How Donald Trump’s trade war could impact Australians’ super

Australian super funds are making moves amid the threat of global economic turmoil after US president Donald Trump slapped tariffs on steel and aluminium.

EXCLUSIVE: Australian super funds are moving to protect members’ retirement savings from global economic volatility after US president Donald Trump slapped tariffs on steel and aluminium, sparking fears of a looming trade war.

The threat of global economic turmoil could up-end decades of positive super funds growth.

Over the past 32 years, Australian super funds have only record five years of negative returns, according to SuperGuide.

Australian Super and HESTA confirmed they were assessing their portfolios as the $4 trillion superannuation sector braces for potential fallout after Mr Trump flagged he could place tariffs on the pharmaceutical and agricultural sectors.

Association of Superannuation Funds Australia chief executive officer Mary Delahunty said super funds were looking at the potential knock-on effects on other major markets such as Europe and China.

“The aluminium and steel tariffs are difficult for that sector but largely contained,” she said.

“The broader trade war and its knock-on effects to broad prosperity is what the investment teams and economists in the advisory groups are turning their attention to.”

The threat of global economic turmoil following Donald Trump’s tariff decision could up-end decades of positive super funds growth. Picture: AFP

Mr Trump threatened to introduce retaliatory tariffs on European wine after introducing tariffs on Chinese goods and a 25 per cent tariff on steel and aluminium, including from Australia.

The nation’s superannuation sector invests members retirement savings in domestic and overseas markets and profit on investments is paid back to members’ funds.

The largest fund, Australian Super, which manages about $350bn on behalf of members, has previously flagged they would be increasing investment overseas in a bid to increase returns.

Head of portfolio strategy Justine O’Connell said the fund’s asset team was monitoring global trading conditions and geopolitical developments. But super was a long-term investment, she said.

“Our investment teams continue to assess ongoing developments of trade policies, the potential impacts on asset markets and how to best position the portfolio to deliver long term performance,” she said.

“Market ups and downs are a normal part of investing.”

Association of Superannuation Funds Australia chief executive officer Mary Delahunty said super funds were looking at the potential knock-on effects of Donald Trump’s tariffs. Picture: NewsWire / Martin Ollman

HESTA chief investment officer Sonya Sawtell-Rickson said the specialist fund had some investment in companies that would be impacted by tariffs but the indirect impact of any possible trade war was of greater concern.

“A flurry of policy change in the US this year, of which tariffs have been a key feature, has impacted investor confidence and played a prominent role in recent global sharemarket weakness,” she said.

“Ahead of this recent market uncertainty, we had been building liquidity ready to capitalise on market opportunities.

“We continue to monitor conditions closely and are actively managing the portfolio to take advantage of emerging trends, and short-term volatility.”

PrimeSuper investments general manager Michael McQueen said the fund had some exposure to increasing protectionism but their diverse investment portfolio would offset any market volatility.

“While some of these companies may be affected by the US tariffs on steel and aluminium, we believe that their management teams have had time to assess the implications of a more protectionist US foreign policy framework and plan accordingly,” he said.

“Our fund managers are actively monitoring these changes and are empowered to adjust portfolios as necessary.”

Originally published as How Donald Trump’s trade war could impact Australians’ super