US President Donald Trump’s proposed tariffs on steel and aluminium imports are a ‘black day’ for the world and could hurt the Australian economy, BHP Billiton chief executive Andrew Mackenzie says.
Mr Mackenzie said it is too early to tell how the tariffs, which are aimed at protecting US producers, will affect BHP, but he said he is concerned the restrictions could damage the current optimism toward free trade.
‘Outside of the US the sense that I have at the moment is that people are re-embracing free trade after a bit of a wobble – partly driven by the result of several elections,’ he told a business conference in Sydney.
‘I don’t see that changing anytime soon but I am worried about this sort of sentiment shift, that people all around the world might suddenly say free trade is not good for the world, and that would be particularly bad for a trading company like BHP and a trading nation like Australia.’
US tariffs of 25 per cent on imported steel and 10 per cent on aluminium are expected to be formalised this week or next week, and the White House has said that allies of the US, including Australia, will not be exempt.
Since President Trump announced the proposal late last week, stock markets around the world have fallen, along with iron ore prices, due to concerns the tariffs could hurt global demand for steel.
Despite the uncertainty created by the tariffs, the BHP boss still believes the global economy is in its best shape in eight years.
‘In spite of recent moves made by the United States to impose tariffs on steel and aluminium products – a black day for the world and business – elsewhere we do observe buoyant economic conditions underpinned by the growth of free trade outside the US,’ Mr Mackenzie said.
‘We see the world economy in probably the strongest shape it has been since 2010.’
Mr Mackenzie said free trade was the ‘lifeblood and promoter of health’ of the global economy, and he expects it to flourish despite the recent developments in the US.
‘We [BHP] will live and die by what happens with free trade,’ he said.
‘We will never hide or seek to hide behind trade barriers to shield ourselves from our lack of competitiveness.
‘We will always look forward to competing to win on level playing fields around the world because that will make us stronger.’