I've been contemplating why the Australian Treasurer Jim Chalmers and South Korean Finance Minister Choi Sang-mok met for a conversation on April 9th, when Australia is holding an election and nothing can really happen? Source
In my opinion, once Australia has certainty following an election, large budgets are or have been framed. South Korean companies like POSCO have searched worldwide for safe secure partners following Trumps tariff wars and decided that it needs to join forces and Australia is too hard to pass up. IMO, they might need both RNU's BAM project and the Whyalla steel works as one complete package.
Trump has changed world trade by destroying the rule-based international system that looks after everyone including smaller nations. Prior to Trump's tariffs, which is when most of the African deals were done, poorer countries, who are not as economically resilient, needed the support of wealthy ones. Trump's actions has created a divide between rich and poorer governments, at least in the short to medium term. I think now South Korea and Australia will ultimately consolidate resources as we have about the same GDP (US$1.8 v 1.7 trillion respectively), to help build a more resilient supply chain exChina.
This may not be good for developing nations in the short term who have smaller GDPs. This is because Australia is a safer long-term investment destination. It has established communities, multi-agricultural practices, rail and road infrastructure and port networks, and therefore a stable economy. We have shown resilience during a pandemic and will likely show resilience again should one rise. Together, these factors indicate that Australia's raw materials sector with government initiatives and support has the ability to circumvent trade concerns and provide the stability for future world growth outside of China.
In the end, everyone should survive because there is simply so much demand needed. However, the saying - before someone can help others, they need to be capable and in a good state themselves, holds true.
Once Australia comes out of election mode we will see what happens. Only 4 more trading days until the vote.
AIMO, DYOR, GLTA(patient)H
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