Australia is weighing fresh trade defences just as its fragile economic reset with China appears to be stabilising. The federal government has asked the Productivity Commission to review claims that cheap foreign steel is undercutting domestic producers, prompting a parallel wave of complaints to the Anti-Dumping Commission about the way Chinese steel and aluminium products are priced and supported. This follows years of strain marked by punitive measures on Australian exports, followed by a cautious thaw in relations and a gradual unwinding of earlier bans.
At the heart of the tension is a simple equation. Fabricated steel imports driven largely by Chinese supply have reportedly climbed to around 700,000 tonnes a year and Australian industry bodies argue local fabricators cannot compete at those levels. The current proposal seeks a quota of roughly 400,000 to 450,000 tonnes on fabricated steel, with a steep 50% tariff applying once imports move beyond that range. Beijing has pushed back through formal submissions to Australian authorities, rejecting claims of unfair subsidies or dumping practices and stressing that Australian iron ore is a core ingredient in Chinese steel production given how tightly linked the two countries’ supply chains have become.
In the background sits the iron ore trade itself, which could become a pressure point if the dispute escalates. China has already shown it can influence pricing by consolidating buying power, with a centralised Chinese purchasing group associated with a year-long standoff that weighed on realised prices for major Australian miners and encouraged more sales to be priced in Chinese currency. Any move that prompts China to further diversify suppliers or alter buying terms is likely to affect the earnings of large producers and in turn state and federal budgets that rely heavily on iron ore royalties. For now the inquiry process suggests that Australia is trying to balance protection of domestic industry with the need to keep its biggest customer onside but the outcome remains highly uncertain.
