During the latest Relative Return Insider podcast, AMP economist My Bui discussed the success of the critical minerals deal reached between Australian Prime Minister Anthony Albanese and US President Donald Trump from the pair’s long-awaited meeting last week.
After months of speculation over whether the meeting would happen at all, Bui characterised the outcome as having been broadly positive for both sides.
“Luckily, Australia has always been a ‘lucky country’, and we do have some of those reserves, not as much as China, but we can still dig stuff out of Australia and sell those things,” she said.
The deal, signed in Washington DC, will see the United States and Australia invest over $3 billion in critical mineral projects within the next six months. These projects, estimated to hold recoverable resources worth $53 billion, along with other commitments, have already ignited investor interest in Australia’s domestic critical minerals sector.
The partnership comes amid mounting US efforts to reduce reliance on China for rare earths and other industrial minerals, critical for nearly all modern products, from phones and household electronics to washing machines.
At the same time, recent suggestions have emerged that Australia should “decouple” from China, especially in light of Treasurer Jim Chalmers’ trips to the US and South Korea, where he promoted Australia as an investment destination beyond its largest trading partner.
However, Bui emphasised that this deal demonstrates Prime Minister Albanese’s ability to maintain strong relationships with both major partners.
“Either way, trade is good for Australia … Exports are about 27 per cent of our GDP, so to be honest, either way, it’s a pretty good outcome for us in that sense,” she said.
Instead, she described the “decoupling” narrative as a challenge for the US and China, with Australia uniquely positioned to benefit from both nations.
“Yes, they are trying to decouple from each other. The US is already very dependent on China for rare earths,” Bui said. “But I think the difference between Australia and the US here is that our products are quite fungible.
“If we don’t sell to the US, if we actually put in some investment to dig this stuff out the earth, we can actually still sell to China. China still needs that stuff as well,” she told Relative Return Insider listeners.
Moreover, Bui noted Australia still has the opportunity to sell these minerals to other emerging markets which are also trying to boost their manufacturing industries.
Alongside the critical minerals deal, the podcast also highlighted President Trump’s stated goal of increasing Australian super fund investment in the US, aiming to raise it from around $400 billion to nearly $1.5 trillion within the next decade.
Although Bui initially questioned the feasibility of these headlines, she said a closer look at the figures suggests this may be a natural progression rather than an official change in policy.
As she explained, assuming an 8 per cent market return, combined with population and wage growth, the investments Australian superannuations funds made in the US are already nearing the 13 per cent annual growth required to achieve this figure within that time frame.
“Even if you don’t do anything, you’re going to get pretty much very, very close to that number already,” she said.
Despite government volatility and a three-week shutdown, she emphasised that the US economy has maintained a solid growth rate of approximately 3 per cent – suggesting that it will likely remain the dominant economy in the near term.
Bui concluded that this super deal, while perhaps more symbolic than binding, highlighted the deepening trade relationship between the two nations without detracting from other partnerships.
“The US will grow, but Australia will grow very well as well.”
