Australia is set to feel the economic impact of the U.S. government’s 25 per cent tariffs on steel and aluminium imports, which took effect in mid-March.
While the GDP impact is under 0.02 per cent, economists have warned of the ripple effects on industries, employment, and consumer prices.
Australia exported 223,000 tonnes of steel and 83,000 tonnes of aluminium to the U.S. last year. Given the significant export volume, industry leaders warn of job losses and economic strain as demand declines.
University of Wollongong professor Xiao Fei Pan has warned the effects will extend beyond exporters.
“These tariffs will be felt across multiple sectors, potentially leading to job losses and inflation,” he said.
BlueScope, Australia’s largest steel producer, exports 300,000 tonnes of semi-processed steel to the U.S. annually (2025). The company now expects an AUD $80 million downturn in 2026. In response, the South Coast Labour Council is advocating for domestic policy adjustments to support local steel production and mitigate losses (2025).
Mining companies supplying raw materials for steel and aluminium production are also expected to face declining demand, further straining employment and investment in resource-dependent regions.
Australia’s economy is heavily reliant on international trade.
Professor Pan warns the tariffs could weaken exports and deter foreign investment.
“Higher capital costs in the local market could devalue the Australian dollar and limit foreign investment,” he said.
In 2023, Australia exported $360 million in iron and steel, $390 million in aluminium, and roughly $8.4 billion in other goods.
The impacts of U.S. tariffs extend beyond metals, threatening broader economic stability (DFAT, 2025).
More than 40 per cent of high-tech engines, 50 per cent of aircraft parts, and 60 per cent of machine tools are exported to the U.S., with the sector now facing growing uncertainty. Expanding tariffs or retaliatory measures could disrupt high-tech manufacturing and other key industries.
Professor Pan also warns of risks to services. Key exports–financial services, gold, meat, transportation has totalled $6.2 billion in annual trade with the U.S. (U.S. Embassy, 2025). If protectionist policies escalate, disrupted trade flows could weaken investor confidence and destabilise key industries, he added.
Australian businesses are shifting to Indo-Pacific markets (UNSW, 2025).
UOW Finance Professor, Millicent Chang, stresses trade diversification.
“We must remain competitive by expanding into new regions and adapting to supply chain uncertainties,” she said.
