Albanese will call Trump to push for exemptions on steel and aluminium tariffs

Australian Prime Minister Anthony Albanese plans to engage in dialogue with U.S. President Donald Trump to ensure Australia continues to receive exemptions from U.S. tariffs on steel and aluminum products. This comes after Trump indicated he would impose a 25% tariff on all steel and aluminum products imported into the United States, which would likely include products from Australia. The Australian government is actively seeking assurance that previous trade agreements will be honored.

Prime Minister Albanese stated in Parliament, "We will continue to work to ensure that Australia is able to obtain an exemption from the steel and aluminum tariffs." He revealed that a meeting with President Trump has been arranged specifically to discuss this matter. Albanese emphasized, "I will always defend Australia's national interests, and free and fair trade is in Australia's national interest. This government has a good record of working with other countries to protect and promote Australia's trade interests." This proactive approach underscores the government's commitment to safeguarding the Australian economy.

Prime Minister Albanese added, "We will continue to communicate with the United States through diplomatic channels, not through megaphones, but through diplomatic means." Following this news, the Australian Securities Exchange (ASX) fell 0.65%, losing 55 points shortly after opening. President Trump told reporters aboard Air Force One en route from Florida to New Orleans for the Super Bowl, "Any steel coming into the country is going to have a 25% tax." When asked about aluminum, he responded that "aluminum is the same" and would be subject to trade penalties. The market's reaction highlights the potential economic impact of these tariffs.

Trump also reiterated that he would announce "reciprocal tariffs," possibly on Tuesday or Wednesday, meaning that if other countries impose tariffs on U.S. goods, the U.S. would impose import tariffs on those countries' goods. He told reporters, "If they charge us 130% tariffs, and we charge them nothing, that's not going to happen." According to the United Nations COMTRADE database, Australia's steel exports to the United States are approximately $378 million ($237 million USD), and aluminum exports are approximately $503 million. These figures underscore the significant trade relationship at stake.

Shares of BlueScope, one of Australia's largest steel producers, rose 3.46% this morning, reaching AUD 22.26. BlueScope has manufacturing operations in the United States. Another Australian steel company, Bisalloy Steel, fell 5.05% after the announcement. Trump previously announced tariffs on steel and aluminum in 2018 during his presidency, and after negotiations between Trump and former Prime Minister Malcolm Turnbull, Australia was excluded from the list of affected countries. Trump's latest statement was released just days after the federal government sent AUD 798 million to Washington as part of the AUKUS submarine deal. The contrasting stock market reactions reflect the nuanced impact on individual companies.

TMX Transform, an international supply chain consulting firm, believes these tariff policies could put greater competitive pressure on Australian manufacturers, but the changes he seeks will not happen overnight. Strategic advisor Bruce Herbert stated, "Tariffs, coupled with the growing trend of localization, put pressure on Australian suppliers, even though their costs are already very high compared to the United States. Considering energy costs and many other disruptive factors such as inflation, transportation costs, and labor shortages, tariffs will only exacerbate this pressure." The potential long-term implications for Australian businesses are considerable.

Trump's remarks once again demonstrate his willingness to threaten and impose import taxes. Compared to his previous four years in the White House, this time he is taking tariff measures earlier, whereas previously he prioritized tax cuts and deregulation. Trump sometimes states that he views import taxes as a tool to force concessions on issues such as immigration, and at other times he sees them as a source of revenue to make up for government budget deficits. This unpredictable approach to trade policy creates uncertainty for businesses and international relations.