![]() ![]() That said, when iron prices were lower Australia was selling many other goods into China that have ground to a halt under the current trade war. It should be noted that at $228 iron ore prices are still well above long term averages of closer to $68. That’s more, in total, than the value of Australia’s iron ore trade to China. The annualised rate of restricted exports to China has fallen from $25 billion in 2019 to $5.5 billion since the trade war began, Mr Eslake said. “I’m not sure we would plunge to deficits necessarily, but our surpluses will be smaller.” Still well above average “How far iron prices fall depends on how much China is prepared to wind back its steel production,” Mr Eslake said. ![]() Mr Eslake said the falling iron ore prices will probably continue for at least six months and expose Australia to the costs of the trade war. The impact will be felt most in the value of the Australian dollar and tax revenues reaped by governments, economist Saul Eslake told TND. ![]() That cost could blowout to $23 billion if the restrictions grind exports to zero over a 12 month period. The move is part of a bigger effort from China to end its reliance on our iron ore and punish Australia for failing to toe the Beijing line on human rights, the origins of COVID-19 and telecommunications giant Huawei.Ĭhina’s restrictions on other exports – including coal, copper, beef, wine, cotton, barley, wood and lobsters – cost Australia $6.6 billion from June 2020 to February 2021, according to University of Adelaide data. ![]()
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