Navarro’s Claims on Australian Aluminium Face Scrutiny

Peter Navarro, former trade adviser to Donald Trump, has accused Australia of undermining the U.S. aluminium market through subsidies and unfair competition. His claims, published in USA Today, have sparked debate, particularly regarding their accuracy and implications for Australia’s trade relationship with the U.S.

Navarro alleged that Australia and Canada were launching “frontal assaults” on the U.S. aluminium industry, suggesting that Australian smelters operate with an unfair advantage due to heavy subsidies. However, available data challenges this assertion. Australia’s aluminium exports to the U.S. accounted for less than 3% of total U.S. aluminium imports in January, a figure consistent with historical averages. By contrast, Canada remains the dominant supplier, contributing more than half of U.S. aluminium imports.

While subsidies for aluminium smelters exist in Australia, they have largely been used as emergency measures rather than a systematic strategy to undercut international markets. One example is the 2021 financial support package for Alcoa’s Portland smelter, aimed at maintaining energy supply during peak demand. More recently, the Australian government launched a $2 billion initiative to assist smelters in transitioning to renewable energy, a policy similar to those seen across Europe. However, these incentives will not take effect until 2028-29, making it unlikely they have already influenced production costs in the way Navarro suggests.

Further, Navarro’s claim that Australia’s close trade ties with China distort global aluminium markets lacks clear evidence. While Australia is a major exporter of raw materials, including alumina used in aluminium production, its primary destination for alumina is not China. There is no indication that these trade links have led to market manipulation or unfair pricing.

Regarding allegations of breaching agreements, Australia did initially agree to voluntary export restraints in 2019 following a tariff exemption secured under Prime Minister Malcolm Turnbull. Exports subsequently fell but rose again in response to shifting geopolitical conditions. After Russia’s invasion of Ukraine, the Biden administration imposed a 35% tariff on Russian aluminium, prompting the U.S. to seek alternative suppliers. Australia responded by increasing its exports, briefly becoming the fourth-largest supplier to the U.S. in 2022 and 2023. However, by 2024, exports had declined below 2020 levels, placing Australia eighth among U.S. aluminium suppliers.

Despite Navarro’s sharp criticism, there is little evidence to suggest that Australia’s aluminium industry poses a threat to U.S. producers or that it has engaged in unfair trade practices. The fluctuations in Australian aluminium exports appear to have been driven more by shifts in U.S. trade policy than by any deliberate attempt to undercut American industry.