The OECD has cut its forecast for global growth this year to 2.9% from 3.1% as recently as March, warning US tariffs are weighing on the economy.
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
This is episode number 17 in our series for 2025 and today’s date is Friday June 6.
First, I’ll be talking to I’ll be talking to Aaron Tighe, a sales coach who wrote What You Already Know & Don’t…: The B2B Sales Playbook. Aaron is a former footballer who worked for Macquarie Technologies. He can tell us about sales techniques that leverage AI tools in the right way to help boost sales and the importance of active listening instead of overactive sales pitch spewing.
And I’ll be talking to EY economist Cherelle Murphy about the RBA’s latest rate cut and whether we can expect more this year.
But first, let’s talk to Aaron Tighe.
So what’s happening in the news?
Global economic growth is slowing more than expected only a few months ago as the fallout from the Trump administration’s trade war takes a bigger toll on the U.S. economy, the OECD said on Tuesday, revising down its outlook. The global economy is on course to slow from 3.3% last year to 2.9% in 2025 and 2026, the Organisation for Economic Cooperation and Development said, trimming its estimates from March for growth of 3.1% this year and 3.0% next year. But the growth outlook would likely be even weaker if protectionism increases, further fuelling inflation, disrupting supply chains and rattling financial markets, the Paris-based organisation said in its latest Economic Outlook. “Additional increases in trade barriers or prolonged policy uncertainty would further lower growth prospects and likely push inflation higher in countries imposing tariffs,” OECD Secretary General Mathias Cormann said as he presented the report. If Washington raised bilateral tariffs by an additional 10 percentage points on all countries as compared with the rates in force as of mid-May, global economic output would be about 0.3% lower after two years, Cormann added. U.S. President Donald Trump’s tariff announcements since he took office in January have already roiled financial markets and fuelled global economic uncertainty, forcing him to walk back some of his initial stances. Last month, the U.S. and China agreed to a temporary truce to scale back tariffs, while Trump also postponed 50% duties on the European Union until July 9. The OECD forecast the U.S. economy would grow only 1.6% this year and 1.5% next year, assuming for the purpose of making calculations that tariffs in place mid-May would remain so through the rest of 2025 and 2026. For 2025, the new forecast marked a sizeable cut as the organisation had previously expected the world’s biggest economy would grow 2.2% this year and 1.6% next year.
While US President Trump and Chinese President Xi Jinping have significant issues to iron out, from critical minerals to semiconductors, but so far there’s no sign of talks. They have led to increasingly hostile commentary from both sides, putting last month’s agreement to lower tariffs for 90 days in a tenuous position. National Economic Council Director Kevin Hassett even suggested Sunday on ABC that trade negotiations with other nations are being held up by the wait for this call between Trump and Xi. But it’s far from clear whether a call between the two leaders, who apparently have not spoken since before Trump’s inauguration, can resolve the growing issues. The uncertainty is more pronounced after weeks of promises that a call is in the offing but no confirmation so far of when it will take place. A range of Trump officials were pressed over the weekend on timing offered little. Treasury Secretary Scott Bessent expressed hope on CBS for “something very soon,” while Commerce Secretary Howard Lutnick promised on Fox that Trump is “going to go work it out” without offering a timeline. Hassett added he was hoping for a call this week, but said, “You never know in international relations.” Trump and his team are charging that China has already violated the 90-day trade truce by not loosening trade restrictions for these building blocks in everything from computers to electric vehicle batteries to jet engines to medical devices. But the Chinese Ministry of Commerce reacted Monday morning to the weekend’s charges by denying the Trump administration’s claims and accusing the US of its own actions to undermine the deal. Issues that the Chinese government cited were new export controls on semiconductors, the halting of chip design software, as well as the revocation of Chinese student visas.
