Market exuberance swirling US President Donald Trump’s Inauguration this week, began to shift to uncertainty, as the world turned its attention to the economic reality: what will happen next?
For anyone closely following the Trump campaign, the path to the White House has been relatively uneventful.
His arrival was never in doubt, but just which Trump would turn up remained a mystery.
Any doubts were immediately put to bed however as he took to signing executive orders like a man on a mission.
Australians watching his fervour were reminded of his ongoing threat of sanctions on China and how this could play out for us.
All of a sudden things got real.
Iron ore took a hit early as fears over a 10 percent tariff on Chinese exports sent the price of Australia’s largest export tumbling.
Base metals were also down.
There is no doubt that Trump’s rhetoric puts Australia in a tight spot.
A trade war between the world's two largest economies will force Australia to balance delicate diplomatic and economic relationships.
Trade experts warn that Australia will likely face mounting pressure to choose sides in this global economic conflict.
This dilemma could potentially disrupt our crucial trade ties with both nations, placing billions of dollars in exports at risk.
The mining and agriculture sectors, pillars of the Australian economy, are particularly vulnerable.
On the diplomatic front, Australia faces an increasingly complex balancing act.
As a long-standing US ally with deep economic ties to China, the country must carefully navigate its foreign policy to avoid alienating either superpower.
Any escalation in tensions in the South China Sea may see Australia pulled into military cooperation with the US, potentially straining our relationship with China further.
Australian tech companies and research institutions could also face new restrictions on collaborating with Chinese entities, should tensions with the US sour further.
Could, maybe, might.
There’s certainly a lot of water to pass under the bridge, but if Trump’s first few days are anything to go by, Australia will be watching and waiting nervously.