Global trade has entered uncharted waters. With US President Donald Trump’s tariff threats swinging sharply and supply chains rerouting in real time, commodity markets are grappling with a level of disruption that few had anticipated — and Australian miners are feeling the strain.
In a matter of months, the Trump administration has unleashed a flurry of unpredictable tariff hikes, counter-tariffs and exemptions that have reshaped trade flows. Trump at first effectively embargoed Chinese imports with a 145% tariff, a May truce saw that level drop to 30%... for now. Meanwhile, a blanket 10% levy applies to many global goods, and steel and aluminium tariffs just doubled to 50% — with legal challenges to these policies ping-ponging their way to the US Supreme Court.
Beijing fired back with its own tariffs. It also applied restrictions on critical mineral exports, further tightening already-constrained markets for metals like lithium, rare earths and copper.
The rapid-fire nature of these moves has left investors, companies and governments scrambling to interpret shifting rules almost as quickly as they are written.
Adjusting to US protectionism
For Australia’s mining sector — heavily tied to Chinese demand but increasingly eyed as a potential alternative supplier to the US and its allies — the stakes are growing by the day.
Scott French, an expert in international trade at UNSW, noted that Trump’s longstanding affinity for tariffs means that, despite the oscillations in how his administration tackles trade policy, some heightened tariff regime is likely to remain when the dust settles.
"What’s clear is that Trump and his closest advisors like tariffs,” French said. “They think they're good for the US economy and for whatever outcomes they're looking for. So, I think some form of increased trade protection is probably here to stay."
While the exact form and scope of those tariffs remain highly uncertain, French warns that the erratic nature of Trump-era trade policy creates a volatile backdrop for global markets.
"Ultimately, you have to be in Donald Trump's head to know where this is headed,” he said. “And I'm not even sure Donald Trump knows where it's heading; I think it depends on who he's talked to most recently."
Ripple effects on Australian mining
The sheer unpredictability of US trade policy under Trump has made it difficult for companies, and investors, to make long-term decisions.
"I don't think you're going to see big US companies investing in manufacturing in China anytime soon, or for that matter, anyone investing in US manufacturing, because they don't know how much their imported inputs are going to cost in a few months' time,” French said.
That uncertainty could ripple out to countries like Australia — particularly through China, its largest trading partner.
“The question for the mining sector is, what does that mean for China's economy?” French said. “From what I've seen, the Chinese demand for iron ore has kind of kept pace, which gives an optimistic outlook for demand for Australian iron ore."
Still, Chinese growth is under pressure, and French noted that “if what we're seeing is the Chinese economy just slowing down as a result of this global shock from US trade policy, that's bad for everyone.”
Lower demand from China could push down iron ore prices and weaken the Australian dollar — dynamics that may soften the blow for local producers, but not eliminate it.
Opportunities through trade diversion
There may also be upside opportunities. As global trade realigns and US-China ties fray, countries like Australia could benefit from trade diversion.
“If the US is going to focus on tariffs on China, that's going to reduce trade between them,” French said. “The US is going to import less from China, and they're going to import more from other places. That’s going to push trade away to other countries.”
In that scenario, Australian producers of aluminium and other commodities could fill gaps left by redirected supply chains, particularly in US markets, French said.
Robert Talevski, CEO of Webull Securities Australia, agreed that supply chain vulnerabilities have come into sharper focus — and that investors are already positioning for those shifts.
“This whole trade war has really highlighted just how vulnerable global supply chains are, particularly when you're looking at rare minerals,” Talevski said. “With China producing roughly 70% of global supply, when they clash with the US, that opens the door for Australian miners to step in and fill the shortfall — particularly for US importers, who remain highly reliant.”
He added that China’s own export restrictions are creating further opportunities not just for US buyers, but also for Japan, Vietnam and other Asian manufacturing hubs that have long depended on Chinese supply.
However, French cautioned against reading too much into short-term shifts. “In a sector like mining, it's not that you choose who your customers are — If China's buying, then you're selling to China,” he said.
A shift in investor behaviour
While the initial flare-up in trade tensions saw a sharp pullback in mining exposures across Australia’s retail market, Talevski said local investors have become increasingly nimble in navigating the volatility.
“We definitely saw a real pullback from Australian retail investors — not just in mining but across the board — when the trade war started,” Talevski said. “But as the dust has settled, we’re starting to see more proactive conversations and more investors starting to take longer positions.”
Some of that opportunity lies in Australia's ability to move further up the value chain. “There’s a lot more discussion and investment now around how we actually process these minerals domestically, rather than just exporting raw product,” Talevski said. “That allows miners to value-add, potentially reduce tariff exposure, and command stronger prices.”
Critical minerals remain in focus
In the short term, volatility has also created tactical trading opportunities, particularly for more sophisticated retail investors.
“A lot of our Australian clients trading in US markets are taking advantage of the price swings — they’re trading intraday, using options and leveraged ETFs to trade the gamma, essentially scalping the price movement,” Talevski said.
But as some clarity emerges, he added, investors are gradually shifting back into longer-term positions. “We’re starting to see more buy-and-hold behaviour coming in now that there's a clearer picture emerging.”
Looking ahead, Talevski sees continued upside in critical minerals, despite the trade war swings, thanks to the necessities of the energy transition.
“The electrification of the world is not slowing down,” Talevski said. “We’re seeing strong demand for lithium, rare earths and other materials, and even though China is very much transitioning to a more self-sufficient energy environment, they’re still going to rely on imports as well.”