"On the back of the conversation, they were happy that Australia is going to be OK."

The breakthrough came as the two-day summit closed with world leaders unable to resolve differences on climate change and globalisation and there was no condemnation of North Korea over its provocative missile test.

Trade agreements

In other trade developments, Mr Turnbull and Indonesian President Joko Widodo agreed to conclude a bilateral trade deal between the two nations by the end of the year.

Mr Turnbull acknowledged there was "a little bit of resistance to change on each side" that needed to be overcome "but the important thing is you have a very strong message from the President of Indonesia himself with me saying that we have to get this deal done by the end of the year and I think that is a great development".

And following talks with European Council President Donald Tusk, Mr Turnbull said it was agreed to finalise a free trade deal with the European Union by the start of 2019. "It's a realistic but ambitious objective," Mr Turnbull said.

Persuading the Trump administration to carve out Australian steel represents a significant victory given Mr Trump went to the G20 with a hardline "America first" stance against the free trade component of the agenda, including his position on steel.

So much so that the US was singled out in the final communiqué released by the world's 20 largest economies.


While the nations agreed to pursue free trade, there was a clause enabling "trade defence instruments", a code for tariffs, which was insisted by the US.

"We will keep markets open, noting the importance of reciprocal and mutually advantageous trade and investment frameworks," the communique said.

The G20 will "fight protectionism including all unfair trade practices and recognise the role of legitimate trade defence instruments in this regard".

But while the G20 leaders agree to address overcapacity and pricing in global steel markets it was left open for Mr Trump to impose new steel tariffs if he believes they are needed.

As expected, the US, which has withdrawn from the Paris agreement under Mr Trump, was also left isolated over climate change when the other 19 G20 members reaffirmed their commitment to the 2030 reduction targets agreed to in Paris while the US held out.

The final G20 communique said all G20 members except for the US "state that the Paris Agreement is irreversible".

It stated the US "will immediately cease the implementation of its current nationally determined contribution and affirms its strong commitment to an approach that lowers emissions while supporting economic growth and improving energy security needs".

Progress on steel tariffs


The steel carveout also represents another step towards a stronger relationship between Mr Turnbull and Mr Trump following the rocky start earlier this year over a hostile phone call about a US pledge to take asylum seekers.

In Hamburg, Mr Turnbull cited himself and wife Lucy being offered a ride to a function by Mr Trump in the president's custom-made, bullet-proof limousine, known as "the beast".

"It was very kind of him, we went from a reception to the concert theatre and he and (first lady) Melania invited Lucy and I to ride with him in the car," Mr Turnbull said. "We talked about a number of things, including some old mutual friends. So look, President Trump and I get on very well, which is good."

Last year's G20 in China resolved to try and combat steel overproduction and dumping by establishing a global forum that would seek a solution and report back to the G20 in Hamburg.

But Mr Trump wants to impose sanctions using a rarely used 1962 law that allows the President to unilaterally apply tariffs or quotas to protect national security. This is despite little of the steel imports being actually used for defence.

The exemption carved out by Mr Turnbull will be a relief for BlueScope Steel, whose US-based subsidiary Steelscape produces 446,000 tonnes of metal-coated steel and 332,000 tonnes of painted steel coils for non-residential building and construction.

It employs 400 Americans at its two manufacturing facilities in California and Washington state, which import the raw materials from Australia and Asia.

BlueScope had warned the US Commerce Department that the financial viability of Steelscape would be "jeopardised" by tariffs.


Rio Tinto's smelters in Quebec and British Columbia are the largest supplier of primary aluminum in North America and account for more than half of the $US4 billion ($5.2 billion) in annual Canadian sales to the US.

G20 host German Chancellor Angela Merkel said on Friday that leaders needed to find a common solution to steel overproduction, otherwise the risk of "bilateral actions increases".

Mr Trump left his first G20 isolated on free trade and climate, inviting scorn from some quarters.

"The G20 communique shows that smart, modernising economies understand that climate action is the securest route to prosperity, productivity, safety and health," said Christiana Figueres, Mission 2020 Convenor and former executive secretary of the United Nations Framework Convention on climate change.

"The world's major and emerging economies have made clear that the Paris Agreement is in their national interest and that it offers a wealth of opportunities for growth.

"Today the true logic of climate action has won out."

Dr Merkel said it was better to isolate the US on climate than water down the final communiqué to accommodate its concerns.

"I think it's very clear that we could not reach consensus, but the differences were not papered over, they were clearly stated," she said.