to
his first term on tariffs. Of course, he was a
big tariff guy in his first term, and people often
forget terroriffs he put on China. He's always been susceptible
to that. But this time around, and this is what
I think has shaken so many allies, including Australia, is
that he really is a different beast on tariff's. He
(16:06):
really has come out this term with a sense that
America has been wronged, and that's capital A and capital W.
The sense of grievance is really driving his tariff policy
this time he sees them very much as nationalistic, almost
a tool of vengeance in a way that he didn't
in the first term. And I think that's why, of course,
(16:26):
we saw Australia fail on the geinting exemption from the
still and all a millium tariffs recently, whereas they've got
that same exemption in twenty eighteen. And the bottom line
I think there is that Trump is just a different
beast when it comes to tariff's this time around. And frankly,
I think if the same Australians were running the show
as we're running the show, then it's Malcolm Turnbull, Julie
(16:48):
Bishop and Joe Hockey as the three key players. I
think Australis too would not have got an exemption this
time around. That's sound different. I think Trump is on
That's interesting.
Speaker 1 (16:56):
Yeah, yeah, okay, So they've become core stitch And as
you said, to some extent, that's the explanation, isn't it
for basically turning against what we're allies? Who are allies?
But this idea that how could he possibly turn against
his own allies? But that's the explanation that the allies
have let the US down.
Speaker 2 (17:16):
That's right. Absolutely, it's the ally's fault and he's getting
them back, but he is incredibly erratic with it. It's
interesting he's committed to tariffs to a large degree, but
he's still a bit skittish on them. And I think
this is fascinating for Australians to watch. It's very disturbing,
of course if you have a lot of investments. But
he imposed twenty five percent tariffs on Mexico and Canada
and then of course the stock market went, whoa, we
(17:38):
dived and he delayed them for thirty days, and we've
got this mystery on I think Thursday, Australian time, of
what he's going to do with this Liberation Day, which
I see one of his former aide, Steve Bannon, wants
to turn into a public holiday. So it's going to
be fascinated to see exactly what he does at that
point in time. I think the one thing that actually
(17:59):
scared Trump James is the stock market. He does not
want to see a great dive on Wall Street. He's
one of the few presidents you might recall in his
first journ that actually linked stock market's success to his
own policies. Other presidents don't do that market still.
Speaker 1 (18:15):
But the market's went very well in his first one
hundred days last time.
Speaker 2 (18:18):
That's right, and so he thumped his chest at that time.
I recalled it. What he's saying this is, look at me.
I'm a great president. The market loves me. Now the
market doesn't like him at the moment. And if the
market starts to hate him, then I think you might
see him pulling back on some tariffs. And I think
the way he will do that will be in a
way that doesn't lose face. And that would be, say,
for example, with Australia, when he meets the Australian Prime
(18:40):
Minister in Washington, they have dinner together and everything, and
you have a sort of exemption given on the one country.
I think that might be the way that Trump goes backwards,
if he wants to go backwards down the track.
Speaker 1 (18:51):
Okay, very interesting. Yeah, And that whole change of tone
where you can start to give exceptions to the policy
that you've announced, it gives you some regal room. Okay,
very interesting. We'll take a little break. We've got some
very good questions, including one from Rosie which I've kept
for Cameron because I knew he was coming on the
show back in the moment. Hello, and welcome back to
(19:19):
The Australian's Money Puzzle. I'm James Kirby and I'm talking
to Cameron Stuart. Cameron, by the way, is the international
affairs correspondent on The Australian and someone I have worked
with on and off for a long time. I think
roughly nineteen ninety three would have been the first day
I saw him in the office of The Australian. So
that will tell you how long ago it was. That
(19:39):
not that we've been there ever since. By the way,
We've all done interesting things. But here we are. Here
we are, many years later, back back here. Okay, Now
the question is from Rosie. Thanks for your podcast so informative,
keeps things in perspective and provides me with the reliable
financial news I could most reliable financial news I could
ask for. Thank you, Rosie. I don't normally read out
those first parts, but that one was interesting. Okay, here's
(20:02):
the question. I have a question about Trump, and I
was interested. I've noted Trump seems very interested in legitimizing
cryptocurrency and has recently established an official strategic Bitcoin reserve.
