China’s not winning its trade war with Australia

May 19, 2021/in /by Rudolf Huber

If you sell iPhones, you need customers that want iPhones. iPhones are no commodity as someone who wants an iPhone won’t go for a Huawei. Or vice versa. Consumer electronics are no commodities. You cant replace one for the other. Iron ore, crude oil, wheat, or LNG are commodities in this sense. If the biggest consumer of raw commodities shuns a big producer, he needs to suck another market segment dry. This means that those folks will buy from the shunned country. You can sanction consumer products. It’s much harder with commodities.

China hasn’t been able to hurt the Australian producers of the two big commodities that really matter. If this is a trade war, Australia is winning its first phase quite handsomely.

The Sydney Morning Herald

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