The legitimacy of President Trump’s tariffs is being questioned by US courts, but the president is showing no signs of backing off his favorite tool – more tariffs, On Wednesday, the tariffs that Mr. Trump imposed on foreign steel and aluminum are set to double to 50%, a move that the president has said will better protect domestic metal makers. The increase comes as the U.S. government this week faces off with states and businesses that have sued over the president’s tariffs. Both sides will be required to submit more information as judges work toward final decisions on the legality of Mr. Trump’s steepest tariffs. The U.S. Court of International Trade ruled last week that some of the steep tariffs that Mr. Trump had imposed were illegal, a significant setback for the president’s agenda. But a separate court temporarily paused that decision less than 24 hours later. As judges weigh that appeal, the tariffs in question — which include the levies Mr. Trump imposed on Canada, Mexico and China for what he said was their role in the fentanyl trade, as well as the global tariffs Mr Trump announced, and then quickly paused- in April — are expected to remain in effect until at least June 9. On Monday, a group of businesses behind that original lawsuit urged the court to reject the government’s newest request. Lawyers for companies including VOS Selections, a wine importer, said they would face “irreparable harm” — as would “millions of consumers”— if Mr. Trump can maintain many of his tariffs while the legal fight proceeds. A legal win by the businesses would make them eligible to be reimbursed for hefty tariffs that they have paid in recent months. But lawyers for VOS Selections said that relief may not come soon enough — especially for many businesses that are investing heavily to reorganize their supply chain or are at risk of going out of business. “What good is a refund of the tariffs paid to a business that is bankrupt and no longer exists?” the complaint read. A ruling against the government would strip the president of the use of a legal authority he has used to raise and lower tariffs on a whim, by declaring first fentanyl and then the U.S. trade deficit to be an “international economic emergency.” The Court of International Trade ruled that Congress had not given the president such expansive authority. But the president has many other ways to impose tariffs. On Sunday, one of Mr. Trump’s top trade advisers insisted that the president would find methods to target other countries even if the trade court ruled against some of his levies. “Rest assured, tariffs are not going away,” Howard Lutnick, the commerce secretary, said on “Fox News Sunday.” He said the president possessed “so many other authorities” that if the court ultimately sided against the White House, Mr. Trump could still “bring on another or another or another.”
Australia and the EU are poised to negotiate a trade deal as insurance against Trump’s tariff war. Trade Minister Don Farrell is in Paris this week for his first face-to-face talks with the Europeans since negotiations collapsed in October 2023 and European Commission President Ursula von der Leyen has pencilled in a visit to Australia within the next few months in a sign of growing determination on both sides to strike a free trade deal. Farrell, who is attending an OECD trade ministers meeting, said the gathering had the largest attendance of ministers ever, reflecting the concern sparked by Trump. On Wednesday night Australian time, he has a one-hour meeting scheduled on the sidelines with the European Commissioner for Trade and Economic Security, Maros Sefcovic. After that, officials from both camps will hold further talks in Brussells in an attempt to break the impasse over agriculture that caused talks to collapse more than 18 months ago. The talks follow a meeting in Rome two weeks ago between Anthony Albanese and von der Leyen. “He told her we’re determined to get this done,” Farrell said. “The world has changed since we last met. Australia and Europe have to be the adults in the room.”
After winning a huge majority which might see his government in office for at least two more terms, Australian Prime Minister Anthony Albanese has pushed back against the Trump administration’s higher steel tariffs and pressure on Australia to spend more on defence. This sets up a testing first face-to-face meeting between the prime minister and US president at the G7 in a fortnight’s time. Albanese declared on Sunday that the US was committing an economic “act of self-harm” by increasing prices for American consumers, after Trump shocked allies and partners by doubling tariffs on foreign steel and aluminium sold in the United States to 50%. Albanese also resisted pressure from US Defence Secretary Pete Hegseth for Asian allies including Australia to potentially more than double their defence spending to 5% of GDP to counter China’s rise in the region and its ambitions to control Taiwan. While Defence Minister Richard Marles suggested he was open to increasing military spending after meeting Hegseth in Singapore, saying that China had undertaken the biggest defence expansion by any nation since World War II, his boss Albanese argued that Labor had already added $10 billion to defence outlays, which will take the projected rise in defence spending to 2.3% of GDP by 2033. “What we’ll do is we’ll determine our defence policy,” Albanese said in Hobart. “What we’ll do is continue to provide for investing in our capability but also our relationships within the region.” The prime minister’s frank response is one of his strongest rebukes of the US administration after he also had criticised Trump’s tariffs during the election campaign. The prime minister is poised to appeal directly to Trump for an exemption for Australia when he meets Trump on the sidelines of the Group of 7 meeting in Canada on June 16-17. A potential separate trip to the White House has not been scheduled at this stage.
