Trump is now flagging tariffs on steel and aluminium. Can Albanese win an exemption for Australia?

The Albanese government is set to mount a major effort to win an exemption from a proposed 25% tariff on steel and aluminium imports to the United States foreshadowed by President Donald Trump.

Assuming Trump follows through on the move, it will put major pressure on the prime minister to match the success of the Turnbull government in 2018, after Trump put a 25% tariff on steel and a 10% tariff on aluminium in his first administration.

Anthony Albanese told the House of Representatives he had a discussion scheduled with President Trump and promised to keep parliament updated. “We will continue to engage diplomatically with the United States – not with loud hailers but diplomatically.”

Speaking to reporters travelling on Air Force One, Trump flagged he would make the tariff announcement on Monday (Washington time). He said the tariffs would start “almost immedciately” on all foreign steel and aluminium imports.

The Australian government on Monday was scrambling to put together its response, although government sources insisted it was not surprised and was well prepared. Cabinet discussed the Trump comments at its meeting on Monday morning.

Trade Minister Don Farrell said on Monday:

We have consistently made the case for free and fair trade, including access into the US market for Australian steel and aluminium.

Our bilateral economic relationship is mutually beneficial – Australian steel and aluminium is creating thousands of good paying American jobs, and are key for our shared defence interests too.

Sources said the government had been making representations on steel and aluminium for months.

Last week, Farrell said he was seeking talks with incoming US Commerce Secretary Howard Lutnick, but that would have to wait until he was confirmed.

In the lobbying for special treatment, the government will stress that the US has a trade surplus with Australia.

In 2023-24, the US imported about 240,000 tonnes of steel products from Australia, valued at US$250 million (A$400 million).

US imports of Australian aluminium peaked in 2019 at about 270,000 tonnes and declined to around 83,000 in 2024. The three-year average imports from Australia were 167,000 tonnes per year, valued at US$496 million (A$791 million).

Nationals leader David Littleproud said the issue was a test for Albanese and Australia’s ambassador to the US, Kevin Rudd.

Littleproud said:

When you make disparaging comments about leaders in other parts of the world sometimes it comes back to bite you.

And unfortunately it could be the Australian economy that gets the bite.

This is a test to see whether Anthony Albanese’s previous remarks and Kevin Rudd’s previous remarks about President Trump has done this nation harm.

Littleproud said if Rudd was “not the right person to have these discussions, then we should be mature enough as a country to send someone who can have those discussions to get that carveout”.

Deputy Prime Minister Richard Marles has just returned from Washington.

At a news conference there, he was asked whether Australia was concerned about direct reciprocal tariffs or a flow-on effect from them.

(The question was in the context of Trump’s talks with the Japanese Prime Minster. Australia does not imposes tariffs on US goods.)

Marles said:

We obviously are engaging with the United States in respect of our bilateral relationship in respect to tariffs.

We’ll obviously press Australia’s interest in our case in respect of that. But none of this is a surprise. We know what President Trump’s platform was as he went into the American election.

He’s been very clear about his policy direction. And so I think we all understand that is going to see changes in American policy in relation to this. From an Australian point of view, we will continue to press the Australian case around the question of trade.

The chief executive of the Australian Industry Group, Innes Willox, said “pollyannaish hopes that we would fly under the radar have proven to be sadly misplaced.

"That this advice has been given the day after our deputy prime minister was in Washington to hand over billions of dollars to secure the AUKUS submarine deal is particularly troubling.”