In fact, Australia’s largest steel maker was initially seen as a potential winner. Shares of Bluescope Steel jumped last week after Mr. Trump vowed to impose tariffs because it has operations in the United States. Investors saw the possibility that the company’s American arm could charge more for what it makes.
The bigger hazard for the Australian steel industry is that American tariffs will force steel makers in other countries to send more of what they make to Australia. That could result in leaner profits, price wars and local layoffs.
“If the exports get the tariffs whacked on them, we’re going to have surplus of steel and aluminum in the marketplace — and at the same time as the rest of the world is,” said Daniel Walton, national secretary for the Australian Works’ Union, one of the country’s largest blue-collar unions.
Could It Get Worse?
It could, if steel and aluminum tariffs lead to something more drastic.
Canadian and European officials have already publicly discussed ways they could retaliate. United States trading partners could specifically target products made in parts of the country that support Mr. Trump, such as soybeans from the Midwest and bourbon from Kentucky.
“Right now, it’s just steel and aluminum, but it can very easily become much more,” said John Tang, a senior lecturer at the Australian National University’s school of economics. “This would threaten the stability of global markets.”
Cascading tariffs could hurt Australia. Exports of goods and services account for roughly one-fifth of its economic output. Australia’s economy is particularly sensitive to the economic scene in China, its largest trading partner and a major buyer of Australian food and minerals. If broader tariffs hurt Chinese growth, Australia will feel the impact.
Why Isn’t Australia Exempt?
It was supposed to be, at least according to Australian officials.
Local media has widely reported that Prime Minister Malcolm Turnbull reached a handshake deal with President Trump at the Group of 20 summit last year to exempt Australia from steel tariffs. While Mr. Trump has kept the details to himself, he has said no country will be exempt.
Advertisement
Continue reading the main story
To many Australian officials, it feels like a betrayal.
“There’s a variety of reasons why Australia should be exempt, not least of which was the understanding reached at the G-20,” said Steven Ciobo, Australia’s trade minister, in an interview with local news media earlier this week.
The country has long been a central ally for the United States, but relations have sometimes been tested since President Trump came to office. Last year, the two leaders shared a contentious phone call. The two have taken pains since to put up a united front — at least until the tariff announcement.
“It appears now that a confidence guarantee, given verbally, counts for nothing,” said John Blaxland, professor of international security and intelligence studies at Australian National University. “In a relationship that has been about ‘shared values,’ it’s damaging. It’s deeply damaging.”
What Can Australia Do Now?
For now, officials and business leaders are publicly pushing the Trump administration to reconsider. But one option appears to be off the table for now: retaliation.
“There is no prosperity at all that flows from putting up trade walls or higher taxes on traded goods,” Mr. Ciobo told local media earlier this week.
Australia’s political posture is likely to remain measured.
“My sense in Australia is that most people are seeing President Trump as unbalanced and unduly influenced by emotional ups and downs: in how he responds to a phone call from Malcolm Turnbull, a comment from Kim Jong-un, or anyone across the spectrum in between,” said Prof. Blaxland.
Continue reading the main story
Article source: https://www.nytimes.com/2018/03/07/world/australia/trump-tariffs-australia.html?partner=rss&emc=rss
Speak Your Mind
You must be logged in to post a comment.