“The tariffs are going to have a deflationary impact [on Australia’s economy],” Gross told Australian Broker. “First, some people are going to lose contracts and lose jobs because of this, and that reduces incomes and pushes down inflation. And second, a lot of the tariffs might have a diversionary effect. If China can’t sell in the US market, they’ll focus on the Australian market. And that’ll mean cheaper goods for us from every country that’s been hit, and that means every country in the world. So I suspect inflation is going to be on a lower trajectory now, and that will give the RBA more scope to cut interest rates.
