NSW Treasurer warns Trump re-election could hurt state economy

The re-ascension of Donald Trump to the US Presidency could have serious knock-on effects for one Australian state’s economy, its treasurer has warned.

Donald Trump becoming US President for a second time is the biggest potential threat to NSW’s economy, the treasurer has warned.

Speaking with the Sydney Morning Herald ahead of his second state budget, Daniel Mookhey said Trump’s intended tariffs for US imports could deal a major blow to the state, should he win the election on November 5.

“If we were to find the wild gyrations in the world’s trading system that Mr Trump is campaigning to impose, that would obviously have a huge effect on Australia and NSW,” Mookhey said.

“I’m not going to weigh in on US politics, but if you’re asking me, what is the biggest threat? Well, we obviously have to keep an eye on that”.

Trump has signalled he would impose a 10 per cent tariff on all US imports should he take office.

That’s in addition to a 60 per cent duty on Chinese goods – an idea he floated earlier in the year.

Donald Trump’s potential re-election has been labelled the “biggest threat” looming for the NSW economy

It has sparked concern from the World Trade Organisation, with chief Ngozi Okonjo-Iweala predicting a “tit for tat” response from other nations.

Asked about the policy at an event in Washington in April, Okonjo-Iweala warned the measure was a “lose-lose” situation.

“If this is done, it is obviously not helpful to WTO rules. I think it will result most likely in a tit-for-tat approach,” she said.

“Other members will also look to levy these sorts of charges in return; that’s what I think. “And then I think we will have a little bit of a free-for-all which would up-end the stability and predictability of trade.”

Regardless of whether Trump is re-elected, NSW is already in dire straits after a fifth deficit was confirmed Tuesday’s state budget.

Mookhey has blamed on the federal government’s GST carve up.

NSW Treasurer Daniel Mookhey will hand down his second budget on Tuesday, with the figures to confirm a fifth deficit for the state. Picture: NewsWire / Gaye Gerard

NSW’s share of the federal tax revenue was cut in March and the treasurer estimates the change has cost the state nearly $12 billion.

“People will see on budget day how the state’s finances would have looked if we simply kept our GST share from the current financial year to the next,” Mr Mookhey told The Australian.

He said the state government had been forced to “absorb” the cost, and shut down any talk of widespread cuts or increased taxes.

“I prefer that rather than having to slug families or businesses with $11.9bn through either service cuts or other policy changes.”

Originally published as NSW Treasurer warns Trump re-election could hurt state economy