Australia Current Account Surplus Soars To 2nd Highest On Record: Can It Last?

On the strength of liquified natural gas(LNG), Australia's current account surplus surged to the 2nd highest on record.

A couple of Tweets will help explain the surge.

Will It Last?

Let's take a diversion for a second to understand the importance of my question.

Trade Diversion

The Financial Times reports US-China tariff war will divert trade to EU, says UN

The FT notes that Brazil replaced the US as the main supplier of soybeans to China. Mexico and the EU are even bigger beneficiaries.

"Vietnam, Australia, Brazil, and India are also expected to benefit from export gains, worth about 3.5 per cent or more of their total exports."

OK, I accept that. But how long will that last?

Trump China Deal

I am making some assumptions here, but I presume there will be a deal between the US and China. If so, soybean exports will undoubtedly shift back to the US from Brazil.

What else might we see?

How about LNG that Trump wanted to sell to Europe?

Will, that go to the US?

Perhaps not, because I am making an assumption the US can deliver this output.

Economic Collapse

Third, and most worrying for Australia is the implied assumption that Australia's economy will not totally collapse. If that happens, imports could drop substantially even as LNG and other exports continue.

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