Prime Minister Albanese’s Discussion with President Trump
US President Donald Trump has agreed to give “great consideration” to an exemption from tariffs for Australian metal exports. This follows a conversation between Prime Minister Anthony Albanese and President Trump earlier this week.
Prime Minister Albanese described the call as “constructive and warm.” He presented his case for an exemption on the new 25 percent tariffs on steel and aluminium imports into the US. Both leaders reached an agreement to publicly state that the president acknowledged the exemption was “under consideration in the interest of both our countries.”
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However, during a later Oval Office press conference, President Trump initially ruled out any exemptions. He then clarified, stating that he had told Prime Minister Albanese that the issue would be given “great consideration.”
Figure 1: Anthony Albanese had a conversation with US President Donald Trump on Tuesday morning. (Credit: X/@anthonyalbanese)
President Trump’s Reaction and the Australia-US Trade Surplus
President Trump acknowledged Australia as one of the few nations with which the US maintains a trade surplus. He praised Australia, calling Albanese a “fine man” and mentioned the trade surplus as a key factor in reconsidering the tariffs. Trump said, “And I told him that that’s something that we’ll give great consideration to.”
The US President’s statements highlight Australia’s importance in the aluminium market. White House officials noted that Australian companies operate both in Australia and Canada. These companies have been hit hard by the new tariffs, adding pressure on the Trump administration to reconsider.
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Previous Tariff Exemption History
The issue of tariff exemptions for Australia is not new. During the previous Trump administration, Australia faced similar challenges. Former Prime Minister Malcolm Turnbull eventually secured an assurance that an Australian exemption would be considered four months after the tariffs were initially imposed. The exemptions were only secured a year after the tariffs were announced.
Prime Minister Albanese refrained from commenting further on the likelihood of the exemption being granted. He said, “The words that I’ve used are the words that I’ll stick to.” Albanese stressed that it was inappropriate to speak on behalf of President Trump.
The Impact of the US Tariffs
The new executive order signed by President Trump on Tuesday imposes a 25 percent tariff on all steel and aluminium imports. These tariffs are set to take effect from March 12. The order justifies the tariffs as a response to previous trade deals that were deemed detrimental to US steel production and national security.
Australia’s metal exports to the US have been significant. In 2023, Australia exported 223,000 tonnes of steel and 83,000 tonnes of aluminium, valued at US$237 million (AU$377 million). The introduction of these tariffs threatens Australia’s export market and risks damaging the long-standing relationship between the two allies.
Opposition Leaders Call for Action
Opposition Leader Peter Dutton has called for a clear message to be sent to the Trump administration. Dutton stated, “What’s important now is that the Trump Administration hears there is a bipartisan position in Australia to stand up for our national interest.” He emphasized that Australia’s national interest would be best served if the tariffs were removed.
Dutton also expressed his support for Prime Minister Albanese, stating that the PM deserved full backing in efforts to secure the exemption. “My job is to stand up for our national interest and it is in our national interest for the tariff to be removed,” Dutton said.
Australia-US Relations Moving Forward
Prime Minister Albanese has expressed his commitment to working closely with President Trump. He highlighted the importance of the Australia-US alliance in advancing both countries’ interests. In a statement, Albanese said, “For decades, the Alliance between the United States and Australia has served the interests of both our nations, and supported peace, stability and growth in our region.”
Albanese also stated that he looked forward to further cooperation with President Trump to create jobs and deliver mutual benefits. “I look forward to working closely with President Trump to create jobs and deliver benefits for both our nations.”
The Broader Impact of Tariffs
While Australia awaits the US decision on tariffs, the broader economic implications of the tariffs remain significant. The US imports steel from various countries, with Canada, Brazil, and Mexico being the largest suppliers. South Korea and Vietnam also rank highly in US steel imports.
The introduction of these tariffs will likely raise the price of goods such as cars, construction materials, and appliances in the US. These tariffs are expected to protect US steel producers but could lead to higher costs for American consumers.
In addition to the economic impact, the tariffs could strain diplomatic relations between the US and its allies, particularly Australia, which relies on steel and aluminium exports to the US. Both countries face a crucial decision in how to navigate this issue, and Prime Minister Albanese’s efforts will determine the future of Australia-US trade relations.
The Economic Implications for US Manufacturers
The tariff will not only affect international suppliers but also US manufacturers. Companies like John Deere, Caterpillar, and Boeing rely heavily on imported steel and aluminium. Increased material costs will raise the prices of their products. Additionally, domestic industries that use steel and aluminium, such as automakers and construction firms, could face higher expenses, potentially leading to job losses in the long term.
Economists suggest that the tariff’s long-term impact may not be entirely positive for US manufacturing. A 2018 study revealed that although steel tariffs created jobs in the steel industry, the broader US economy suffered. The study found that the cost of the tariff outweighed the benefits, with domestic industries paying billions more for raw materials.
A Year of Uncertainty
In 2018, it took former Australian Prime Minister Malcolm Turnbull nearly a year to secure an exemption from Trump’s tariffs. The exemption came after months of negotiations. Albanese is hopeful but cautious, and when asked whether he was confident that an exemption would be granted, he responded, “The words that I’ve used are the words that I’ll stick to.”
A Focus on Continued Alliance
Despite the challenges presented by the tariff, both leaders have expressed their commitment to continuing the strong alliance between Australia and the United States. In a statement, Albanese noted, “For decades, the Alliance between the United States and Australia has served the interests of both our nations, and supported peace, stability and growth in our region.” He added that he looked forward to working closely with Trump to create jobs and economic benefits for both nations.
Conclusion
The issue of US tariffs on Australian metal exports remains a contentious topic. While President Trump has pledged to consider an exemption, the outcome is still uncertain. Prime Minister Albanese continues to advocate for the interests of Australia, hoping that the long-standing alliance between the two nations will ensure a favourable resolution.
