Where your focus should be (no matter what the markets are doing)

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May you live in interesting times.

After the shock of the COVID-19 pandemic and associated lockdowns and border closures, we could be excused for thinking that we had experienced our fair share of ‘interesting times’ for this decade.

Obviously not.

U.S. President Donald Trump announced his new tariff regime last week; one that impacts almost every nation.

Australia’s staunch and unwavering alignment with U.S. interests, especially military ones, over the decades since WW2 has not spared us a 10% tariff.

Global financial markets reacted swiftly, sending market indicators and benchmarks plummeting at rates not seen since COVD times (see chart, above).

The upcoming federal election has added to the local uncertainty.

It’s easy to be caught up in the screaming headlines and the nausea of a declining superannuation balance however, as a wise sage once said, ‘a week is a long time in politics’.

Here’s a few facts and suppositions that might provide some context to your personal and professional circumstances (and therefore whether what’s happening is good or bad news for you and your employer).

Trump is notorious for ‘flip flopping’. Given the number of times he has changed his mind on many topics (often based on the view of the last person he spoke to, or who flattered him) he may well change his mind on the efficacy of tariffs. Given Trump’s many self-congratulatory tweets about the strength of the Dow Jones Industrial Index and the NASDAQ during his first term in the White House, the depth of the markets’ negative reaction to the prospect of a global trade war must be more than slightly unnerving for him. I am not predicting Trump will walk back his tariff policy but neither would it surprise me if he did.
Modelling by The Budget Lab at Yale, a non-partisan research centre, indicates that the 2 April tariffs alone may subtract 0.5 percentage points from US real GDP growth in 2025 and a further 0.1 percentage points in 2026. However, when all US tariffs and retaliation from trading partners is considered, the impact is larger — US real GDP growth may be 0.9 percentage points lower in 2025. There has also been conjecture of much worse outcomes (including a US recession) from many analysts (as quoted in Deloitte Access Economics weekly newsletter, 7 April 2025)
Just over a quarter of Australia’s GDP is from exports, valued at just over half a trillion (US) dollars so although trade is important, domestic demand overwhelmingly drives our economy (both China and the U.S. have even less reliance on export income as a percentage of GDP).
China is our largest market for exports and the United States is our fifth largest. Our exports to China are about 6.5 times more valuable than our exports to the United States. China is the most significant target of U.S. tariffs so an ongoing trade war between the two countries will slow economic growth in both countries, however it’s a slowing Chinese economy that would have the greatest economic impact on Australia’s economic health.
If the Chinese government responds to tariffs imposed by the U.S. by injecting huge amounts of stimulus (i.e. cash) into its economy, then the impact on the Australia economy will be lessened.
The economic impact of slowing growth will impact all sectors but have a more significant impact on some, compared to others. Health care and social assistance is easily our largest employing sector, with demand driven by the local population. A trade war barely moves the needle of local demand. Construction is our second-largest employing sector. The acute housing shortage means residential demand will barely change with a global trade war however commercial construction is more vulnerable to contraction as an economic slowdown reduces business confidence and the corresponding investment in new construction-based assets (eg. office blocks, industrial parks and production facilities). The Education and training sector will see no change in demand across K-12 education but the tertiary sector, heavily reliant on students from China, South Korea and other Asian countries whose largest export market is the United States, may be more significantly impacted.
Sectors highly exposed to demand fluctuations in the US market due to tariffs, such a mining and agriculture, are relatively minor sectors when it comes to the labour market. Although a mine closure (or four) will generate headlines and would be unwelcome news for the workers impacted, the cumulative job losses would barely be a rounding error in the context of the 15-million-person Australian labour market.
The Australian dollar has hit a five-year low against the U.S. This will make visiting Australia even cheaper for international tourists, especially those from America. With many Americans looking for a temporary respite from the Trump craziness, a holiday across the other side of the Pacific Ocean has become a lot more attractive, and cheaper, than it was pre-Trump 2.0. After the decimation of international tourism due to the COVID border closures, a surge of international visitors would be welcome news for many local hospitality and tourism operators.
A lower Australian dollar is also good news for Australian companies looking to expand into global markets and as well as for those existing exporters seeking new markets outside the U.S. It’s also good news for exporters whose existing contracts are in USD (although clearly bad news for importers whose contracts are in USD).
A slowing local economy will put downward pressure on interest rates. Lower interest rates put more money back in the pockets of mortgage-holders, stimulating consumer demand and also making business investment with borrowed money less expensive, hence more attractive.

No matter what happens (and I certainly have no idea where this all might end), the impact on the local recruitment industry is highly unlikely to be as shocking as the impact of the COVID lockdowns and border closures.

If you came through that period with your job or business intact then I am very confident you can do even better this time (buoyed by the confidence of your previous success).

For those who have started a recruitment or staffing businesses or joined the sector since the COVID lockdowns ended, the simple urging I have of you is simple – keep your focus on the things you can control, don’t worry about the things you can’t control.

Nobody reading this has any control over Trump’s tariffs, the global economy or the Australian Government’s budget. Notice what’s happening with political and economic and seek to understand how these might impact you or your business but don’t waste time worrying.

The single most important thing within your control is your outbound activity.

Consistently speaking to candidates, clients, prospects, industry colleagues and stakeholders, will help you understand what is happening or likely to happen at a level that directly impacts you – the current and projected future demand for staff.

And it’s always been so.

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