Australia eyes stronger aluminum, steel antidumping rules against US tariffs

Australia is looking to strengthen its antidumping regime to protect its steel, aluminum and manufacturing sectors from the impacts of new US tariffs.

Prime Minister Anthony Albanese said Australia will bolster its antidumping programs to protect key sectors against unfair competition, in response to risks associated with US President Donald Trump's new round of import tariffs.

While steel, aluminum and copper will not see any increase in tariff rates, other Australian products will be subject to the 10% baseline tariff rate, prompting Albanese to criticize the US administration's new trade measures.

The US has already placed 25% tariffs on all steel and aluminum imports coming into the country.

"When you look at aluminum and steel as an example where tariffs have been put on, there aren't more American aluminum producers or steel producers manufacturing today than they were in February before the tariffs changed. None. All that's happening is that everyone is paying more, for who's purchasing the products in the US," Albanese told media in Melbourne on April 2.

"So, if you have an across-the-board increase in tariffs, it doesn't change the comparative advantage of any particular country," Albanese said.

Besides the headline tariff dispute, the US has been pushing for antidumping measures to protect its domestic players. The US on April 4 proposed antidumping rates of as much as 137.76% for corrosion-resistant steel products coming in from 10 countries, with Australian imports targeted at 17.01%.

Australian government backs with aid

The Australian government will provide A$50 million ($30 million) to affected sectors, encourage businesses to buy locally manufactured goods and establish a new economic resilience program through its national reconstruction fund, which will provide A$1 billion in zero-interest loans for firms to "capitalize on new export opportunities."

Minister for Industry and Science Ed Husic issued a statement of expectation for the antidumping commission, or ADC, on April 1, the day before Trump imposed the new import tariffs.

"International overcapacity in key sectors, combined with the increasing use of quotas and tariffs by other countries are altering international trade flows. There is a significant risk for trade diversion and dumping into the Australian market undermining otherwise competitive Australian industry," Husic said in a statement to David Latina, head of the ADC.

"I expect you to use all the powers available to you to ensure that Australian manufacturers are not injured by unfair trade through dumping and subsidization," Husic said.

Bracing for dumping due to trade diversion

The Australian government and industry are concerned about the impacts of US trade policy on global trade, including dumping, in which imported products are priced lower than the domestic price.

"The concern is that US tariffs will lead to a change in trade flows that may result in aluminum (extrusion and fabricated windows) from [Southeast] Asia being redirected to other markets, including Australia," Tony Dragicevich, CEO of Australia's largest extruder and distributor of aluminum products Capral Ltd., told Platts in a recent interview. Platts is part of S&P Global Commodity Insights.

"As soon as you get a change in global trade patterns, there's the potential for diversion [which] may mean the risk of dumping. It doesn't necessarily follow, but clearly, trade diversion does increase the risk of dumping [from tariffs]," Marghanita Johnson, CEO of the Australian Aluminium Council, told Platts.

Johnson welcomed Husic's new direction to the ADC, saying it indicated "renewed urgency."

Husic's statement marks the first time an Australian government has "so clearly articulated its expectations of the commission, recognizing the increased risks faced by Australian manufacturing at this time," Johnson said.

"We need to make sure that the [ADC] and the role it plays continues to be fit for purpose with what we need in terms of responding to a changing geopolitical environment," Johnson said.

Husic is also seeking the ADC's advice on establishing a more dynamic public reporting regime. The minister also emphasized the need for "timely and accessible remedies to unfair trade," noting that current cases take too long, which is exacerbating harm to local industries.

Australia's aluminum industry has a number of cases before the commission, mainly relating to imports of aluminum extrusion, many of which have been going on for many years and are continuations of existing cases that have rolled over, Johnson said.

"[It is] important that Australia maintains a robust antidumping regime to ensure that local manufacturers have a level playing field and are not subject to dumped aluminum products hitting the Australian market," Johnson said.