Australia gained a carve-out from those tariffs when then-prime minister Malcolm Turnbull negotiated the exemption directly with Trump at the G20 summit in Germany, and then-ambassador Joe Hockey made the case for special treatment because of the ANZUS security alliance.
Prime Minister Anthony Albanese has made a similar argument for exemptions in recent weeks, noting the security alliance as well as the fact that the US sells more to Australia than it buys in return, generating a trade surplus.
Prime Minister Anthony Albanese faces a tough job in convincing Donald Trump not to impose tariffs on Australian metals.Credit: James Brickwood
But Turnbull said on Monday it was wrong to claim the special treatment secured in 2017 was based on the security alliance because he negotiated with Trump on the economic case for exempting Australia.
“I was able to directly persuade Trump that imposing a tariff on Australian steel and aluminium was not in America’s interest,” the former prime minister said.
“We discussed the issue directly on many occasions, and it took some time to change his mind, but he listened to the detailed economic arguments that I made. Of course, it helps that we have a trade deficit with the Americans, and they could not get a better trade deal than the one they have with us.”
A key argument, Turnbull said, was that the Australian steel shipped to America was almost exclusively from Bluescope for Colorbond roofing material in California. Turnbull pointed out that US tariffs on this steel would not produce any additional American steel because the cost of shipping it from Australia was lower than the cost of transporting steel from the east coast of the US.
“The only impact would be to make Colorbond more expensive in California which would hurt Americans and their construction sector,” he said.
Bluescope, a listed company based at Pork Kembla in NSW, said it had been investing in the US for three decades.
“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,” said a company spokesman in a statement.
Shares in BlueScope rose by 4 per cent in early trading on the back of the news, as the company has $5 billion of investments in the United States.
NSW Premier Chris Minns said the tariffs would be a “massive” challenge for the national economy.
“Australian steel and Australian aluminium competes without any tariffs – we fight with the rest of the world for market access,” he said.
“We’re prepared to accept goods from the rest of the world, but trade wars are in no one’s interest, particularly not Australia’s.”
Nationals leader David Littleproud said the government may have to replace Rudd as US ambassador to ensure Australia has the best response to the tariffs.
Australia’s ambassador to the US Kevin Rudd had a rocky relationship with Donald Trump’s team during the US election campaign.Credit: Alex Ellinghausen
“If there is a decision to be made and that Kevin Rudd’s not the right person to have these discussions, then we should be mature enough as a country to send someone who can have those discussions to get that carve-out,” Littleproud told reporters in Parliament House.
Two former Australian ambassadors to the US, Hockey and Arthur Sinodinos, have warned against dropping Rudd, while Turnbull has said it would send the “worst possible signal” to the Trump administration.
Littleproud said the US should see Australia as an ally because of the AUKUS alliance on nuclear-powered submarines.
“You’d be leading in with the right personnel, with those that have had a tried and tested relationship with the previous Trump administration, in drawing on that experience and those relationships and also reinforcing the close relationship that we’re able to tie under AUKUS and the fact that we are doing much of the heavy lifting under AUKUS as well,” he said.
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“We’re not, we’re not taking a free ride with the United States, and particularly with steel. Much of that steel is going to come back in submarines. So, there is a compelling case for Australia to have those conversations with the United States. They should be having those in the United States, and we should be sending the right people to have those discussions.”
US Defence Secretary Pete Hegseth emphasised the strength of the two nations’ security relationship during talks with Deputy Prime Minister and Defence Minister Richard Marles in Washington on the weekend after the Australian government paid the first $800 million in its agreed support for US industry to underpin AUKUS.
“The president is very aware [and] supportive of AUKUS,” Hegseth told reporters. “[He] recognises the importance of the defence industrial base … the investment Australia is willing to make.”
Trump granted duty-free quotas on steel and aluminium tariffs during his first term to several trading partners, including Canada, Mexico and Brazil.
Former president Joe Biden extended these quotas to Britain, Japan and the European Union, and US steel mill capacity utilisation has dropped in recent years. White House press secretary Karoline Leavitt said that the new tariffs would be on top of existing duties on steel and aluminium.
The scale of Trump’s overall tariff ambitions remains unclear. Trump has also pledged to impose tariffs on other goods, including pharmaceuticals, oil and semiconductors, and has said he’s considering import duties on the European Union.
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Last week, Trump imposed a 10 per cent tariff on Chinese goods. Beijing announced retaliatory measures slated to take effect later this month that were more calibrated in scope, targeting only imported goods from the US valued at $US14 billion ($22.3 billion) in 2024. That marked a more cautious approach from China than in Trump’s first term when the world’s two largest economies traded tit-for-tat trade levies for years.
Trump had vowed to hit China, Canada and Mexico with tariffs, accusing the nations of failing to do enough to help stem the tide of illegal drugs and undocumented migrants across US borders.
But last week, he paused plans for the 25 per cent tariffs on the two North American countries until March 4 after their governments made modest pledges to help address his border concerns.
With AP, Reuters, Bloomberg
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