The fallout from U.S. President Donald Trump’s announcement of a tariff on steel and aluminium products continues as Australia prepares for a trade war by refocusing on its existing anti-dumping measures as a means of retaliation.
The announcement of the tariffs came as a shock to the Turnbull government as it assured Australians last year that the country would be exempted from such measures.
According to news reports, Trump had promised Turnbull that Australian steel and aluminium products would be exempted from any tariffs when the world leaders met last year.
Those who witnessed the exchange were U.S. Treasury Secretary Steven Mnuchin, U.S. Commerce Secretary Wilbur Ross, White House Chief Economics Adviser, Gary Cohn, Australia’s Finance Minister Matthias Cormann and Australia’s Deputy Secretary of the Department of Prime Minister and Cabinet, David Gruen.
President Trump is planning to impose a 25% import tariff on steel and 10% on aluminium. Shadow treasurer Chris Bowen believes the move would hit Australia’s exports hard. Bowen estimates Trump’s tariffs would affect $240 million worth of steel and $70million worth of aluminium. The government may view the act as a threat to national interest and trigger a trade war:
“I think we should look at all options in the national interest. The government would have full support of the Labour party for anything it does to convince the United States, and if that’s not successful then obviously the government would be within its right to consider what comes next.”
Bowen believes that if Australia does get an exemption, the tariff plan would affect other countries and may result in dumping activity that would severely impact the local steel and aluminium industry.
Trade Minister Steve Ciobo shares his opinion that the tariffs are a precursor to a trade war and would eventually lead to a global recession. Ciobo believes that Australia should do everything that it possibly can to protect the national interest.
Tony Dixon, CEO of the Australian Steel Institute is urging people to remain calm as details of Trump’s tariffs have not been finalized. However Dixon shares the opinion of Ciobo and Bowen that Australia should find ways to defend its local industries. Dixon suggested implementing the World Trade Organization’s (WTO) provisions for anti-dumping legislation:
“We need to wait until the air clears a little bit, with more information coming out of the minister’s office or from the Department of Trade, hopefully over the next week. We would hope at the end of the day for a bipartisan response; a cool and sensible response. It’s not going to be in the best interests of anyone to begin a trade war.”