Australia’s exemption from Trump steel tariff is temporary, with quotas to come

Donald Trump could yet impose import quotas on Australian steel and aluminium after it emerged the tariff exemption he granted Malcolm Turnbull would now have a deadline of 1 May.

The Australian government has responded by declaring its deal with the US was “unconditional” and claiming the deadline was directed at negotiations with other nations for a more long-term rebalancing of trade.

The White House on Friday confirmed Australia, Europe, South Korea, Canada, Mexico, Argentina and Brazil would initially escape America’s 25% steel and 10% aluminium tariffs.

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However, the exemption would last only until 1 May “pending discussions of satisfactory long-term alternative means to address the threatened impairment to US national security”.

“By May 1, 2018, the president will decide whether to continue to exempt these countries from the tariffs, based on the status of the discussions,” the White House said.

Trade minister Steven Ciobo said the agreement between Trump and Turnbull to exempt Australian steel “was unconditional”. “As the United States has acknowledged, the US could not have a fairer trade relationship than it does with Australia,” he said.

Before the announcement Turnbull said the threatened tariffs against China and others were the “beginning of a negotiation” between the US and the rest of the world.

“[Trump’s] contention is that trade should be fair and reciprocal, we understand that, that’s the reason why Australians has been exempted from the steel tariff,” he said. “As Donald Trump said, trade between Australia and the US is fair and reciprocal, there’s zero tariffs on US imports into Australia, a very close security relationship, the Americans actually have a trade surplus with Australia.”

US trade representative Robert Lighthizer and Trump’s policy adviser Peter Navarro will closely monitor imports of steel and aluminium from Australia and other exempted countries.

Navarro has appeared to harden the White House’s position, telling CNN the exempted nations would be saddled with steel and aluminium quotas to prevent non-exempted nations attempting to find backdoor entry points to America. “This is an important thing,” Navarro said. “Every country that is not facing tariffs that we are going to negotiate with will face quotas so that we protect our aluminum and steel industries.

“For all countries there has to be a quota. If you don’t put a quota on then any country that can do whatever they want will become a trans-shipment point for any other country.” He did not specify the size of the quota.

Australia’s peak body representing the steel industry said it was too early to tell what the impact would be.

“I don’t think, until the details come out, that we really know what the implications [are],” Steel Institute chief executive Tony Dixon said on Friday.

The announcement came as Trump heightened fears of a US-China trade war by also announcing plans to hit Chinese goods with $US60bn in tariffs.

“The important thing is, no one wins from a trade war,” he said. “We look forward to the US and China being able to negotiate a satisfactory arrangement that suits both sides.”

Labor frontbencher Richard Marles said it was “bad news for the global economy”.

“It is obviously therefore bad news for us. We have to be doing everything we can to try and advocate to the US not to walk down a path of increasing tariff barriers around this economy,” he told Sky News.