Australia’s exports of aluminium and steel to the United States are just 0.2 per cent of our total exports to the world. But you would not have realised that if you listened to the meltdown in our media and in Canberra over the prospect of Donald Trump imposing tariffs on aluminium and steel.
Trump’s tariffs are not ideal for our industry, but we should put our response into context. A few years ago, China went much further than a tariff and simply banned our exports of coal, barley, wine and lobsters. Australia did not miss a beat. Our high-quality coal and barley found other markets and while it was harder for more consumer goods like wine and lobsters our overall economic health was not materially harmed.
Likewise, our economy will not crash because of these tariffs even if some businesses face challenges. Because of that we should try to get an exemption from them just as the former Turnbull Government achieved. However, the Prime Minister has made that effort harder by his unwise decision to appoint Kevin Rudd, who had made undiplomatic comments about Donald Trump before the PM appointed Rudd as our diplomat to America.
This is a test for the Prime Minister but instead of just relying on his negotiation skills we should take our destiny into our own hands to help our manufacturing sector.
What is strange about the Canberra crocodile tears for aluminium and steel is that for years the Canberra government has imposed taxes and red tape on these sectors that cost far more than Trump’s tariffs. Less than two years ago, the Labor Government imposed a new carbon tax on the very steel mills and aluminium smelters that are subject to Trump’s tariffs.
They do not call it a carbon tax. They instead have used the Orwellian term, a “safeguard mechanism”. Under the so-called safeguard mechanism Australia’s steel mills and aluminium smelters will have to reduce their carbon emissions to “net zero” by 2050. Reducing these emissions will cost a lot of money.
At the current price for a tonne of carbon, the cost to the aluminium industry would be $1.3 billion. The cost to the steel industry would be $8.5 billion.
How can the same people that impose a massive tax on Australian businesses, bemoan the imposition of taxes on the same businesses by other countries? On the one hand, climate activists want to see the back of our high-emitting steel and aluminium industries but then they lose their mind when another country imposes a tariff that will hurt these industries but not see them fail.
Perhaps we should look first at the internal “tariffs” that we impose on Australian businesses before we worry so much about what other countries are doing. And, there are lots more of these self-imposed anchors that we place on ourselves.
We remain slaves to a defunct Paris climate agreement which distracts businesses and public services everywhere with futile “net zero” plans. Let’s get out of Paris and unleash Australia’s productivity and opportunity.
We make anyone who wants to invest in Australia jump over 1000s of hurdles and take years (sometimes decades) to get back to them with basic approvals. Let’s slash red tape and instead roll out the red carpet for people that want to invest in Australia.
We obsess over installing more and more solar and wind power (almost all made in China) while refusing to use the coal and uranium that we export to others. How about a new rule. If it is good enough for us to export to other countries, it is good enough for us to use too!
Whatever Trump does Australia remains the lucky country. We have more natural resources per person than anywhere in the world. We just have to make our own luck again!
