Pots and kettles: Trump trades barbs with China over trade

The International Monetary Fund (IMF) made the grim prediction in its latest October 2025 World Economic Outlook, reporting the global economy remains in “flux”.

“It means we have no freaking idea what’s going on because not only are prospects dim but so is the President of the United States,” said Greg Jericho, chief economist at the Australia Institute.

“Who the heck knows what thought-bubble brain-fart he’s going to do tomorrow, let alone what he’s done over the past six months.”

Discussing the report on the Australia’ Institute’s Dollars & Sense podcast, Mr Jericho said there was some ‘good news’ for Australia but overall it was ‘still pretty crap.’

“Our growth is doing better than most major economies, especially those big G7 economies.

“In April, they were thinking the economy this year would grow 1.6 per cent which is about half of half good. So now they’ve upgraded to 1.8 per cent.”

The global economy is now forecast to grow by 3.2 per cent this year, up from 3 per cent predicted in July, however IMF chief economist Pierre-Olivier Gourinchas notes, “trade tensions continue to flare up with no guarantee yet on lasting trade agreements”.

While the impact of Donald Trump’s tariff tantrums have been “smaller than expected”, Mr Gourinchas said it was thanks to swift trade deals, exemptions and countries re-routing supply chains.

Mr Jericho pointed out on the After America podcast that the weaker US dollar and a pre-tariff rush to import goods have also helped counter the impacts but warned the world is yet to feel the tariff’s full impacts.

“People just don’t know what tariffs are going to stick,” said podcast co-host, Elinor Johnston-Leek.

“It’s completely up in the air,” agreed Mr Jericho. “Just this week he [Donald Trump] came out and said, I’m going to put a 100% tariff on all Chinese goods on the first of November.

“It’s like, oh very good … we’re back to insanity again.

“We’re never quite sure if it’s going to up by 100 or is it an extra 100? This is a guy who thinks he can reduce the prices of pharmaceutical products down by a thousand per cent.”

The retaliatory tariff is in repose to China’s decision to restrict rare-earth exports.

Rare earth minerals are used to “power modern technology, from smartphones to wind turbines” to defence equipment.

“Donald Trump hasn’t taken nicely to this,” explained Mr Jericho, “he’s said that it’s morally unjust to act like they are …”

“The pot calling the kettle black a little bit,” pointed out Ms Johnston-Leek.

“It’s become very much a trade war,” said Mr Jericho. “China are letting everyone know that they know how to play too and they’re a bit smarter, a lot smarter.”

The US travel industry is also taking a hit amid the global uncertainty created by the Trump administration, with Australian holidaymakers deserting the United States in droves.

“Australians are not uncertain at all,” said Mr Jericho on the Australia Institute’s Dollars & Sense podcast. “They really are not wanting to go to the US certainly not in the numbers that we have in the past.”

According to newly released data from the Australia Bureau of Statistics, 28% fewer Australians travelled to the US in the past year than they did in the year before the pandemic.

The only other places with a bigger drop were Russia, Israel and New Caledonia; three countries currently involved in war or civil unrest.

Mr Jericho emphasised the US State Department’s recent decision to cancel the visas of six foreigners “because of the things they tweeted about Charlie Kirk”.

Not wanting to take the risk, data shows Australians are now opting to travel to Japan, South Korea, Indonesia and New Zealand.