Why Donald Trump could pull the plug on Australia’s critical mineral future
Demand for Australia’s critical minerals could fall after the next US presidential election, a report has warned, with a second term for Donald Trump likely to slow short-term exports to the country.
epaselect epa11295724 Former US President Donald Trump attends his trial for allegedly covering up hush money payments linked to extramarital affairs, at Manhattan Criminal Court in New York, New York, USA, 23 April 2024. Trump is facing 34 felony counts of falsifying business records related to payments made to adult film star Stormy Daniels during his 2016 presidential campaign. EPA/TIMOTHY A. CLARY / POOL
The warning came in the Department of Industry’s latest Resources and Energy Quarterly report on Monday, which highlighted changes in the global electric vehicle industry.
The research also noted the prices of electric vehicle minerals, lithium and nickel, had begun to recover after falls in 2023, and resources and energy export prices had started to stabilise.
The report comes after worldwide demand for electric vehicles fell in the first three months of the year, and the US tightened its requirements for electric car tax credits.
But the June quarterly report found larger changes to American policies could affect demand for Australia’s critical mineral exports.
“The pace of US adoption of EVs and renewable energy technologies (including importation rates) could change depending on the outcome of the US presidential election in November, with significant implications for the demand for Australian critical minerals in the short-term,” the report said.
“Demand growth in other major markets (the EU and China) is likely to rise strongly.”
US President Joe Biden has introduced policy changes to support the adoption of electric vehicles, including tax credits under the Inflation Reduction Act, and announced a target of 50 per cent electric car sales by 2030.
But Republican nominee Donald Trump has promised to reverse the electric vehicle policies if he wins office, and introduce a “100 per cent tariff” on electric cars from Chinese brands made in Mexico and imported to the US.
The policy reversal would come despite strong electric vehicle sales in America, with 1.2 million cars sold in 2023.
The Australian report noted electric vehicles made up 10 per cent of the US car market last year, more than 20 per cent of cars in Europe, and almost 40 per cent in China.
Despite the potential setback, Resources Minister Madeleine King said Australia’s mineral exports would remain “the bedrock of our economy”.
“We are seeing strong demand for the critical minerals and strategic materials needed for low-emissions technologies, including lithium, nickel, copper and aluminium,” she said.
“The forecasts underscore the need to support growth in our emerging critical minerals sector.”
The government report found resource and energy exports earned $417 billion in the year to June 2024, down from a record $466 billion in 2023.
Export earnings were forecast to fall to $356 billion by June 2026.
