Anthony Albanese's plan to subsidize the manufacturers of Australian steel and aluminum is running the risk of reducing the trade war with Donald Trump has warned an expert.
Last week, the Prime Minister announced a new program of $ 750 million that was designed to “stimulate the development of new technologies to ensure that our metal manufacturers remain competitive worldwide.”
“We want to see that more Australian employees make more things here,” said Mr Albanese.
“That is why we assign financing to support our local metal manufacturers to seize the opportunities of the future.”
The announcement was made on Friday, two days after 25 percent rates were made on Australian steel and aluminum exported to the United States.
This was also after the American trade secretary Howard Lutnick Australia accused of dumping aluminum at the costs below on the American market.
Dr. Naoise McDonagh, a senior geopolitics and international trade teacher at the Edith Cowan University of Perth, said Trump could claim that the new Australia subsidies on steel and aluminum was an attempt to underbid the prices of American manufacturers.
“Trump can certainly arm the announcement and superficially could keep it a potential merit,” he told Daily Mail Australia.
Anthony Albanese's new plan to subsidize the manufacturers of Australian steel and aluminum risks the trade war with Donald Trump (the prime minister is depicted in the Bluescope Steelworks in Port Kembla)
“Although Trump does not really need evidence to apply rates, many of his just claims are false, misleading or a combination of both.”
Dr. McDonagh said that the Australian government would probably hide the price subsidies as environmental programs, with the announcement including Green Aluminum Production Credits.
The restless Whyalla Steelworks of South Australia, now in administration, will also be supported by the financing of the taxpayer.
This could possibly cause complaints at the World Trade Organization.
“More generally, green subsidies, whether it is real or double for industrial profit, will always be controversial in the Febriele Goe -economic environment of today,” Dr. McDonagh.
The trade expert said that Australian governments would rather subsidize the production of metal, because China tried to make other countries dependent on his products.
“The pressure on the Australian government to assume an aggressive industrial policy for industries of strategic importance will only grow,” he said.
NSW treasurer Daniel Mookhey said that the state government would now be more inclined to buy Australian steel and aluminum for projects such as train production instead of importing cheaper product from China, as the previous coalition government did.
The announcement was made on Friday, two days after 25 percent rates were made on Australian Steel and Aluminum exported to the United States (depicted President Donald Trump)
Treasurer Daniel Mookhey, treasurer from New South Wales, said that the state government would now be more inclined to buy Australian steel and aluminum for projects such as the production of trains instead of importing China, such as the previous coalition government to save money in advance
“You can buy Australia if you are a patriot, you can also buy Australia if you want a world -class steel,” he told the ABC's Q+A program on Monday.
'And we are talking about the quality of our steel industry, but Bluescope steel in the Illawarra does great work to produce steel for renewable energy, but also for trains.
“We take on a policy that says:” We want to buy steel from Australia, we want to buy aluminum with Australia “.
'We also want to use our purchasing power to place Australia in global supply chains, yes using train production.
“That is a good response to the policy that the Trump government has set up.”
Mr. Mookhey said that Australian steel and aluminum was of better quality and claimed that it would be cheaper to find spare parts locally if something broke.
“What we learn as a state government is that when it comes to things like trains, once you have local production once in the vicinity of everything you pay, it is really useful if you break, for example, and you have to repair them,” he said.
“The fact that you can bring in the same type of steel, instead of sending it from the other side of the world, is actually a real cost saving.”
Although the World Trade Organization frowns on subsidies, it regards them acceptable if they are focused on research and development instead of just reducing prices, and provided that they are available for both local and foreign companies.
“R&D subsidies are used universally by all governments and the world markets may not be able to deform, therefore the WTO rules cannot violate,” said Dr. McDonagh.
The last $ 750 million in government financing for metal manufacturers comes from the $ 1.7 billion future in the Australia Innovation Fund, announced last year in the budget of 2024-25.
