US president says Australia is a ‘great country’ but stops short of saying it will be spared the 25% levy

This article is more than 2 years old

This article is more than 2 years old

Donald Trump has given his strongest hint yet that Australia will be exempt from US tariffs on steel and aluminium imports.

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The US will impose a 25% tariff on foreign steel and a 10% tariff on foreign aluminium imports, the president announced at a media conference at the White House on Thursday.

Trump, who was flanked by steel workers as he made his announcement, said Canada and Mexico will be exempt from the tariffs and allowed a 15-day negotiation period for countries such as Australia to win similar treatment.

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Earlier in the day he made strong hints that Australia would be given special consideration. “We’re are going to be very fair, we’re going to be very flexible, but we’re going to protect the American worker,” he said before a cabinet meeting in Washington.

“We’re negotiating with Mexico, we’re negotiating with Canada. We have a very close relationship with Australia. We have a trade surplus with Australia. Great country, long-term partner. We’ll be doing something with them. We’ll be doing something with some other countries.”



But when it came to the formal announcement there was no mention of Australia.

Trump said if Canada and Mexico would lose their exemption if the US did not get what it wanted in talks to renegotiate the North American Free Trade Agreement.

Robert Lighthizer, the US trade envoy, will be leading negotiations with countries that want to be exempted from the tariffs.



The finance minister, Mathias Cormann, said the government was “very encouraged” by the news but stressed there was “a bit further to go” over the next 15 days.

Cormann said the Turnbull government had been wise to work calmly behind the scenes to secure an exemption, rather than fuelling tensions and speculation about a possible trade war.

“We were very perturbed earlier in the week when the alternative view put forward by [Labor leader Bill Shorten] was to essentially escalate matters through retaliatory action,” he said.

On Friday last week, when Australia was taken by surprise by Trump’s announcement that he wanted to impose tariffs, trade minister Steve Ciobo warned that Australia reserved the right to doing anything necessary to protect the national interest if it wasn’t exempted from the tariffs. Labor backed that view on Monday.

Trump’s proclamation came on the same morning that Australia signed the renegotiated 11-country Trans-Pacific Partnership trade deal, which is expected to take effect by the end of the year.

The deal affects goods worth US$14tn. It covers Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Speaking at the signing ceremony in Chile, Ciobo said legislation to formalise the pact would be introduced to parliament this month, before a joint standing committee an inquiry into the TPP. He expected Australia’s domestic processes to be settled by the end of September.

“This is a very good day for trade,” Ciobo told a media conference in Santiago on Friday. “We are sending a mutual signal that we recognise the policy orthodoxy of trade.”

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The deal had been on life support after the US withdrawal but was resuscitated in January after lobbying from Japan and Australia.

Labor also announced a new plan on Friday to strengthen Australia’s anti-dumping legislation in an attempt to prevent foreign companies dumping cheap steel into Australia.

The party said it would triple the penalties for dumping cheap overseas steel and other products in Australia if it won the next federal election. It would give the Anti-Dumping Commission an extra $3.5m a year to make sure countries were not pouring below-cost steel into Australia.

But the Turnbull government insists the changes aren’t necessary.

Labor’s leader, Bill Shorten, said Trump’s plan posed a real risk to the Australian steel industry. “Labor will not let Australia become a dumping ground for cheap foreign goods sent here by trade cheats,” he said.

The commission would be given 30 extra staff and the new responsibility for monitoring sudden and large increases in imports.





He said Australia was lagging behind other countries, imposing just 24% duties on dumped steel in 2015 while the US imposed 256%. “Australia rarely imposes anti-dumping penalties in excess of 30%,” he said.