This theory has been floated in various circles for some time. And while those of us not inclined towards conspiracy theories have done our best to steer clear – keeping as much distance as possible from any suggestion of ideological motives – even we’ve had to stop and consider it.
In the latest episode of the Relative Return Unplugged podcast, AMP’s Shane Oliver highlighted Donald Trump’s clear departure from “normal Donald Trump” and questioned why some of his recent moves don’t seem to add up – even by his own standards.
Namely, Trump seems to think tariffs won’t drive up prices and won’t hurt the American economy.
Citing inflation surveys out of the University of Michigan, Oliver shared on the show that while long-term inflation expectations have risen, the divide falls along party lines.
Democrat voters see higher inflation ahead. Republican voters, not so much.
But anyone with a basic grasp of economics knows that tariffs mean higher costs.
Importers pay more at the border, and they either absorb the hit or pass it on to consumers. Push tariffs far enough, and countries might stop exporting to the US altogether, leaving Americans to rely on domestic production – which, by definition, was more expensive to begin with.
So, either way, prices go up.
But Trump seems convinced that foreign exporters foot the bill, or does he?
The reality is that Americans pay. So, isn’t this the kind of miscalculation that could come back to bite him?
Inflation could rise. Growth could take a hit. And the millions of voters who flipped from Democrat to Republican last time around might start questioning their decision.
But is he truly blind to this simple maths or is there a more sinister motive at play?
Think about Trump’s resolve to hit friendly nations with tariffs, nations like Australia with which the US has a trade surplus. Why?
“Well, you’ve got to wonder that he’s going to take offence to us because we watch AFL or rugby and not gridiron,” Oliver said.
Or is he taking offence to our GST – a relatively rational system he openly dislikes?
While Oliver admits it’s far from perfect, GST is neutral and broadly supported by economists. Yet, Trump doesn’t like it.
Are his tariffs a way to push Australia to abandon GST in favour of the US’ chaotic tax structure?
This might have seemed far-fetched a few months ago, perhaps before his hardline push to dismantle Diversity, Equity, and Inclusion (DEI) and his latest attempt to wield influence on the very pillars of society – universities.
On DEI, we’re certainly not safe. If Trump so much as winks, corporates on the other side of the world swoon – risking a slide back to the hyper-masculine workplace cultures of decades past.
So, the government can preach and shout about our commitment to DEI, but when profit margins are on the line, we all know how US-based firms and those doing business with the world’s largest economy will respond.
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If DEI becomes the bargaining chip Trump wields in exchange for US contracts, what hope do we have?
We can chase the likes of Accenture out of the country, but what happens when it’s not just Accenture?
And what about our universities?
This week, the Trump administration introduced a global questionnaire for researchers collaborating with US agencies, probing whether their projects promote “American influence, trust, and reputation”.
According to The Australian Financial Review, the questionnaire also asks if institutions have connections to autocracies like China or support “anti-American beliefs”.
Responses will reportedly influence US funding decisions, raising concerns that research funding could be cut if projects don’t align with Trump’s ideology.
So, are you still convinced this is just about trade – and not about imposing American ideological standards on the Western world?
