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Here’s what you need to know today

• After plenty of anticipation, US President Trump has unveiled his latest round of tariffs at an event he dubbed ‘Liberation Day’. For Australia, we will be swept up in Trump’s new global minimum 10% tariff for all goods entering the US, except for from Canada and Mexico. Fortunately, Australia was not hit with any additional tariffs despite plenty of noise in recent weeks from US trade officials about Australia’s non-financial trade barriers. (The Guardian)
  
  

• Australian beef producers will be nervous after comments Trump made in his speech, calling out Australia’s biosecurity laws (one of those non-financial trade barriers mentioned above) and commenting that as a result Australia buys no US beef despite the US buying $3 billion of Australian beef. Trump did say “they ban American beef… we’re doing the same thing right now starting at midnight tonight.” However, no ban has come so far. (9 News)
  
  

• Australian Prime Minister Anthony Albanese responded by saying the tariffs are “not the act of a friend” but has ruled out implementing reciprocal tariffs on US exports to Australia. (Reuters)
  
  

• The other key announcements from Trump’s speech: China would face tariffs of 34%, the European Union 20% and Japan 24%. These come into effect almost immediately alongside his previously announced 25% tariff on all auto imports. The largest tariffs went to Southeast Asia with Cambodia (49%), Laos (48%) and Vietnam (46%). (The Diplomat)
  
  

• Tesla delivered 337,000 cars in the first quarter of 2025, down 13% from 387,000 in the same quarter last year. Meanwhile, BYD announced it delivered 1 million cars in total and more electric cars (416,488) than Tesla in the first quarter. (Bloomberg)
  
  

• However, Tesla’s share price after reported surfaced that President Trump has been telling his Cabinet that Elon Musk will step back from his role at DOGE in the coming weeks. Tesla shares were up 5% on the day. (Quartz)
  
  

• Amazon has reportedly put in a bid to buy TikTok as a deadline nears for the American operations to separate from its Chinese parent company or be banned in the US. Strangely, the acquisition offer wasn’t sent to ByteDance (TikTok’s owner) but rather to Vice President JD Vance. Sources told the New York Times that ByteDance is not taking the offer seriously. (NY Times)

What the…?

Over the past year, US Border officials have caught more people smuggling eggs into the country than they have smuggling fentanyl. As US consumers face egg prices that are in some cases double what is being paid in Canada or Mexico, plenty of Americans are looking to source their own eggs.

In January and February of 2025, US Border officials sized fentanyl on 134 occasions. In that time, they seized egg products 3,254 times. (CTV)

Investing is a lifelong journey

Here’s what you can learn today.

Pro’s and Con’s of Debt Recycling

Community Question: What are the pros and cons of debt recycling as an investment strategy for Australian homeowners?

We put this question to Matt Ingram, financial adviser and Partner at Northhaven Wealth

Simply put, debt recycling is the process of converting non-deductible debt into deductible debt.

What’s non-deductible debt? The most common example is your home loan. You can’t claim interest on the loan as a deduction, so it’s often referred to as ‘bad debt.’

What’s deductible debt? The most common example is a loan to buy shares, investment properties, or a business. You can claim interest on the loan as a tax deduction because the loan is being used to produce income. This is often referred to as ‘good debt.’

Essentially, good debt is a lot cheaper than bad debt. For example, if you earn $100,000 per year, your marginal tax rate is 30% plus the 2% Medicare levy. This means come tax time, you can get 32% of the money you spent on interest repayments on good debt back in your tax return.

So, how do you convert your bad debt into good debt?

Let’s say you have a $1,000,000 mortgage (bad debt) and $100,000 sitting in your offset account from cash that you’ve saved up.

Simply put, you can pay down the $100,000 off your bad debt, then redraw it and use it to invest in shares or an investment property, turning it into good debt. You still have $1,000,000 of total debt, but now only $900,000 is bad debt and $100,000 is good debt.

As you invest the $100,000 in a share portfolio or an investment property, you can direct any income (dividends) to the offset account. Let’s say it builds up to $100,000 again a few years later and boom – you pay off some more of your bad debt and convert it to good debt.

The main downside to this strategy is its complexity – structuring the loans correctly, investing in the right assets, and ensuring borrowed funds don’t mix with unborrowed funds (leading to an accountant’s nightmare). You need professionals such as a financial adviser, mortgage broker, and accountant on your side.

The main upside, however, is that when done correctly, it can dramatically accelerate the rate at which you pay down your bad debt, leaving you with good deductible debt invested in growing assets.

Interested in speaking to Matt or another of our hand-picked financial advisers? Fill out the form on our website and we’ll put you in touch.

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