The federal government says it’s already making the case to US President Donald Trump as he signals plans for sweeping 25 per cent tariffs on steel and aluminium imports.
It is already facing pressure to ensure Australia is carved out of any tariffs on the products, in a repeat of diplomatic efforts achieved in 2018.
Back then Australia, along with countries like Canada, Mexico and the UK, was carved out of new tariffs placed on steel and aluminium imports to the US.
Last year, Australia exported 223,000 tonnes of steel to the US, and 83,000 tonnes of aluminium.
The government is pointing to “deep” levels of contact between its most senior figures and the Trump administration, including Deputy Prime Minister Richard Marles’ visit to Washington DC last week.
Trade Minister Don Farrell said the government is already making the arguments to keep trade as open as possible.
“We have consistently made the case for free and fair trade, including access into the US market for Australian steel and aluminium,” he said.
“Our bilateral economic relationship is mutually beneficial — Australian steel and aluminium is creating thousands of good paying American jobs, and are key for our shared defence interests too.”
Don Farrell has been waiting for his counterpart’s confirmation to travel to the United States. (ABC News: Matt Roberts)
Australian steel is used in the construction of US Navy submarines, including the Virginia-class nuclear submarine that Australia is set to acquire under the AUKUS defence pact.
Labor figures are also highlighting that it took months of diplomatic advocacy from the Turnbull government to secure the 2018 steel deal.
Opposition and industry groups wants swift action
The Coalition is arguing new tariffs would provide the key test of the government’s efforts to build relations with the new administration in Washington, in particular US ambassador Kevin Rudd.
Nationals leader David Littleproud said Australia had a good case to make to Mr Trump — and it is a question of whether the government can adequately argue it.
“This is a test for Anthony Albanese and Kevin Rudd to see and to make sure that we get a carve out,” he said.
“We have a very compelling story. We just signed a check for over $500 million for AUKUS, we’re actually coming forward with the goods for the United States in terms of that AUKUS agreement.
“We’re paying our own way.”
Innes Willox from industry body AI Group said the tariffs announcement should not come as a surprise, and they must be avoided.
“The president is simply doing what he said he would do,” he said.
“Pollyannaish hopes that we would fly under the radar have proven to be sadly misplaced. That this advice has been given the day after our deputy prime minister was in Washington to hand over billions of dollars to secure the AUKUS submarine deal is particularly troubling.
“It is now up to the federal government to quickly step in and protect Australian industry and producers from being caught up in a rapidly escalating global trade war. Reversing these tariffs must be a national priority.“
Innes Willox says securing an exemption from steel and aluminium tariffs should be the government’s first priority. (ABC News: John Gunn)
Steel and aluminium trade worth hundreds of millions of dollars
Australia’s steel and iron exports to the United States were worth US$237m in 2023, according to data from Trading Economics.
Australia’s largest steelmaker, Bluescope, exports steel to the United States and has its own significant operations in the country.
In a statement, the company said it is aware of the reports of new tariffs, and sought to highlight its expanding US presence.
“BlueScope has been investing in the United States for 30 years,” a spokesperson said.
“Most recently, we have spent $2 billion on acquisitions and brownfields expansion of our operations there. BlueScope is now the fifth largest steel producer in the US, employing 4,000 American workers.
“BlueScope abides by all trade rules and agreements. We will continue to work with the Trump administration and the Australian Government, as we await further details.”
Australia has had a free trade deal with the United States for two decades, and the vast bulk of trade between the two countries is currently tariff-free.
The federal government has been at pains to point out its trade deficit with the US since Mr Trump won last year’s election.
Australia exported about $33 billion to the US in 2023, and imported about $65 billion.
