Donald Trump has issued a crushing blow to the Albanese government by refusing to grant an exemption from tariffs on steel and aluminium imports.
White House press secretary Karoline Leavitt revealed that would not be exempt during a press conference at the White House on Wednesday morning, n time.
Ms Leavitt was asked whether would be spared from the 25 per cent tariffs – as it had been during Trump’s first term – and confirmed the president had ‘considered it and considered against it’.
‘There will be no exemptions,’ Ms Leavitt said.
She added the United States was prioritising ‘American-first steel’ and that n-owned companies could ‘consider moving steel manufacturing’ to the US to escape the tariffs.
The tariffs will make n steel and aluminium much more expensive to US buyers and therefore flatten demand, and will be imposed from 3pm on Wednesday (AEDT) only months out from an election.
There are also fears countries hit by similar tariffs could be forced to export low-cost or heavily subsidised steel and aluminium to – undercutting local manufacturers, including the troubled Whyalla steelworks now in administration and Newcastle’s Tomago Aluminium.
News of the tariffs sparked calls from Aussies to boycott American products, given the tariffs contravene a 2005 free trade deal between and the United States.
‘It’s now ‘s turn to boycott everything American,’ one wrote on Facebook.
Another added: ‘Need to put a tariff on all American cars coming into America.’
One even demanded a boycott on alcohol such as Jim Beam and Jack Daniel’s.
Prime Minister Anthony Albanese had said on Monday his government would ‘continue to engage constructively’ with the United States on getting an exemption to the tariffs, but Wednesday’s announcement ended those hopes.
‘It is in ‘s interest, but it’s also in the economic interests of the United States for to be exempted,’ Mr Albanese said.
It comes despite President Trump telling Mr Albanese last month that he would give the prospect of an exemption ‘great consideration’ as was one of few countries that ran a trade deficit with the US – where we bought more from them than they bought from us.
However, White House Senior Counsellor for Trade and Manufacturing Peter Navarro later said was ‘killing’ America’s aluminium industry.
Following Mr Navarro’s comments, ‘s Ambassador to the United States Kevin Rudd and Treasurer Jim Chalmers pleaded for an exemption, in a series of meetings.
The tariffs will be imposed from 3pm on Wednesday (AEDT).
The United States is ‘s third biggest two-way trading partner after China and Japan, and it was ‘s fifth biggest export market in 2023.
AMP chief economist and head of investment strategy Shane Oliver estimates steel and aluminium exports to the United States make up just 0.03 per cent of ‘s gross domestic product.
The tariffs will make n steel and aluminium much more expensive to US buyers and therefore weaken demand, affecting South ‘s Whyalla steelworks, now in administration, and the Tomago Aluminium smelter in Newcastle.
But n steelmaker BlueScope already manufactures steel in Ohio so it won’t suffer.
There are also fears countries hit by similar American tariffs could be forced to export low-cost or heavily subsidised steel and aluminium to , which will undercut local manufacturers.
Widespread US tariffs risk strengthening the US dollar, as the Americans buys fewer imports.
This would have the effect of weakening the n dollar, now trading at just 63 US cents, which makes manufactured imports in particular more expensive, adding to consumer inflation.
ns would also pay more to travel overseas.
Dr Oliver said President Trump’s trade wars were likely to keep the n dollar at weak levels ‘with the risk skewed to the downside if Trump continues to ramp up tariffs’.
Beef, precious metals, pharmaceuticals, aluminium, aircraft parts and wine are ‘s biggest exports to the US.
However, Foreign Minister Penny Wong had admitted, at the end of February, that had a ‘hill to climb’ when it came to receiving an exemption, despite carve-outs being agreed to in 2018.
Shadow finance minister Jane Hume accused Mr Albanese and Trade Minister Don Farrell of failing to do enough to secure an exemption.
‘Has the Prime Minister been to the States? No. Has the Trade Minister been over there? He said he was going over this week and failed to do so,’ Senator Hume said.
‘I’m urging the Prime Minister to pick up the phone… We are entirely dependent on a strong US economy and our concern is that our aluminium and steel manufacturing sectors here will suffer.’
Housing Minister Clare O’Neil said negotiations ‘will continue to the very last moment’.
‘We have a never-say-die approach to these things. It is obviously in ‘s best interests for these tariffs not to be imposed,’ she told Sunrise on Wednesday.
‘We are doing everything we can and fighting with every single tool we have available in order to get ourselves in the best possible position.’
‘s economy last year posted some of the weakest growth since the 1991 recession, outside of the Covid pandemic.
This was despite immigration levels hitting record-high levels above 500,000 only months earlier.
But Ms O’Neil was optimistic about weathering the effects of American tariffs on , and its biggest trading partner China.
‘We have seen time and time again where we have had global turmoil and the n government and the n people have managed to build and grow our way out of it,’ she said.
‘We’re going to survive and thrive no matter what happens here.
‘We have a strong, great economy here and will continue to build on that.’
President Trump wasted little time fulfilling his ‘America First’ election promise of imposing the most draconian taxes on American imports since the Depression-era Smoot-Hawley Tariff Act, of 1930.
On Tuesday, the Republican commander-in-chief revealed he would double Canada’s tariff on aluminium and steel imports to 50 per cent, amid an escalating trade war between the two North American neighbours.
The tariff initially imposed on Canada was 25 per cent – in line with the steel and aluminium tariffs being levied on all imports to the United States.
Doug Ford, the Premier of Canada’s Ontario province, announced he would place a 25 per cent surcharge on electricity it provided to the US states of Minnesota, New York and Michigan.
In response, Trump said he had instructed his secretary of commerce to specifically increase Canada’s tariffs to 50 per cent.
Mr Ford then revealed he would cancel the 25 per cent tariff on the US after revealing he had spoken with Commerce Secretary Howard Lutnick.
The pair have agreed to meet on Thursday to discuss reciprocal tariffs that Trump wants to put in place on April 2.
Trump, in response, agreed not to double tariffs on Canadian steel and aluminium to 50 per cent. They will stay at 25 per cent.
Mexico has also been slapped with 25 per cent tariffs on goods being imported into the United States.
Meanwhile, China has been hit with 10 per cent tariffs, which could rise even higher, given that Trump campaigned to inflict a 60 per cent tariff on Chinese goods.
In 2018, was granted an exemption from 25 per cent American tariffs on steel and 10 per cent import taxes on aluminum after then Liberal prime minister Malcolm Turnbull pointed out the US had trade surpluses with – where we bought more goods and services from Americans than they bought from us.
The Albanese Government made the same argument in 2025 but Mr Turnbull said the Trump Administration didn’t want any exemptions this time.
‘The Trump Administration regrets giving exemptions last time because once they gave an exemption to then they ended up having to give an exemption to somebody else… so I think this time there will be no exemptions and they will apply right across the board,’ Mr Turnbull told ABC Radio National on Tuesday.
The tariffs also breach a 2005 free trade deal between the United States and , which was designed to enable to export 97 per cent of non-agricultural goods to the US duty free.
The n share market fell to a seven-month low on Wednesday, as the tariffs made investors nervous, with the benchmark S&P/ASX200 falling 1.6 per cent in early afternoon trade.