Australian iron ore producers BHP Billiton and Rio Tinto are at risk of becoming collateral damage in US President Donald Trump’s move to stamp out the “dumping” of cheap steel by foreign producers such as China.
President Trump ordered the Commerce Secretary to prioritise an investigation into whether steel imports into the US “threaten to impair national security”, by drawing on an obscure provision in a 1962 trade law.
The move opens up a path for the Trump administration to potentially impose tariffs on subsidised steel from a broad range of countries that Australia exports the steel-making ingredient iron ore to.
American Enterprise Institute US-China economic relations expert Derek Scissors, who last month visited government officials in Canberra, said the Trump administration was yet to consider the detrimental economic impact on allies such as Australia from any trade punishment against China.
“If the US severely punished the Chinese steel industry, which is absolutely warranted on economic grounds for China dumping overcapacity on the world market for 15 years, how are they going to affect the demand for Australian iron ore?” On the other hand, the measures could help Bluescope which has large steel plants in the US.
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