Prime Minister Malcolm Turnbull has confirmed Australia will be exempt from US President Donald Trump's new steel and aluminium tariffs — but denied the two leaders are working towards a new "security agreement".

Mr Trump all but confirmed the exemption earlier on Saturday when he tweeted he had spoken to Mr Turnbull, who he said was "committed to having a very fair and reciprocal military and trade relationship".

"Working very quickly on a security agreement so we don't have to impose steel or aluminium tariffs on our ally, the great nation of Australia!" he tweeted.

Mr Turnbull replied, hailing the "great discussion on security and trade" and thanking Mr Trump for confirming new tariffs "won't have to be imposed" on Australia.

"I was very pleased the President was able to confirm he would not have to impose tariffs on Australian steel and aluminium," he later told journalists.

"You have to be relentless in fighting for Australian jobs and Australian exports and that's what I've done."

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Sorry, this video has expired Trump suggests Australia may be exempt from tariffs

'Security agreement' a reference to legal paperwork, Turnbull says

But Mr Turnbull denied the two countries were working on a new "security" agreement, saying Mr Trump was referring to the legal paperwork and proclamation that will now follow to put the exemption in place.

"We have the closest possible military and security alliance with the United States and it gets closer all of the time," he said.

Australia buys about 60 per cent of its "warfighting assets" from the US, shares intelligence as part of the Five Eyes alliance, and allows thousands of US marines to rotate through Darwin each year.

ABC News understands there is some confusion about Mr Trump's choice of words and the two leaders did not discuss a new security agreement.

The exemption is being seen as a diplomatic coup and follows months of intense lobbying at the highest levels of the Trump administration from Mr Turnbull, his senior ministers, Australia's Ambassador Joe Hockey and even golfing legend Greg Norman, who is a friend of Mr Trump's.

But the outcome was far from certain. Just days ago, Foreign Minister Julie Bishop said she had "no expectation" that Australia would be spared.

Shadow trade minister Jason Clare welcomed the "great news" and congratulated the Coalition on securing the exemption which, he said, Australia deserved.

But he urged Mr Turnbull to put in place measures to prevent steel, which was destined for the United States, from being "dumped" in Australia and below-cost prices.

"We've got it, that's terrific," he said.

"But there's one more thing we need to do and that's beef up the powers of the dumping commission so that we're ready just in case steel and aluminium gets dumped here in the weeks ahead."

Mr Trump's tweet came a day after he imposed tariffs of 25 per cent on steel and 10 per cent on aluminium.

The tariffs are due to take effect within weeks and so far Australia is the only country other than Canada and Mexico to have won an exemption.

Announcing the details in Washington on Friday, Mr Trump singled out Australia when he said he may exempt countries with which the US has good trade and military relationships.

"We will be making a decision as to who they are — we have a very close relationship with Australia," he said.

West Australian Premier Mark McGowan said he believed Mr Trump's actions could still have some unforeseen and wide-ranging consequences, given the state exports iron ore to countries like China and Japan.

"You've got to remember America wants a steel tariff on and then there might be retaliation from other countries and we are the biggest iron ore supplier in the world so I'm still concerned what Donald Trump is doing because it might have an adverse impact on Western Australia due to the tens of thousands of jobs that rely upon our iron ore industry," he said.