With 25% tariff imposts hanging in the balance for our steel and aluminium producers who sell into the USA, Prime Minister Albanese has opted to concentrate on Australian lives instead of flying to Washington to try and convince the US president that we need an exemption.
This comes as talk of an April 12 election has been proved wrong, with the Government now preparing for a March 25 Budget, which undoubtedly will be a pre-election show aimed at winning back voters who’ve deserted Labor in the latest opinion polls.
The Australian’s Noah Yim reported the following on the PM’s thinking: “The Prime Minister on Sunday said his sole focus in the weeks before the March 25 budget would be the aftermath of Cyclone Alfred, despite US tariffs on steel and aluminium exports in Australia coming into effect on Wednesday.”
In his own words, the PM said: “My focus is on the lives of Australians, the risk that Alfred represents to people in southeast Queensland and in northern NSW – not on votes.”
That said, as Scott Morrison learnt when he holidayed in Hawaii as Australia burned, prime ministers need to be on the ground when natural disasters strike.
At the moment, if Donald Trump changes his mind on tariffs for local steel and aluminium manufacturers, it would be a win for Ambassador Kevin Rudd, as he is the main negotiator in Washington because Trade Minister Don Farrell reportedly stayed at home expecting an April 12 election would be called!
Clearly, history has shown that President Trump is not a consistent fellow. Anything could happen, with the tariffs earmarked to start on Wednesday. If we’re included, while it won’t be an economic disaster, local producers will confront money-loss issues.
Looking at our aluminium producers, here are some important facts:
- Aluminium is an $18 billion industry.
- It’s our biggest exporter of manufactured products.
- 85% of what we make is exported.
- 10% of our total aluminium production goes to the US.
- This represents 2.5% of US consumption of aluminium products.
- The US only produces 50% of its needs.
- The 25% tariff ban on Chinese goods could lead to dumping worldwide.
Ironically, even if we get a Trump tariff reprieve, the tariff on China, which is the biggest exporter of aluminium into the US, will mean that China will have to find other markets, and its cheaper product will create competitive chaos in non-US global aluminium markets.
Given we export 85% of the aluminium output we make, these Trump tariffs are set to have huge direct and (more importantly) indirect negative effects that both the economy and the Prime Minister really don’t need right now.
