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Economic Weekly: Après Trump, le déluge?

After four years of headline-grabbing stunts, an endless rotating cast of supporting characters, and a chaotic final transition, the Trump era came to an end last week with Joe Biden formally inaugurated as the 46th US President. The new administration has already hit the ground running, with a flurry of executive actions designed to undo many of the Trump administration’s policies, from ending construction of the much-ballyhooed US-Mexico border wall, to re-entering the Paris Climate Accords and the World Health Organisation. For kiwis who are shellshocked by the wall-to-wall political coverage of the last few years, it might be tempting to think we can all stop thinking about American politics again, but given the United States’ influence over the global economy that’s an unlikely prospect.

Item one on the Biden agenda will be to speed up the US vaccine rollout, which is running ahead of most developed countries, but still a massive logistical challenge. One of the first executive orders signed by the new president has been to invoke the Defence Production Act, empowering the US Federal Government to direct businesses to manufacture materials and equipment needed to fight the pandemic. You can keep track of the vaccine progress in the US – as well as everywhere else – in our Weekly Chart packs.

Further economic stimulus is the other big ticket on the agenda for the new administration, with a USD$1.9 trillion packaged being touted by Biden. Rising hopes for a big package are one reason we saw the yield curve steepen and a decent lift in equities globally towards the end of last year, but there are still a few hurdles to clear given the narrow majority in the Senate held by the Democrats.

Most pertinently for kiwis, it will be worth watching for more clues on the Biden team’s approach to international trade. Free trade advocates will be hoping for a departure from the Trump era, which saw the US-China trade war commence and tariffs whacked on US friend and foe alike.

Yet the new administration is already making protectionist noises, with Biden releasing a ‘Buy American’ plan and new Treasury Secretary Janet Yellen taking a firm tone towards China in her confirmation hearing, so the key difference between this administration may merely be one of degrees. New Zealand managed to weather the trade war with little disruption, with annual exports hitting new highs through the Trump era.  But US-China trade tensions under the Biden administration could follow a different shape, particularly if Biden seeks to enlist allies from elsewhere in the Asia-Pacific in a less disorderly, more multilateral way. So even with Donald Trump out of the White House, we might not have seen the last of the surprises out of the US just yet.

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Jane Turner

Senior Economist

Originally hailing from sunny Nelson, Jane moved to Auckland to join the ASB team in 2008.  As Senior Economist, Jane's main focus is co-ordinating the team’s macro-economic forecasts.  In this key role, Jane was thrilled by the team’s twice consecutive win of the Consensus Economics Forecast Accuracy award.   

During her decade-long career in economic forecasting, Jane has gained a thorough knowledge of the New Zealand economy.  Her current focus is on New Zealand GDP growth, including both manufacturing and the construction sectors.  She has spent time forecasting most sectors of the economy, including inflation, trade, housing, labour and financial markets.

Prior to joining ASB, Jane honed her macro-economic forecasting skills at the Reserve Bank of New Zealand.  Jane is a qualified scarfie, attending Otago University and graduating with a Bachelor of Commerce in Economics with 1st class honours.  In 2014, she took a career break from ASB to travel the world and learn to snowboard.

Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.

Mike Jones

Senior Economist

Mike joined ASB in 2019 armed with almost 15 years of experience in applied macroeconomic and financial markets analysis.

Mike's career has been all about distilling the risks and opportunities of economic and financial market trends for business. Basically asking the "what does it all mean" question. Mike's enthusiasm and skill for drawing out practical, commercial insights from the murky world of economics has been honed over a relatively broad base of experience.

After spending the early part of his career on the tools at the Reserve Banks of both NZ and Australia, Mike had a lengthy stint at BNZ where he was NZ’s top-ranked currency strategist. His regular and topical macro research also saw him pick up several FX forecast accuracy gongs from Bloomberg.

Drawn in by the prospect of putting strategy into practice, Mike moved from Wellington to Auckland in 2013 to join Fonterra as GM Treasury Risk Management. In this role, Mike lead Fonterra’s macroeconomic research output, and was responsible for the strategy and execution of Fonterra’s foreign exchange, debt, and interest rate hedging programmes.

mike.jones@asb.co.nz