Donald Trump says he’s working on deal with Australia for tariff exemption

Australia appears to have won a reprieve from the United States’s global steel and aluminium tariffs, after the US president, Donald Trump, confirmed that he and Malcolm Turnbull were working on a security agreement for exemptions.

In a post on Twitter, Trump said he was negotiating directly with the Australian prime minister.

“Spoke to PM of Australia. He is committed to having a very fair and reciprocal military and trade relationship. Working very quickly on a security agreement so we don’t have to impose steel or aluminum (sic) tariffs on our ally, the great nation of Australia!,” Trump wrote.

Turnbull replied, also on Twitter, and using the US president’s trademark exclamatory punctuation:

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“Great discussion today on security and trade. Australia/US trade is fair & reciprocal & each of our nations has no closer ally. Thank you for confirming new tariffs won’t have to be imposed on Australian steel & aluminium – good for jobs in Australia and in US!”

The tarrifs – 25% on foreign steel and 10% on foreign aluminium – are set to come into force in a fortnight.

Trade tariffs were a campaign pledge from Trump, but Australia, as a close ally of the US, had been confident its imports would not attract the charges.

Trump announced the tariffs – which he argues are designed to “defend the American worker” but which are widely seen as targeting China – at a news conference on Thursday.

The Australian government, which believed it had previously been promised an exemption, has been working furiously behind the scenes to win similar exemptions to those granted to Mexico and Canada.

The tweet is the second time Trump has singled out Australia for a possible exemption.

Donald J. Trump (@realDonaldTrump)

Spoke to PM @TurnbullMalcolm of Australia. He is committed to having a very fair and reciprocal military and trade relationship. Working very quickly on a security agreement so we don’t have to impose steel or aluminum tariffs on our ally, the great nation of Australia!

March 9, 2018

Malcolm Turnbull (@TurnbullMalcolm)

Great discussion today on security and trade. Australia/US trade is fair & reciprocal & each of our nations has no closer ally. Thank you for confirming new tariffs won’t have to be imposed on Australian steel & aluminium – good for jobs in Australia and in US! https://t.co/9ZKMw5n1dZ

March 9, 2018

But Australian Industry Group chief executive Innes Willox said the tariff announcement would still hurt companies even if an exemption was granted.

“While we hope that Australia will win exemptions from the latest steel and aluminium tariffs, this would be only a partial victory,” Willox said on Friday.

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He said any special treatment afforded to Australia would only apply to shipments coming out of the country, and not to those from Australian companies in third markets.

“As a country with a high reliance on trade, the risks of broader damage to the global economy from a trade war are great,” Willox said.

The former prime minister Kevin Rudd said on Saturday that even if Australia secured an exemption, a global tit-for-tat was a concern, and he disagreed with Trump’s belief that trade wars were good.

“History tells us they are bad, and they end up causing not just a contraction in the global trade but, as a result of that, a contraction in global growth,” he told the ABC.