Treasury estimates released on March 18 indicate that the direct economic impact of U.S. tariffs on Australian steel and aluminium will be “manageable,” with a minimal hit to GDP.
Treasurer Jim Chalmers addressed the issue during a speech in Brisbane, where he provided an update on Treasury’s findings regarding the 25 percent tariff imposed by the Trump administration on steel and aluminium imports.
Despite the initial strong reaction from media outlets to the announcement that Australia would not be exempted from tariffs, the Australian treasurer revealed it would only impact 0.02 percent of the country’s GDP by 2030.
However, he said indirect effects, such as retaliatory measures and an escalation of global trade tensions, could magnify the impact.
Treasury conducted two assessments, one before the U.S. election and another after the inauguration.
“When you add in the indirect effects, the hit to GDP could be more like 0.1 percent by 2030,” Chalmers explained.
Despite the likely rise in economic strain, he remained optimistic, asserting that the government’s response would be proportionate and focused on resilience rather than retaliation.
“We’ll go for more resilience, not more retaliation,” he said.
The U.S. tariffs, which were confirmed on March 11, will apply to Australian steel and aluminium exports valued at about $1 billion annually.
According to data from the United Nations COMTRADE, Australian iron and steel exports to the U.S. are valued at approximately $378 million, while aluminium exports total about $503 million.
While the tariffs are significant for countries like Canada, Mexico, and China, for Australia their impact is limited, accounting for just 1 percent of U.S. steel imports and 2 percent of aluminium imports.
Further, Australia’s largest aluminium supplier BlueScope previously circumvented tariffs by shipping raw materials to a plant in the United States.
Australia remains a key player in global aluminium production, ranking as the world’s sixth-largest producer.
Opposition Criticises Labor on US Tariffs
Despite the Treasury’s optimistic outlook, the opposition, led by Peter Dutton, criticised the Albanese government’s handling of the situation.Dutton stated that there was a “bipartisan position in relation to tariffs” but accused the government of failing to take the necessary steps to secure an exemption for Australian exports.
Dutton specifically blamed Prime Minister Anthony Albanese of being “scared” to approach former U.S. President Donald Trump and failing to “pick up the phone.”
He claimed that the current government’s approach was lacking, suggesting that he and his trade spokesman Kevin Hogan could have achieved a better result by meeting Trump in person.
“There’s no doubt that a personal relationship with the President of the United States makes a difference,” Dutton said.
Deputy Opposition Leader Sussan Ley also placed the blame on Albanese, asserting that the prime minister had not done enough to build a personal relationship with Trump.
Ley pointed to the success of former Liberal Party Prime Minister Malcolm Turnbull in securing an exemption after eight months during the first Trump administration.
“We did have that personal relationship, we did have those face-to-face meetings, and we did secure the exemption that was in our country’s interests,” she said.
