The United States has imposed a 25% tariff on all steel and aluminium imports, affecting Australian exporters. The decision, announced by the Trump administration, denies Australia an exemption despite diplomatic efforts. The tariffs will take effect from midnight US time on Wednesday.
Albanese Calls Decision ‘Unjustified’ and ‘Not a Friendly Act’
Prime Minister Anthony Albanese has strongly criticised the move, labelling it “entirely unjustified” and “not a friendly act.” Speaking in Sydney, he said the tariffs contradict the long-standing economic partnership between Australia and the US.
“This is against the spirit of our two nations’ enduring friendship and fundamentally at odds with the benefit of our economic partnership that has delivered over more than 70 years,” Albanese said.
Figure 1: Australian prime minister Anthony Albanese says Donald Trump’s decision to slap tariffs on Australian steel and aluminium was ‘disappointing’. [AFP/Getty Images/AAP]
He confirmed that Australia would continue seeking an exemption.
Trump Administration Rejects Exemption Plea
The White House press secretary, Karoline Leavitt, confirmed that no country would receive an exemption.
“[Trump] considered it and considered against it. There will be no exemptions,” Leavitt told Australian media.
The deputy press secretary, Kush Desai, reiterated that the tariff regime would apply universally.
Failed Lobbying Efforts for Australian Exemption
Australian officials had engaged in weeks of lobbying in Washington following Trump’s tariff announcement. Treasurer Jim Chalmers, Trade Minister Don Farrell, and Ambassador Kevin Rudd led efforts to secure an exemption.
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Albanese stated that Australia had proposed “a range of propositions” to the US, but these were unsuccessful. He did not elaborate on specific offers.
Australia Will Not Impose Reciprocal Tariffs
The federal government has ruled out imposing retaliatory tariffs on US imports. Albanese stated that such actions would harm Australian consumers.
“Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. They are paid by the consumers,” he said.
Instead, the upcoming federal budget will include funding for a “Buy Australian” campaign to promote local products.
Australian Business Groups Express Concern
Industry groups have raised concerns about the impact on local steel and aluminium exporters. The Australian Chamber of Commerce and Industry warned that the tariffs could affect jobs and economic growth.
Figure 2: The Business Council of Australia (BCA) described the decision as expected but disappointing.
“It’s important to remember that it took eight months for the Australian government to secure tariff exemptions under the last Trump administration – what this tells us is that these discussions are complex and that patience and persistence are key,” BCA chief executive Bran Black said.
Trump Defends Tariffs as Economic Policy
Trump has defended the tariffs as part of his broader trade policy. He argued that the measures would strengthen the US economy.
“We’re going to take in hundreds of billions of dollars in tariffs, and we’re going to become so rich, you’re not going to know where to spend all that money,” he said.
He also warned that tariffs on Canadian steel and aluminium would increase to 50%, escalating trade tensions with the US’s northern neighbour.
Australia’s Trade Surplus Undermined Exemption Bid
Australia’s push for an exemption faced challenges due to shifting trade figures. In January 2025, Australia recorded a trade surplus with the US for the first time in recorded history.
The Australian Bureau of Statistics reported that Australia shipped US$2.9 billion worth of gold to the US in January. The surge in gold exports was driven by investor fears over an uncertain trade environment.
Former Prime Minister Malcolm Turnbull, who secured a tariff exemption in 2018, had warned that Trump regretted previous concessions and was unlikely to grant another reprieve.
Global Trade War Intensifies
The tariff decision is part of broader global trade tensions. Trump has announced plans for further tariffs on pharmaceuticals and agricultural products. These measures could have a greater impact on Australian exporters.
US stocks experienced their worst day of the year on Monday, with fears of an economic downturn growing.
Asked about the possibility of a recession, Trump said, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”
Australia to Continue Pushing for Exemption
Albanese confirmed that discussions with the US administration would continue. He noted that it took months for Australia to secure an exemption in 2018.
“Our government will continue to put forward a very strong case for an exemption, noting that the last time this occurred it took months for that exemption to be granted … Australia will work hard for a different outcome and discussions with the Trump administration are ongoing,” he said.
Despite the setback, the Australian government remains committed to securing relief from the tariffs.
