Business

BlueScope backs Labor's plan to protect local steel

Australian steelmaker BlueScope has backed federal Labor's push to toughen trade rules and triple penalties for dumping cheap overseas steel into the country, as concerns mount over the ramifications of Donald Trump's US steel tariffs.

Opposition leader Bill Shorten on Friday said Labor would hand the Anti-Dumping Commission an additional $3.5 million a year to fund more investigations and increase penalties for companies dumping low-cost steel into Australia.

The Turnbull government sought exemptions for Australia's BlueScope during a visit to Washington DC. Photo: Alex Ellinghausen

The policy comes in response to US President Trump's stiff new import tariffs of 25 per cent for steel and 10 per cent for aluminium, which has fanned fears of a flood of  cheap Chinese steel into the local market.

BlueScope chief executive Mark Vassella said the "dislocation" of steel out of the North American market was a major cause of concern.

"It is therefore critical that Australia's anti-dumping regime has to be even sharper than it already is," he said.

"The opposition's position on anti-dumping ... we believe strengthens the regime appropriately and is a very good policy decision for those guys to take."

Mr Vassella's comments put BlueScope at odds with the Turnbull government, which said it believed the changes are not needed.

In recent weeks, the Australian-based steel group BlueScope has been beset by uncertainty about whether it would be exempt from Mr Trump's tough new steel import tariffs.

BlueScope is hoping for exemptions from any US import tariffs. Photo: Louie Douvis

Any import tariffs would jeopardise BlueScope's 300,000 tonnes of hot roiled coil it exports to the US every year, and affect its operations in the US, where it converts the imports into higher-value product.

But the US president this week gave his strongest indication yet than an exemption for Australia would be forthcoming.

"We have a very close relationship with Australia," he said. "We have a trade surplus with Australia. Great country, long-term partner. We'll be doing something with them."

BlueScope and Turnbull government leaders have been pressing the White House for an exemption for the company, making the case that BlueScope was not just a "straight exporter", but also a significant contributor to the US economy with $3 billion in US assets and nearly 3000 workers there.

"I acknowledge the announcements that have been made by the president," Mr Vassella said. "I particularly acknowledge his recognition of the special relationship Australia has ... but also a recognition of our uniqueness as a company, exporting steel to the US to our own businesses for further value-adding to the US economy."

Mr Trump on Thursday granted exemptions for Canada and Mexico, and said there would be a 15-day negotiation window for countries including Australia to negotiate an exemption.

BlueScope remains hopeful of its prospects. "We will obviously follow that very closely and update the market as a final position becomes clear," Mr Vassella said.

'Time is of the essence'

The US government's proposed steel crackdown would, however, overall be positive for BlueScope, due to its ownership of the North Star steel mill in Ohio, which makes 2.2 million tonnes of steel a year for the US market.

The union representing Australian steel workers, including staff at BlueScope's Port Kembla plant, has called on the federal government to take urgent action to safeguard the industry from the flood of cheap Chinese steel into the market as a result of the new US tariffs.

The Australian Workers Union national secretary Daniel Walton said "time is of the essence" for government leaders to protect Australian jobs.

"The US has finally had enough of Chinese steel and aluminium dumping and they've thrown up a wall," Mr Walton said.

"That means there will now be even more irrationally priced, state-subsidised, low-quality Chinese steel and aluminium looking for a home."

Mr Walton said the Turnbull government should consider seizing back powers held by the Productivity Commission to enact emergency tariffs; step up lobbying efforts in Washington to secure an exemption for Australian steel; and enact strong local procurement policies for local steel and aluminium in Australian infrastructure projects.

"This would go a long way to saving thousands upon thousands of jobs," Mr Walton said.