‘Turned Washington on its ear’: Why Trump tariffs could be good for Aussie company

An Australian business could be a major winner from Donald Trump’s steel tariff even if the country is not spared from the controversial levy.

BlueScope says it could be a major beneficiary of the 25 per cent tariff imposed by US President Donald Trump, even if China onsells its steel into Australia.

During a presentation to shareholders, BlueScope steel managing director and chief executive Mark Vassella said the price of steel had jumped 20 per cent since the tariff announcement.

“The new administration has certainly turned Washington on its ear,” he said.

“Since the Trump announcement, we’ve seen prices go up, futures strengthen.”

The steel price has soared 20 per cent since Mr Trump’s announcement of plans to initiate broad tariffs on all steel and aluminium coming into the US.

Mr Vassella said he was still confident the US was the best steel market in the world to invest in.

Steel manufacturing out of BlueScope Australia’s Wollongong manufacturing facility. Picture: NewsWire / Simon Bullard.

He also pointed to when Mr Trump introduced tariffs during his first presidency in 2018, when prices for steel were lifted by the tariff amount.

“If we get a pass like we did last time that’s great, my base case is prices will move up by 25 per cent,” Mr Vassella said.

BlueScope has capacity to produce about three million tonnes a year of steel in the US versus exports from its Australian operations to America of 200,000 to 300,000 tonnes a year, meaning overall it could win from the move.

When asked about the tariffs impact, Mr Vassella said: “There are lots of moving parts in this piece, but the short answer is a net-net positive for BlueScope.”

Mr Vassella, however, flagged the Australian government needed to still protect the local industry, as China would look for a new place to sell its steel to following the US tariffs.

“The potential risk for us is that we see material dislocated from other markets and it comes to Australia, and it’s something we’re talking to the federal government about and we have been for years,” he said.

BlueScope Steel workers Tegan Craddock, Kamini Wijekulasuriya and Alanah Hunter. Picture: Simon Bullard

In 2018, during Mr Trump’s first term, he announced a 25 per cent tariff on steel and a 15 per cent tariff on aluminium, although countries including Australia, Canada and Mexico were eventually excluded from the uplift in prices.

A tariff is a domestic tax levied on goods as they enter a country, with the aim of making local prices more competitive, but it has the trade-off of higher prices for consumers in the domestic market.

The tariffs plan is a central part of Mr Trump’s economic vision as he believes it will help protect local jobs and the broader US economy and lift tax revenues.

Anthony Albanese has spoken with Mr Trump about the steel tariff.

Mr Trump confirmed an exemption for Australia was under consideration after his conversation with the Prime Minister, whom he dubbed a “very fine man”.

“We have a surplus with Australia, one of the few, and the reason is they buy a lot of aeroplanes,” Mr Trump said.

BlueScope say the tariff could actually help the Australian business become more price competitive. Picture: Simon Bullard

Days later Mr Trump’s senior counsellor for trade Peter Navarro told reporters: “Australia is just killing our aluminium market” and “what they (Australia) do is they just flood our (Aluminium) markets”.

Mr Vassella said he was expecting an uplift from BlueScope’s US operations, where it owns the North Star Steel mill in Ohio, after a challenging period for the business.

For the six months ended December 31, BlueScope reported a sizeable profit decline, with its net profit after tax dropping by $260.2m to $179.1m.

This was driven by weakness in North America where its North Star business delivered a significantly softer result compared with the prior half.

However, BlueScope believes there will be a pick up in US demand for its product.

The company will pay an interim dividend of 30c per share, up on the 25c paid in the prior corresponding period, on March 25 and also announced a $240m buyback extension over the next 12 months.