U.S. President Donald Trump signed two executive orders imposing a 25% tariff on steel and aluminum imported into the United States. This action followed a phone call with Australian Prime Minister Anthony Albanese, during which Trump confirmed he was considering an exemption for Australia. These tariffs represent a significant shift in trade policy.
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02-11, 2025Trump, while signing the orders in the Oval Office, claimed that this would revitalize American manufacturing. "Protecting our steel and aluminum industries is a must, and today I am streamlining our tariffs on steel and aluminum so everyone is clear on what that means. It's 25%, no exemptions or exceptions," he stated. This statement underscores the administration's commitment to domestic industry.
However, Trump later confirmed to reporters that an exemption for Australia was being considered after speaking with Albanese, whom he called a "very fine man." "We have a trade surplus with Australia, one of the few countries, because they buy a lot of planes," he said. "I told him [the exemption] is something we're going to look at very seriously." This potential exemption highlights the complexities of international trade relations.
The direct impact on Australian exports remains unknown pending any potential exemption. Albanese stated that locally made steel accounts for approximately 1% of US steel imports, and aluminum accounts for 2%. "I put the case for why Australia should be exempt, and we agreed on the public wording that the US President agreed that an exemption was being considered and that that was in both of our nations' interests," Albanese said. This demonstrates the ongoing negotiations between the two countries.
Albanese indicated that he had discussed other potential areas of cooperation with the US, including Australia's supply of critical minerals. "Our steel is an important input into US manufacturing. BlueScope is the fifth largest steel manufacturer in the United States," he said. "They have invested $5 billion in many states in the United States. I think there are 30-odd different investments there. Of course, the major export is Colorbond for roofing and port areas in California on the West Coast. Our aluminum is a critical input into US manufacturing. Both our steel and aluminum are critical inputs into both of our nation's defense industries." He noted that Australia's trade surplus with the US dates back to President Harry Truman's administration from 1945 to 1953. "When the trade between our two nations was around about two-to-one." This historical context emphasizes the long-standing economic ties.
Trump has previously used tariffs to penalize countries he perceived as taking advantage of the US in trade. Albanese stated that the discussions were "positive and constructive," but he did not say whether he believed an exemption would ultimately be granted. "When you're dealing with the President of the United States, it's not appropriate to speak on his behalf," Albanese said. The two leaders also discussed the AUKUS alliance, which Albanese said has broad bipartisan support in both Australia and the US, but he again declined to elaborate on what he believed Trump's views were. "The relationship is a good one," he said. These comments suggest a cautious optimism regarding the outcome.
Opposition Leader Peter Dutton supported Albanese's efforts to secure a tariff exemption, stating that it was important for the US administration to understand that there was strong bipartisan support in Australia for this. "I want to send a very clear message to the Trump administration that we don't believe that this tariff should be imposed, and if it is, I think it will damage the relationship between the United States and Australia," he said. He did suggest that the federal government had made the relationship with the US "more difficult," citing US Ambassador and former Prime Minister Kevin Rudd's harsh comments about Trump. "I know that Donald Trump is hearing that message, and I don't think that's helpful to the dynamic in the relationship," he said. Nevertheless, he reiterated his strong support for Albanese's position. "I don't support tariffs in any circumstance unless there's a national security need," Dutton said. "I've been part of the Coalition government since the days of John Howard, and I'm a strong believer in free markets." He said he wanted Rudd to get "all the help" in advocating for a tariff exemption for Australia. This bipartisan support strengthens Australia's position in the negotiations.
Democratic Congressman Joe Courtney, an advocate for the AUKUS alliance and a member of the House Armed Services Committee, noted that Australia is a contributor to US economic and security. He pointed out that Australia had just made its first $798 million payment for nuclear-powered submarines under the AUKUS agreement. "The first check was delivered on Friday... and what do we see two days later?" Courtney said. "A 25% tariff on all steel products coming from Australia into the United States. What we're seeing is completely unnecessary and almost insulting to the people of Australia." This highlights the potential for the tariff to damage the relationship between the two countries, especially in light of recent security agreements.
