MELBOURNE – Global miner Rio Tinto sees fears of a trade war between the US and China weighing on its shares, even after the company won an exemption from US tariffs for its Canadian aluminium exports.
Nearly a third of all aluminium consumed by the US is supplied by Rio Tinto from Canada.
Canada escaped the 25% duty on steel and 10% on aluminium signed into law by US President Donald Trump this month, but Rio Tinto CEO Jean-Sébastien Jacques fears the impact of a broader trade war.
The real issue now is the "ripple effect" of what other countries are going to do in retaliation against the US tariffs, Jacques said.
"That's the one that really really concerns me," he said at a business event in Melbourne.
"The biggest concern that everybody has is a big trade war between China and the US. And we just hope that common sense will prevail."
Jacques said Rio Tinto's share price was a good proxy for the market's views. Its share price fell when the tariffs were first announced, but failed to recover when the exemption was granted for Canada, even though that had been the main risk for the company.
"So the markets are very nervous about it," Jacques said, referring to a potential US-China trade war.