Pressure is on the Albanese Government to secure a tariff exemption after President Donald Trump announced a 25 per cent tax on all steel and aluminium imports to the US.
Trump announced the tariffs on imported metal would broadly apply without exemptions, during a media conference aboard Air Force One as he was flying to the Super Bowl in New Orleans.
‘Any steel coming into the United States is going to have a 25 per cent tariff,’ he told reporters on Monday morning (AEDT).
The n share market’s benchmark S&P/ASX200 was 0.5 per cent weaker causing an estimated $15billion loss following the announcement.
A tariff on n goods would be a ‘slap in the face’ for domestic industry and the US-n alliance, Industry Group chief executive Innes Willox said after Trump’s announcement.
‘It is now up to the federal government to quickly step in and protect n industry and producers from being caught up in a rapidly escalating global trade war,’ he said.
‘Reversing these tariffs must be a national priority and the government must use all the leverage at its disposal to quickly turn this around.’
In 2018, was granted an exemption from 25 per cent American tariffs on steel and 10 per cent import taxes on aluminum after then prime minister Malcolm Turnbull pointed out the US had trade surpluses with – where Aussies bought more goods and services from Americans than they bought from us.
Canada, Mexico, the European Union and the UK were also given exemptions on steel and aluminium tariffs.
But this time, President Trump has imposed tariffs more broadly, even though Anthony Albanese’s government made the same point about the American trade surpluses with that have stretched back to 1952.
Nationals leader David Littleproud said urgent talks were needed, contrasting Labor’s fruitless approach with the former Coalition government’s ability to send then ambassador Joe Hockey to negotiate exemptions with the US seven years ago.
‘We were able to send Joe Hockey there, to be able to put a cogent argument about carving out,’ he told Sky News on Monday.
Mr Littleproud said ‘s current Ambassdor to Washington, former prime minister Kevin Rudd, was proving to be a liability.
‘Unfortunately, we’ve got an ambassador there that’s made disparaging comments about the President. And we’ve got a Prime Minister that’s made disparaging comments about the President,’ he said.
Opposition trade spokesman Kevin Hogan agreed, saying it was time critical for the government to ensure n industry receives an exemption from the tariffs.
‘A critical component was a strong ambassador – we had Ambassador Hockey who helped to successfully negotiate exemptions from United States steel and aluminium tariffs,’ he said.
‘The Ambassador to the US is one of the most critical diplomatic roles has. Albanese hand-picked Kevin Rudd for this position. Albanese and Rudd have a big job to do here.’
President Trump’s announcement was made a day after ‘s Deputy Prime Minister and Defence Minister Richard Marles met with American Defence Secretary Pete Hegseth.
‘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,’ Mr Willox said.
CommSec chief economist Ryan Felsman said n consumers were likely to end up paying more for imports as the American tariffs weakened the n dollar, now worth 62 US cents.
‘You’ve got those underlying cost increases which potentially affect consumers,’ he told Daily Mail .
‘The 25 per cent tariffs on steel and aluminium would likely have some impact on Aussie producers.
‘On the flip side, tariffs would have an impact on the Chinese economy which is obviously our biggest trading partner and its demand for n resources would weaken.’
Pepperstone head of research Chris Weston said ‘s exposure to the US market was not huge, so the effect of the tariffs would be relatively manageable in the grand scheme of things.
n exports of iron and steel to the US valued $US237.5 million in 2023 while aluminium exports valued $US316.9, United Nations COMTRADE data showed.
For some n metals producers, like BlueScope Steel, the the tariffs could even be beneficial.
The n company makes steel in the United States, which Mr Felsman said would protect it from the effects of higher tariff barriers.
‘BlueScope is fairly well insulated from the tariffs,’ he said.
Mr Weston said a fall in steel prices would in fact benefit n manufacturers.
‘If you’re a direct producer of steel and you’re selling to the US market, obviously you’re going to take a hit from this,’ Mr Weston said.
‘But if you’re buying steel in the market and using steel for your final products, there could be a short-term negative hit to the steel price that could benefit your business.’
BlueScope shares climbed by more than two per cent in Monday morning trading on the ASX.
In a statement, Bluescope said it would work with the Trump administration and the n government, noting the company has invested heavily in the US, boosting American employment.
But diversified miner BHP was 0.6 per cent weaker, with Mr Felsman suggesting American tariffs would weaken global economic growth and therefore demand for n iron ore, the commodity used to make steel.
Economist Chris Richardson said the key implication of the tariffs for the Reserve Bank of and its decision whether to lower interest rates for the first time in five years was whether they would have a bigger impact on inflation or economic growth.
‘I’ve been in the camp that says, for Oz, Trump is more of a growth worry than an ongoing inflation worry,’ he said in a post on X.
‘But both sides of the ledger keep getting bigger.’
Trump’s announcement could potentially affect steel workers at Port Kembla, near Wollongong, and Whyalla, in South , along with aluminium manufacturers in Newcastle north of Sydney.
Treasurer Jim Chalmers was last week hopeful Trump would continue to exempt from his wide-ranging tariffs.
‘We are confident that we can navigate these changes coming out of DC. We are well placed, we are well prepared,’ he told ABC News Breakfast on February 4.
‘The Americans run a trade surplus with us, they have done since the Truman Administration I think in 1952, a substantial trade surplus.
‘Our relationship is mutually beneficial, and all of the conversations that we’ll have with our American counterparts will be about making sure that this really key economic relationship continues to be beneficial to both sides.’
In 2023, the United States had a $US17.7billion goods trade surplus with , which would be worth $A27.2billion at today’s exchange rate of 63 US cents.
The United States is ‘s third biggest two-way trading trading partner, but only the fifth biggest export market behind China, Japan, South Korea and India, who are bigger buyers of n iron ore and coal.
While Trump had campaigned to reintroduce hefty tariff barriers in 2024, he had also given hints since coming to office that tariffs could be used as a negotiating tactic on border policy, in a bid to force Canada and Mexico to stem the flow of illegal immigrants and drugs across its border.
During his first term in the White House, he repeatedly expressed concerns about American trading partners that sold more goods to the US than it bought from them.
The Trump Administration’s wider-ranging tariffs in 2025 are set to mark the most punitive import restrictions since the 1930 Smoot Hawley Tariff Act.
China imposed heavier tariffs on during the pandemic despite having a free-trade deal with since 2015, after then prime minister Scott Morrison called for an inquiry into the origins of Covid.