Aussie companies reach for ‘trade war helmets’ after Trump’s ‘shock’ tariffs

Australia’s biggest companies are bracing themselves for Donald Trump’s “shock” new tariffs, warning they could delay the global economic turnaround.

Donald Trump says the new taxes would hit ‘everybody’, suggesting Australia will not be exempt from the fresh trade war slug.

Australia’s biggest companies are bracing themselves for the fallout from Donald Trump’s “shock” new tariffs, warning it could make American-made goods more expensive and delay the global economic turnaround.

All steel and aluminium imports to the US will be hit with 25 per cent tariffs as part of Mr Trump’s new trade war which has formed a cornerstone of his “Make America Great Again” pledge.

But, ASX-listed non-mining companies from Ansell to Car Group are also preparing for an economic hit, as inflationary impacts ripple through global supply chains.

Ansell said it would pass on any extra costs to customers, making its surgical gloves and protective clothing more expensive.

The new US tariff regime would force the manufacturer to shift some of its manufacturing out of China to other parts of Asia.

“The most important thing for any company to do at the moment is to have options, because it is unclear where tariffs are going to land,” chief executive Neil Salmon said.

Economist Stephen Innes said Asian markets were scrambling for their “trade war helmets” on Monday morning.

“Trump’s latest move isn’t merely another trade skirmish. It’s an escalation of his ‘America First’ trade doctrine where ‘no country is off limits’,” Mr Innes said.

Moody’s analysts said: “Around the Asia-Pacific region, countries are preparing for Trump’s gaze to land on their trade balances with the US.

“Some, including Japan, South Korea and Taiwan, are hoping that security relationships and investments in US ventures will provide cover.”

Anthony Albanese has vowed to fight for an exemption from the tariffs, which Australia was able to do under the previous Coalition government when Mr Trump was first in office, as economists and analysts warn the import taxes will fuel inflation.

Nationals leader David Littleproud said Australia should “leverage” Australia’s longstanding alliance with the US, including the AUKUS partnership, which has been backed by the Trump ­administration.

The US imported about $638m worth of steel and $499m of aluminium last year.

Even non-resource companies are concerned the tariffs will derail the global economic recovery and fuel further inflation as the costs ripple through supply chains.

Cameron McIntyre, Car Group CEO, is concerned the tariffs will fuel inflation — even on US-made goods. Picture: Stuart McEvoy

Car Group, owner of Australia’s biggest auto classifieds site Carsales, warned of inflation spiking, potentially halting the recovery in a “challenging” US market for RVs and power vehicles, which include motorcycles, jet skis and snowmobiles.

Car Group generates more than a quarter of its revenue — which totalled $548m in the six months to December 31 — from North America.

Chief executive Cameron McIntyre said the RV and powersport vehicles market was beginning to turn around. But, he was concerned tariffs could increase the prices of materials used to make those vehicles — even if they are made in America —, weakening consumer demand.

“That’s been where the challenge has been for us. I don’t want to comment on tariffs in general, but I guess in the case of our business, you’ve got RVs there,” Mr McIntyre said.

“The statistics I’ve seen are that around 80 per cent of RVs sold in the United States are assembled in the United States, and with powersports equipment, it’s somewhere between 30 and 50 per cent.

“Anything that makes any of that kit — whether it’s RVs or powersports — more expensive, is certainly challenging for the consumer. We would prefer prices of that sort of kit not to be going up and we’d like to see more RVs and more powersports equipment sold.”

Car Group’s website traffic for RV listings eased 1 per cent in the six months to December 31, versus an 8 per cent fall in the same time in 2023. Powersports dipped 2 per cent versus an 11 per cent plunge the previous year.

Ansell CEO Neil Salmon said the company will pass on the cost of the tariffs to customers

The US is Australia’s third-largest export market for aluminium after South Korea and Japan.

Mr Trump said the taxes would hit “everybody”, suggesting Australia will not be exempt from the fresh trade war slug.

“Steel. Any steel coming into the United States is going to have a 25 per cent tariff,” he said, adding aluminium will also be taxed. Australian Aluminium Coun­cil chief executive Marghanita Johnson said the industry would work with the federal government in an effort to minimise any impact on exports and the local workforce.

But, ASX-listed BlueScope Steel is shaping up as one of the winners if Mr Trump delivers on his threats. It is now the fifth-largest steel producer in the US, employing 4000 American workers.

“We are aware of media reports this morning that President Trump has said he will announce tariffs on steel and aluminium imported to the US,” a BlueScope spokesman said.

“BlueScope has been investing in the US for 30 years. Most recently, we have spent $2bn on acquisitions and brownfields expansion of our operations there.”

North Star BlueScope Steel (North Star) is a steelmaking mini-mill located in Delta, Ohio. It is the fifth biggest steel producer in the US.

Fisher & Paykel Healthcare was the first ASX-listed company to warn of a hit to earnings from Mr Trump’s trade war on Mexican and Canadian imports. The medical device manufacturer said last week tariffs would increase the company’s costs and delay plans to achieve a 65 per cent gross margin by up to three years.

Fisher & Paykel currently manufactures about 45 per cent of its products in Mexico, with facilities in the country accounting for 60 per cent of goods supplied to the US. The world’s largest economy accounts for 43 per cent of the group’s revenue. The rest comes from New Zealand.

But, eToro market analyst Josh Gilbert told NewsWire on Monday while the tariffs had come as “a bit of a shock”, President Trump might reverse them, particularly if there was a sustained negative reaction from stockmarkets.

Mr Trump threatened tariffs in 2017, but former Prime Minister Malcolm Turnbull and former US ambassador to the US Joe Hockey secured an exemption in 2018 after months of advocacy, with President Trump focusing his trade antagonism on China.

Mr Hockey told The Australian late last year there remained a “lot of goodwill towards Australia”, which “extends right down the pipeline”, despite Australia’s current US Ambassador Kevin Rudd branding Mr Trump the “most destructive president in history” in now-deleted posts on X.

“We are people that carry our weight and are prepared to contribute more where appropriate. Everyone walks into the White House and asks for something. Australia is one of the few countries that walks into the White House and says, ‘How can we help?’,” Mr Hockey said.

“There’s a lot of goodwill towards Australia and Australian innovation. And even though everyone’s expecting a fairly significant turnover in leadership of various agencies, that goodwill extends right down the pipeline.”

Originally published as Aussie companies reach for ‘trade war helmets’ after Trump’s ‘shock’ tariffs