What is the impact of tariffs on Australian industry?
Australian materials engineering know-how to be a factor in tariffs
Professor Simon Ringer, Pro-Vice-Chancellor (Research Infrastructure) at the University of Sydney and a materials engineer, says Australian industry, supported by great R&D at our universities has worked hard over the years to secure sophisticated market niches in the US steel and aluminium markets.
“For example, one could imagine that products such as Bluscope’s COLORBOND® steel could be a key element of the building and construction supply chain around Los Angeles as that rebuild gains momentum following the tragic fires there,”
“If the tariffs go ahead, there are Australian materials engineering capabilities that will be a factor here alongside those factors that have already received attention such as the macro trade position and the defence relationship. It is easy to imagine that there will be a strong desire to review the details to seek out opportunities for partnering in a way that ensures the trading interests of all parties are maximised.”
Australian industry, supported by great R&D at our universities has worked hard over the years to secure sophisticated market niches in the US steel and aluminium markets.
Professor Simon Ringer
Pro-Vice-Chancellor (Research Infrastructure) at the University of Sydney
“Australian industry, supported by great R&D at our universities has worked hard over the years to secure sophisticated market niches in the US steel and aluminium markets.”Professor Simon Ringer
Pro-Vice-Chancellor (Research Infrastructure) at the University of Sydney
Potential global trade war greatest risk for Australia
Dr Valdimir Tyazhelnikov, an expert in international trade from the School of Economics, says Australia exports approximately 10 percent of its aluminium and steel to the United States.
If tariffs were imposed, these exports could be redirected to other markets with relative ease.
“Although Australian aluminium exports to the US have grown significantly in recent years, Australia remains a minor supplier. It is the 10th largest exporter to the US, accounting for just two percent of total US aluminium imports. In contrast, Canada dominates the market with a 40 percent share, followed by China, Mexico, and the UAE,” says Dr Tyazhelnikov.
“While Australia’s overall aluminium exports have remained stable, shipments to the US have been highly volatile. This is partly due to the small initial export volumes and partly due to fluctuations in aluminium prices,
Dr Tyzazhelnikov says If the US imposes tariffs on global steel and aluminium imports but grants Australia an exemption, Australian exporters would gain a competitive edge in the US market.
On the other hand, if exemptions are not granted to any countries, Australian steel and aluminium would remain competitive compared to other exporters and this tariff would be less damaging than tariffs imposed exclusively on Australia.
“The greatest risk for Australia is a potential global trade war, which could disrupt supply chains and weaken manufacturing activity across East and Southeast Asia. Given that Japan, Korea, and China are key export destinations for Australia, such disruptions could have significant negative economic consequences.
Image caption: US President Donald Trump displays an executive order as Howard Lutnick (R), chief executive officer of Cantor Fitzgerald LP and US commerce secretary nominee, watches in the Oval Office of the White House in Washington, DC, USA, on 10 February 2025. Trump ordered a 25 percent tariff on steel and aluminum imports.
Image credit: EPA/AL DRAGO / POOL /AAP PHOTOS
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