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.
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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.