BlueScope Steel shares rise after US steel tariffs, but iron ore producers drag down broader market

ABC NEWS (Australia)

In finance, BlueScope Steel shares rose today following the Trump administration’s move to impose tariffs on US steel and aluminium imports. However, iron ore producers took a hit, pulling the broader market down. Here’s Alan Kohler.

Transcript

00:00Blue Scope Steel shares went up because half of its steel factories are in the United States,

00:07so it benefits from imports getting more expensive.

00:09However, investors in iron ore miners didn't know what to think.

00:13Their biggest customer, China, will probably suffer.

00:15But then again, demand for iron ore depends on demand for steel, and that won't change.

00:21It's just that more of it might be made in America, but whoever makes it will need iron

00:25ore.

00:26JB Hi-Fi and Car Sales announced their half-yearly results and were greeted with resounding raspberries.

00:32Back to tariffs, here's a graph of Australia's exports of aluminium to the United States

00:37and iron and steel.

00:38Now, a lot of that is iron, which Mr Trump didn't mention, so it might not be affected.

00:42Anyway, the total of the two is about a billion dollars, or a fifth of 1% of Australia's exports.

00:49So moving on.

00:51You might be wondering why Trump is doing all these tariffs, which are basically a GST

00:55on imports.

00:56Well, his tax cut promises have to be paid for somehow.

00:59He's in the hole for close to $7 trillion.

01:02And that's on top of a budget deficit that's already $1.8 trillion, or 7% of GDP.

01:08So that explains the import taxes to raise cash, and it also explains letting loose the

01:13world's richest man, Elon Musk, onto government spending.

01:18The US share market fell on Friday because of a better-than-expected jobs number, reducing

01:22the odds of another rate cut.

01:24Gold has given back some of last week's big gains, while copper, oil and iron all went

01:28up.

01:29And the Aussie dollar is up pretty strongly to 62.7 US cents and 60.8 euro cents.

01:36And that's finance.

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