Australia’s steel and aluminium industries are navigating a complex landscape following the implementation of US President Donald Trump’s tariffs on steel and aluminium imports.
While the tariffs present a risk, experts say decisive action and strategic policies could allow these industries to not only survive but thrive.
The Australian Workers’ Union (AWU) has urged the government to mandate the use of Australian steel and aluminium in all Australian infrastructure and government buildings.
AWU National Secretary Paul Farrow emphasised the importance of recognising Australia’s strength in these industries, stating: “Australia is very good at making steel and aluminium.
“Trump knows it, and it’s about time we recognise it too.”
The AWU has been a long-time advocate for measures that support Australia’s steel and aluminium sectors.
Farrow believes that the tariffs should serve as a wake-up call for Australia to act decisively.
He stressed the need to combat the dumping of below-cost steel and aluminium by countries like China, advocating for stricter procurement and anti-dumping measures.
“Australia absolutely can and should be a green heavy manufacturing powerhouse of the 21st century,” Farrow stated, highlighting that strategic policies are crucial to overcome current hurdles and maintain the industries’ momentum.
Meanwhile, Dr Scott French, a Senior Lecturer in the School of Economics at UNSW Business School, has warned against implementing reactionary protectionist policies in response to the US tariffs.
He suggests that while the tariffs will negatively impact the Australian economy, long-term protectionist measures could be detrimental.
Dr French acknowledges the potential risk of foreign products flooding the Australian market, but he cautions against erecting trade barriers.
“Maintaining competitiveness is important because the one thing I’ve seen coming out of the industry is they’re worried about foreign products flooding the Australian market and displacing the domestic manufacturing here,” he said.
Instead of protectionist measures, Dr French recommends temporary, targeted support measures similar to the JobKeeper program during the COVID-19 pandemic.
These measures would provide a cushion for the immediate impact of the tariffs while preserving jobs and ensuring the continued operation of key plants.
“You want to cushion the transition, but any measures need to be temporary and targeted,” Dr French stated.
He also emphasised the importance of avoiding measures that create long-term reliance on government intervention.
Dr French also highlighted the potential for increased trade with Indo-Pacific partners due to trade diversion effects.
As countries retaliate against US tariffs, opportunities may arise for Australian manufacturers to fill the gaps in the market.
“Australia already has trade agreements with most of its Indo-Pacific trading partners.
“And so one thing you see is that when you get a tariff in one place, you have what you call trade diversion.
“So I would expect trade to pick up between Australia and these other countries automatically,” he said.
The coming months will be critical for Australia’s steel and aluminium industries as they adapt to the changing global trade landscape.
Strategic policy decisions and adaptability will be essential to navigate the challenges and capitalise on emerging opportunities.
