Qantas boss Alan Joyce concerned about impact of US, China trade war

Alan Joyce is concerned about what a US, China trade war could to the global economy.

Qantas CEO Alan Joyce and chef Neil Perry in the new Perth transit lounge. Picture Supplied

Qantas chief executive Alan Joyce has warned that a trade war could have a “dampening effect” on economic growth around the world.

He made the comments amid concerns about the impact of Donald Trump’s tariffs and a potential trade war between China and the US, with fears that Australia would be caught in the crossfire.

“What’s happened in the United States on the tax rate and on the deregulation has been phenomenal for the economy there. We see really good growth. But what Trump is doing now, essentially with the trade war, I think has everybody worried. That could have a dampening effect on economic growth around the globe.”

He said the aviation sector depended on a strong economy.

“We are all cautious of that. I think every business should be and should be making sure that they understand the implications.”

He emphasised that it was too early to say what impact the trade war would have.

“I think it’s too early to say. I don’t know if anybody knows the full implications of each of these yet because we can see when they are announced, that exemptions are made to them and the exemptions are still growing and growing, which is making them less worrying but still worrying ... then you don’t know what the Chinese are going to do fully in response to it.

“I think (as a result) we all just have to have a watching brief of it. You can see the volatility in the markets because uncertainty like this does create volatility and the markets react to it as a consequence. So I think it is too early to predict the implications.”

On the issue of company tax cuts in Australia, Mr Joyce said “you’re never confident until it gets through the Senate”.

“Obviously there are a number of senators that need to be persuaded on it but I think the government is making good progress on it.”

He said “if we don’t have a competitive tax rate, investment will be drained from our country.”

“It does have an impact on you as a business,’ he said, pointing to Qantas’ ‘Project Sunrise’ push to get aircraft manufacturing giants to make planes that could fly from the eastern seaboard to cities such as London and New York and “making aircraft decisions for 25 years”.

“If we thought the Australian economy was going to be bad, we would not buy those aircraft. And that will have a knock-on effect.

“All of the business leaders are talking to each other over the issues and we are all worried about it”

“I think a number of us have spoken to a number of the senators. We are making the case to them.

“I personally made a few phone calls to a number senators in Canberra. We are being as proactive as we can be. We are making the case now.”

The reporter travelled as a guest of Qantas