Booming Iron Prices Cast New Light on China-Australia Trade Tensions

cc Flickr Ed Dunens, modified, https://www.flickr.com/photos/blachswan/27936367973/in/photolist-JyDbUM-wdXvS-aSjcir-YmaQyU-2haNErD-2hGRkqA-34Ydj3-2gaP4QR-2hD6juY-2gaN4qq-2haMApM-2haMFur-2gUiawX-SZ1JT1-2hqdMu5-2gaNtqQ-2hqfRnp-2hDgcCX-2gVhEXN-2hGDfKh-2hFdvj2-2hGn39m-2hHNyyf-2hDctte-2haMAkF-2hFnDn3-2gWgQxW-2hrHEYA-2hqchm2-2g5ya9R-2gaMwkV-2haQaMz-2gaNhSi-2gaN4jh-2gaNDEb-2gaNooQ-2haRtoR-2haRirw-2ghxo1s-2h5oRbS-2hGy2zf-2hFnuSh-2g5DKwy-2e31tXs-2hujwGZ-24qHQwD-2hrMBEh-RH5CUJ-2cRhAAQ-2hDd13W

Summary

The Chinese authorities have been slapping sanctions on a growing list of Australian exports through 2020. But they have stopped short of targeting iron ore, a commodity that accounts for over half of Australian exports to China. The reason for this is simple: China’s supply-side-powered recovery runs on steel, and Australia is one of just a handful of exporters providing the iron ore needed to make it.

Will Canberra seek to use this leverage, and in doing risk escalating bilateral tensions into a full-fledged trade war?

 

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