Company CEOs reel after Trump’s tariffs remake the international economic order

Business leaders have agonised over a global economic hit from US President Donald Trump’s sweeping intervention on tariffs, which will ripple through world trade and inflate costs.

Donald Trump after signing an executive order at an event to announce new tariffs in the Rose Garden of the White House. Picture: AP

Business leaders lamented a global economic hit from US President Donald Trump’s sweeping intervention on tariffs, which Andrew Forrest’s Fortescue predicted would trigger a reassessment of global and regional supply chains.

Woodside Energy chief executive Meg O’Neill said Washington’s 10 per cent global tariff gambit would “ripple” through world trade and inflate costs.

While the energy giant expects little immediate disruption to its Australian and US oil and gas businesses, the broader economy is likely to suffer as dozens of nations weigh the prospect of retaliatory tariffs.

“Obviously any tariff will ripple through the global economy and that is going to have the impact of raising costs and slowing things down,” Ms O’Neill said on Thursday.

Woodside Energy CEO Meg O'Neill.

Australia’s third-largest iron ore producer, Fortescue, said it was using the tariff shock to reassess and potentially double down on strategic trade partnerships, including China.

“While the current tariff situation is creating some uncertainty, it also offers a chance to consider how we can rethink and strengthen global and regional key partnerships,” Fortescue metals boss Dino Otranto said. “We should be seizing this opportunity to re­assess the resilience of our supply chains and explore ways to make them more adaptable to future challenges.”

China has already threatened retaliation against the US after Washington hiked tariffs on China above 60 per cent. Fortescue said the economy would remain pivotal as Australia’s major commodity buyer and the biggest customer for iron ore.

“China is maintaining its long-term approach, focusing on domestic demand to meet growth targets,” Mr Otranto said. “That quiet determination to stay on course and strengthen international ties is a reminder of the importance of being committed to long-term goals, even when faced with short-term uncertainties.”  

Global miner Rio Tinto pointed to a potential tailwind for its Resolution copper project in Arizona from Mr Trump’s move.

“We’ve got Resolution copper and some other projects in the US. We’re looking to take those forward. And clearly, changes in any circumstance might enable that faster than otherwise,” Rio Tinto iron ore boss Simon Trott said.

Australia’s biggest steelmaker, BlueScope, said it was continuing to fight for an exemption from tariffs on steel imports while confirming Thursday’s trade hit would not be added to its existing 25 per cent impost.

Mr Trump imposed 25 per cent tariffs on all steel and aluminium imported into the US, with BlueScope seeking diplomatic talks with Washington over the trade stoush.

“We continue to work with officials in Washington DC and Canberra to seek an exemption from the steel tariff, noting BlueScope’s significant $6bn investment in the US, 4000 American employees, and the key role of exports from Port Kembla in supplying our value-adding oper­ations and customers in the US,” BlueScope said in a statement on Thursday.

A universal 10 per cent tariff announced on Thursday would not apply over and above the existing 25 per cent sector-specific levy, BlueScope added.

It previously said it expected to see “the positive impact” from an improvement in steel prices as a result of the tariff move.

Meanwhile, burns treatment biotech PolyNovo said it was dismayed by the actions of the US administration.

“While it looks like Trump has not imposed the 10 per cent on pharmaceuticals it is widely expected to be coming. PolyNovo is a device and looks to be hit,” PolyNovo chairman David Williams said. “This is a massively disappointing outcome for US surgeons and burn and trauma patients. If implemented, it will have impacts across the Australian medical device industry but particularly with our US surgeons and their patients.”

Mr Williams said it marked the start of a negotiation process.

“On behalf of US trauma and burns patients, we will publicly and privately make very strong representations and advocacy on this issue, working alongside government, our customers and industry to argue for a removal or reduction in the tariff as it applies to PolyNovo wound care ­products.”

The tariff bombshell would remake the international economic order and spark retaliation from trading nations, industry body Ai Group said.

The move “sends an ominous signal about what comes next,” Ai Group chief executive Innes Willox said. “This will undoubtedly spark retaliation, imposing barriers on well-known trading relationships and driving up costs for businesses and consumers.”

Australian goods destined for the US “may likely need to find a new home, raising the prospect of an influx of displaced goods coming to Australia,” Mr Willox said.

“More than ever, we need a transparent and robust anti-dumping system to work in the legitimate interests of Australian industry. This also reinforces the need to get our policy house in order on issues like tax, deregulation and energy. We cannot hope to thrive in a trade war with policy settings that are internationally uncompetitive, overly-complicated and not fit for purpose,” Mr Willox added.

Additional reporting: Colin Packham, Jared Lynch