That's right, Previously, Trump has seemed very concerned, but share
markets are making sure they're strong right now, he seems
not to care about that. I wondered if Trump possibly
(20:23):
doesn't care about markets tanking because he's more interested in
boosting the value of crypto. Is that too cynical? Nothing
is too cynical, Rosie. We'll just put the story, We'll
put the question straight to camera about crypto and the
strategic reserve. That was extraordinary, wasn't it that he would
first of all, he was so pro crypto. Secondly, we'll
just put the whole crazy thing about his own tokens
(20:44):
to one side for the moment, because it's too important
really to be distracted. How important is crypto to him?
Is there something more going on than we might think.
Speaker 2 (20:55):
Yes, I don't know. I'm not well qualified to comment
on Trump's crypto policies, but I do think he's very
worried about the market and very influenced by the market.
So I would disagree with that aspect of Rosies. And
now that's a so question radio.
Speaker 1 (21:10):
Yes, yes, okay, very good. There you are, Rosie not
being taken very seriously by Cameron on that one. And
I think probably I would agree there too, that the
markets themselves would be so so much more important than crypto.
And in any event, Rosie crypto is correlated now to markets,
completely correlated. So basically, if the markets are good, crypto
(21:30):
is good, and vice versa. So that would all feed
into that, all right, Just to finish off, I have
a very interesting piece of corresponders from NIL. I just
read it briefly. I'm lucky enough to be a member
of a defined benefits superannuation scheme, and I acknowledge I
have substantial superbalance that's not affected by the market. The
benefit is defined. What frustrates me is how defined benefit
funds seem to be talked about all the time as
(21:51):
some supreme benefit only for old members and never the employer.
The returns are magical and can't be obtained by younger employees, apparently.
And then the point, all he's life, he paid seventeen
percent of his salary into a defined benefit fund. And
this Cameron, all the people you deal with, all those
senior bureaucrasts that you deal with, and all those senior
army and Navy people, they'd all beyond these defined benefits.
(22:12):
And if the stock market crashes, they don't care. But
here's the point Neil makes that that he says it
puts seventeen percent in all the time when you think
about it, we don't write by low. It's still as
we speak today, it's eleven and a half and used
to be used to be like three or four percent
one time. But the point he makes is this, it
seems to me, with good prudent investment management and long
(22:33):
term membership and personal contributions, that a defined benefit fund
can be a winner for both sides employer employee. And
I guess what I'm saying is the only difference I
see between identifying benefit fund and a normal fund is
who wears the risk over any reasonable length of time.
It seems the returns of an accumulation type fund are
often better than a conservative defined benefit fund, and if
(22:55):
people were prepared to invest sixteen percent of their income
over for years, they could accrue similar benefits. Great point, Neil.
Fair enough. We're always making fun. We're always ribbing you guys,
probably because we'd love to be you and we wouldn't
have to worry about our super and we wouldn't care
if Donald Trump crashes the markets, because we'd have a
defined benefit. That point stands, but it's also very true
(23:18):
that if I put seventeen percent in since I was
twenty one, I'd have a lot more money in super
than I have today, and so would you. Cameron. All Right, Hey,
thank you very much for being on the show.
Speaker 2 (23:26):
Great to have you, pleasure, Thanks James.
Speaker 1 (23:29):
Great to have Cameron Stewart there on the show today.
And of course keep an eye on what happens next
on Liberation Day public holiday. Huh. I supposed to's been
suggested by Steve Bennon, so that probably kills it off
immediately as an idea. Okay, the email is the money
puzzle at the Australian dot com dot au. Talk to
you soon.
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