Add Category
Posted
Analysts say the uncertainty following news of United States-China tariffs could cause issues for miners in Australia's biggest export state.
Bell Potter Securities' Giuliano Sala Tenna said the tariffs may mean future decisions on large mining projects are paused because of the level of uncertainty in the global economic environment.
"We do know that investors do like to see a more stable international environment of policy which is more predictable so that they have a better set of parameters to make that decision on."
WA business analyst Tim Treadgold said the new tariffs would have a knock-on effect on the state's mining exports.
"It's a sort of knee bones connected to the thigh bones job," he said.
"If the United States says to China, you can't send us any more steel, that says to China we don't need to buy any more iron ore from Australia."
But he said it was still too early to know how much of that impact will be felt by WA's big miners.
"If the two biggest economies in the world declare a trade war, demand for commodities of the sort we export will decline," he said.
The tariffs may mean future decisions on large mining projects are paused because of the level of uncertainty in the global economic environment, according to Mr Sala Tenna said.
"We do know that investors do like to see a more stable international environment of policy which is more predictable so that they have a better set of parameters to make that decision on."
The WA Pastoralists and Graziers Association has downplayed the potential benefit to meat exporters, after news China would impose additional tariffs on US agricultural products.
PGA president Tony Seabrook said while in the short term it may benefit alternative suppliers like Australia, he expected trade tensions between the US and China to resolve too quickly for the local beef industry to see a longer-term benefit.
Mr Seabrook said producers would be reluctant to commit a lot of capital to developing trade with China because the tariffs may be "only be a short term blip".
"There's an enormous lobby in America on behalf of agriculture," he said.
"Trump has done a few things in the past that have denied American farmers access to Asia, and the pressure will build very quickly."
WA Agriculture Minister Alannah MacTiernan said there would be challenges navigating potential opportunities in beef markets in China until there was a better sense of how long the new rules would last.
"If this is just going to be short term, you … can't lose your other markets which you have built up and which are stable," Ms MacTiernan said.
But she said China's tariffs on American pork were bad news for local producers.
"We might find ourselves in a [worse] position because we can't export into China, and yet there'll be a lot of American product looking for other markets and that means that drives prices down," she said.
A global oversupply of pork means demand has been low, and the overflow of US pork could hit already struggling local producers.
Topics: trade, business-economics-and-finance, mining-rural, mining-industry, industry, wa, australia