‘No one wins here’: NAB CEO faces unifying moment in Donald Trump’s trade war

The boss of big-four bank NAB has more skin in the game than most in Donald Trump’s tariff war. There are also lessons for Australia out of this.

National Australia Bank chief executive Andrew Irvine in Newcastle on Thursday.

Andrew Irvine has more than a passing interest than many in Australia as he watches Donald Trump’s brutal trade war un­folding.

The National Australia Bank chief is a dual British-Canadian national having lived and worked in Toronto for most of his life. Canada is rarely in the news, but that all changed this year as Donald Trump used tariffs as a battering ram on the economy of his northern neighbour. China has already been hit with a tariff wall. The actions have rattled sharemarkets, particularly with Trump now turning his sights on Europe.

“It’s difficult. Canadians right now are feeling quite hurt and angry,” the NAB chief tells The Australian. “They feel it’s an attack on their sovereignty, that he’s (Donald Trump) is actually purposefully trying to hurt the country.”

The US is determined to push ahead with tariffs for what it claims is a rebalancing of trade deficits. Picture: AFP

The NAB boss has been in close contact with friends and former colleagues in recent weeks, getting updates about the latest twists in the on-again, off-again tariff battle. Irvine spent years heading business banking with BMO (the former Bank of Montreal), before joining NAB nearly five years ago, and many of his former customers are right in the front line. More than 75 per cent of Canada’s exports go to the US. Some car components famously move between Canada, the US and Mexico as many as eight times before being finished.

The tariff fight has only served to unify the country by creating a real Canadian identity, Irvine says. There’s a rush to buy Canadian goods while boycotting American. One thing for sure is there’s plenty of pain ahead.

“No one wins here,” Irvine says.

Canada is battling an economic Goliath. However, Irvine believes his home country will get through this. There’s also a lesson for Australia after it failed to secure an exemption in steel and aluminium tariffs.

“At the end of the day, Trump is the deal guy. He’s doing these things to try and extract the best deal.

“I think it is for a period of time, not for a long time, and he’s doing this to extract value and to try and get a better deal for the US, not just for Canada, but for every country he negotiates with.”

The appointment this week of former Bank of Canada governor Mark Carney as the prime minister elect to replace Justin Trudeau has raised the stakes.

Irvine labels Carney as thoughtful and considered. He believes Carney will be able to go into talks with the White House with a clean slate and greater unity behind him.

However, at the risk of having an ice-hockey puck hurled his way, Irvine cautiously says there is some logic to Trump’s brutal ­policies.

NAB’s boss says the economy may have passed the worst.

The US is running steep trade deficits with some trade partners and there’s a desire to see that corrected. Trump too is clearly attempting to fortify America’s industrial base.

“Some of the policy endeavours are actually sensible in terms of getting other countries to buy more American goods and to focus on having a fairer trade ­balance,” he says.

“But the problem with a very aggressive tariff posture is that it creates inflation in the US, and it creates inflation globally, because everyone else retaliates.”

When The Australian caught up with Irvine he was in Newcastle, with a big session ahead meeting customers and staff.

Earlier this week the NAB CEO caught up with business customers in wine and mining country in the Hunter Valley. As a business banking boss Irvine was known to spend more time on the road with clients than locked in meetings at NAB’s Bourke Street headquarters in Melbourne.

It's a habit that’s been hard to kick, with Irvine keeping in touch with his customers when he ran the business bank, giving him his own informal panel to test the strength of the economy.

Despite what’s going in the rest of the world, Irvine says there is a case for optimism in Australia.

Last month’s interest rate cut was a turning point, he says. Even if the next rate cuts are drawn out – he’s tipping another two this calendar year – the message to take away from it is we’re now in a downward cycle on borrowing costs. This will gradually flow through to confidence.

There’s also noticeable strength in activity across Newcastle and the Hunter region. “It’s probably one of the best I’ve had and seen in my travels across Australia. It’s a market that’s growing,” he says. Critically, housing affordability remains “reasonable” in the Hunter region – compared to Sydney down the road. This is making a big difference to the local economy. “There are not many places I could say you can drive around and see new homes being built,” he said.

Housing affordability can be linked to improved economic activity. Picture: Getty Images

Victoria and Tasmania are still the laggards for economic activity, while Western Australia remains robust. Queensland will see a dip in activity following the cyclone, but is expected to quickly recover. NSW is patchy with strength in some parts. NAB’s monthly business confidence figures released this week softened slightly in February, although activity has started to edge up.

Irvine says his lending books and forward orders are healthy as businesses bet on growth.

“The first cut in the cycle that we got a few weeks back certainly has made a difference. We can see more strength in auction markets … 2025 is absolutely going to be a better year than 2024”.

“It’s not going to be amazing, but it’s going to be stronger. I think we’re through the worst of it.”

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Originally published as ‘No one wins here’: NAB CEO faces unifying moment in Donald Trump’s trade war