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Trump could 'disrupt' Aust-US alliance: US

AAP logoAAP 19/09/2016 By Peter Mitchell, AAP US Correspondent

Donald Trump as US president could unleash a trade war, plunge the US economy into recession and disrupt alliances with nations including "longtime ally Australia", according to new analysis by a Washington DC-based think tank.

The Peterson Institute for International Economics report released on Monday assesses the trade agendas of presidential candidates Mr Trump and main rival Hillary Clinton.

Both are criticised for their opposition to the proposed Trans-Pacific Partnership trade deal between 12 nations including Australia, the US, New Zealand, Japan, Canada and Singapore.

But Mr Trump's "belligerent trade policies", according to the report's analysis, would devastate viable American businesses and be disastrous for US economic well-being and national security.

"Make no mistake, the proposed trade policies of both Hillary Clinton and Donald J Trump, the 2016 Democratic and Republican Party candidates for president, would deeply harm the American economy," Adam Posen, president of the self-described non-partisan Peterson Institute, wrote.

Mr Trump has threatened to "rip up" existing free trade agreements with Australia and 19 other nations and "make really good ones" and slap a 35 per cent tariff on Mexican imports and 45 per cent on China's.

"Withdrawal of support for TPP is bad enough but the ramifications of Trump's trade policies go much farther, threatening to inflame relations with China and disrupt existing alliances with free trade partners, including South Korea, Singapore, a critical partner in Southeast Asia, and longtime ally Australia," the report states.

Export-reliant US industries that manufacture machinery used in the information technology, aerospace and engineering sectors are forecast as being worst hit by a trade war incited by Mr Trump.

"Trump goes much farther than Clinton on trade and investment policies," according to the report.

"He threatens to slap punitive (and possibly even firm-specific) tariffs on products imported from China and Mexico, withdraw from the World Trade Organisation and abrogate existing preferential trade agreements such as the North American Free Trade Agreement and the Korea-US Free Trade Agreement.

"If implemented, these proposals would provoke retaliation by US trading partners, unleashing a trade war that would send the US economy into recession and cost millions of Americans their jobs."

Ms Clinton's proposed trade and international economic policies "would damage American well-being" primarily due to her opposition to TPP.

"While Clinton's stated trade policy would be harmful, Trump's stated trade policy would be horribly destructive," the report states.

The report's release comes as Australian Prime Minister Malcolm Turnbull and Foreign Minister Julie Bishop attend the United Nations General Assembly in New York this week and lobby US leaders to move forward on the TPP.

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