US President Donald Trump's proposed tariffs on steel and aluminium imports have brought new turmoil to world markets but the impact of the measures - if they materialise - on Australia are still far from clear.

Analysts and economists have mixed views, including that Australia could benefit in the long run if Mr Trump's move towards protectionism leads to retaliation from Europe and Asia.

Mr Trump has announced tariffs of 25 per cent on imported steel and 10 per cent on aluminium to protect US producers.

Tariffs are expected to be formalised this week or next week, and the White House has said that allies of the US, including Australia, won't be exempt.

UNSW Business School economist Tim Harcourt says a trade war between the US and Europe would hurt US exporters and increase costs for businesses using imported goods or components.

But Mr Harcourt, who was previously chief economist at Austrade, says Australian trade could benefit if the US becomes isolated.

"If Trump makes the US an erratic and chaotic trade partner, Australia will be seen by China, South Korea, India and ASEAN as safe, reliable and on side in the Asia Pacific, particularly given the withdrawal of the USA by the Trump administration of the Trans Pacific Partnership (TPP)," Mr Harcourt said on Monday.

"And given that the US is mainly a source of foreign investment, it is trade that matters for us in north-east Asia and that's where Australia must maintain its solid reputation as a reliable supplier and customer."

BetaShares chief economist David Bassanese says there is hope that the US president is blustering and that the actual policy change may be limited.

"Indeed, Trump has also talked tough with regard to North Korea, with little as yet much follow-up action," Mr Bassanese said.

Global stock markets, including Australia, have weakened in the wake of Mr Trump's move.

Iron ore prices have fallen on concerns US tariffs could impact global demand for steel.

But CBA mining and energy analyst Vivek Dhar says the tariffs may not have as big an impact on steel and iron ore markets as some think.

The tariffs are aimed at lifting US steel production and while US steel prices should increase as a result, "the rest of the world should be able to absorb the excess steel, particularly in south-east Asia," Mr Dhar said in a research note on Monday.

Mr Dhar said Iron ore markets should comfortably absorb the proposed tariff changes but stronger US steel output at the expense of production elsewhere in the world could be negative for iron ore consumption.

US steel is mostly produced via the electric-arc furnace process, which uses less iron ore than the basic oxygen furnace (BOF) process which accounts for 75 per cent of global steel production.

Mr Dhar said any decrease in the ratio of BOF in global steel production will weigh on iron ore demand.

Iron ore miner and aluminium producer Rio Tinto, the largest producer of primary aluminium in North America via its aluminium smelting operations in Canada, has reminded the US of the benefit of having reliable suppliers.

Rio Tinto said aluminium from Canada and Australia has been a reliable and secure source for US manufacturers, including the US defence sector.

"US law and policy consider the resource and manufacturing capabilities of Canada and Australia to be an integral part of the US defence industrial base," a Rio Tinto spokesman said.

"We will continue to engage with US officials to underscore the benefits of the integrated supply chain among long-standing allies."