Since the United States signed a free trade agreement with Australia, which took effect on 1 January 2005, trade has increased 138% between the two countries, but not nearly as much as Australian exports to China has increased. In 2000, Japan imported the largest share of Australian steel, iron and aluminium (34%) and China imported 16%. That same year, the US imported 4% of these commodities, but their share of the imports has fallen markedly as China rapidly increased their imports.
By 2023, China imported 82% of Australia’s steel, iron and aluminium (US$7,703,300,000) and the US imported only .3% (US$267,000,000). Even when China began imposing steep tariffs on some Australian goods in 2020, Beijing did not add tariffs to imports of Australian steel and aluminium.
China overtook the United States as Australia’s largest trading partner in 2006 and they have not relinquished that title since. However, the United States remains Australia’s largest investment partner and more than 28% of Australia’s foreign investments are in the United States. As the tariff tensions increase, it will test the strength of not just the Australia-US Free Trade Agreement, but the relationship between Australia and its largest economic partner.
