The astute among you will have noticed there’s an election going on in the US.
It’s been dubbed the most important election of modern times — some say in history. Of course, the global COVID-19 pandemic has added some additional and frankly unwelcome drama into the mix.
With the first results starting to roll in, this election is, rightly, dominating international airwaves today. But for Australian business owners, it’s more than a spectator sport.
Putting divisive personalities, problematic pasts and limelight-hogging flies aside, what could the outcome of this momentous election really mean for the Australian economy, its small businesses and its innovative exporters?
The Australian economic impact
Speaking to SmartCompany, Jared Mondschein, a senior research fellow at the University of Sydney’s United States Studies Centre, notes that no matter the industry, if there’s one thing businesses want, it’s stability and certainty.
“With a Biden administration we will likely have more of that,” he says.
While there is a possibility a Joe Biden administration could put some pressure on the Australian government — for example, in relation to its approach to climate change — it likely wouldn’t happen any time soon, and probably won’t come as a surprise.
“The Biden team is very open about the fact that they want partners and allies on board, particularly given the strategic competition with China,” he adds.
President Trump, however, is a little less predictable and tends to move fast.
For example, Australia has thus far “escaped Trump’s wrath” with regards to steel and aluminium tariffs, Mondschein notes. That could change at any time.
And, further down the track, a re-elected Trump government could take aim at Australian energy exports, particularly liquid natural gas (LNG), Mondschein suggests.
“If, for instance, the Trump administration wants to really use energy exports as a way to power through the economic downturn they could be coming at loggerheads with export markets.”
“Australia is the largest LNG exporter, and the US is not too far behind,” he says.
Small business matters
When it comes to small business though, there are other things to consider.
There’s talk — although nothing concrete — that Biden might revisit the Trans-Pacific Partnership, a trade agreement between 12 nations, including the US and Australia, which fell apart after Donald Trump withdrew the US in January 2017.
A new deal between the remaining 11 countries was drawn up, and came into effect in 2018.
If the US rejoins that agreement, or something similar, the opening up of more markets to the US could see Aussie exporters displaced.
“Right now, Australian firms have an advantage over US firms,” Mondschein explains.
“It wouldn’t make US firms have a more advantaged position, it would just put them all on an equal footing,” he adds.
“That covers everything from digital trade to agriculture to bio and pharmaceutical products.”
Innovation needs immigration
Finally, there are a number of Australian tech businesses and startups that have a significant presence in the US, and often hundreds or even thousands of employees.
Those employees are Australian expats, US citizens and immigrants from all over the world.
The Trump administration would likely see “further crackdown on skilled immigration”, Mondschein says.
The focus here seems to be on temporary work visa applications from Indian and Asian workers. And, while he doesn’t expect Aussies to be caught in the crosshairs here, nothing is impossible.
“They really do not like immigration in general,” he says.
“That’s something to be concerned about.”
Equally, particularly in the startups and innovation sectors, a lot of businesses rely on engineering talent coming out of Asia.
“Those Australian startups in the US could face some issues getting skilled workers because of the continued crackdown on immigration.”
Under Biden, on the other hand, it’s unlikely we would see a further crackdown, Mondschein says. If anything, there would be “a more strategic view” of skilled migration, and a focus on boosting the US’s innovation capacity.
“In many ways, a Biden administration could provide some big opportunities for innovative Australian firms.”