Opposition finance spokesman James Paterson has put the Coalition’s nuclear power policy to the sword, saying lifting the moratorium on the energy source and leaving the rest to the private sector was more consistent with Liberal Party philosophy than building and owning generators. The move cements last week’s deal to water down the policy as part of the new Coalition agreement. It has killed off the prospect of nuclear power in Australia, at least in the medium term. Clean Energy Investor Group CEO Richie Merzian said that because of time and cost, there was no appetite in the private sector to invest in nuclear power even if the moratorium was lifted. But the Grattan Institute’s Tony Wood said nuclear power, especially small modular reactors, could be back in play within 20 years if the current policy of renewables firmed by gas and batteries doesn’t go as planned. “You can rule it out for now, but I wouldn’t rule it out coming back in the future,” he said.
The Business Council of Australia has warned the country risks being left behind without a clear, government-led national artificial intelligence strategy. It’s called for faster approvals for new data centres, plans for a skills transition and globally significant moonshot missions. In a report, Accelerating Australia’s AI Agenda, the peak industry group highlights six key areas, including AI adoption, skills, regulation, infrastructure, data, and research and development, in which it says Australia needs a clearer vision in a bid to become a global leader by 2028. Among 16 actions advocated by the BCA are increased funding for the National AI Centre, which was only given $21.6 million over four years, so it can help more small and medium-sized companies to identify AI solutions and get themselves in a position to deploy them. It also suggests reform in skills development pathways, with a national AI apprenticeship model and industry-led micro-credentials; new risk-based regulations that rely on existing laws rather than creating EU-style AI laws; and simplification of the laws governing the approval of data centres, which it says are currently strangled by red tape. Among 16 actions advocated by the BCA are increased funding for the National AI Centre, which was only given $21.6 million over four years, so it can help more small and medium-sized companies to identify AI solutions and get themselves in a position to deploy them. It also suggests reform in skills development pathways, with a national AI apprenticeship model and industry-led micro-credentials; new risk-based regulations that rely on existing laws rather than creating EU-style AI laws; and simplification of the laws governing the approval of data centres, which it says are currently strangled by red tape.
Soul Patts is seeking to create a family office by merging with building materials giant Brickworks in a deal that turns the country’s second-oldest listed company into a $14 billion portfolio manager in the hope of attracting shareholders who want to invest like some of the world’s wealthiest people. “What we’re creating is effectively a listed version of a family office,” said Soul Patts chief executive Todd Barlow said, adding that the assets would mimic how the world’s wealthiest people invested. When finalised, the merger will create a $14 billion company that will be invested across privately owned companies, large and small listed companies, private credit and $3.2 billion in real estate in part due to Brickworks’ portfolio. The historic merger undoes an arrangement in place since 1969 – Soul Patts owns 43% of Brickworks, which has a 26% stake in Soul Patts – that has been under constant attack from activist shareholders. Both businesses are backed by the billionaire Millner family, who will emerge with about 8% of the combined company, which will be known as Washington H. Soul Pattinson and Company. Robert Millner will chair the combined business. The 74-year-old is the fourth Millner family member to run Soul Patts. While Soul Patts began as a pharmacy business, it now has a sprawling investment portfolio from Brickworks to New Hope, a coal producer, TPG Telecom, Pengana Capital and BKI Investments. The company has gradually expanded its holdings into public and private assets such as listed equities and private credit, morphing into an investment company.
And that’s it for this week.
And next week, I’ll be talking to therapist, lawyer, mediator and personality expert Bill Eddy, the co-founder and Director of Innovation at the High Conflict Institute, who will tell us how to stop workplace bullies before they start.
And I’ll be talking to AMP chief economist Shane Oliver about how the market is going in response to Trump’s tariffs.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com
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Looking forward to the next episode of Talking Business.
