Labor backs Coalition on ‘trade war’ as steel industry pushes anti-dumping measures

The steel industry has pointed to Australia’s existing anti-dumping measures as a way to combat the fallout from Donald Trump’s proposed tariffs on steel and aluminium imports, while the Coalition and Labor have raised the prospect of direct trade retaliation.

Despite frantic diplomatic efforts to achieve an exemption from the controversial plan to impose tariffs of 25% on steel imports and 10% on imported aluminium, the Turnbull government is increasingly concerned that Australian exports will be hit.

The Turnbull government is still awaiting details of the Trump administration’s controversial plan – announced last week – despite apparently saying last year that Australia would be exempt from such a plan.

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The trade minister, Steve Ciobo, warned last week that the tariffs could spark a trade war and lead to global recession, and said Australia reserved the right to doing anything necessary to protect the national interest.

The shadow treasurer, Chris Bowen, backed Ciobo on Monday, saying that Labor would support the government if it wanted to pursue retaliatory measures to protect Australia in the event of a trade war.

“I think that we should look at all options … in the national interest,” Bowen told ABC radio. “The government would have the full support of the Labor party for anything it does to convince the United States, and if that’s not successful then obviously the government would be within its right to consider what comes next.

“Obviously this is the time for cool heads but it is also a time for governments around the world – and alternative governments – to point to dangers of this sort of protectionism and the benefits of trade.”

Bowen said Trump’s tariffs risked affecting $240m worth of steel and $70m worth of aluminium Australia exports to the United States, and it could provoke a retaliatory trade war. He said even if Australia got some kind of exemption, there would still be other countries affected by the tariffs that may want to dump their product into Australia, which would damage Australian industry.

“So this is lose, lose, lose,” he said. “The government would have the full support of the Labor party for anything that they can do to try to get sense to prevail in the United States.”

Australia’s steel industry is urging calm, saying the details of Trump’s tariffs were yet to be seen. It said Australia did not know which steel and aluminium products would be affected yet, and there was a diverse list of potential items that could be affected, from aluminium lolly wrappers to sheets of steel.

The chief executive of the Australian Steel Institute, Tony Dixon, said it was too early to say how the government should respond because the details were unknown. But he also said Australia’s domestic market ought to be protected, and there were “ways to manage that” by using World Trade Organisation provisions for anti-dumping legislation.

“We need to wait until the air clears a little bit, with more information coming out of the minister’s office or from the Department of Trade, hopefully over the next week,” Dixon told Guardian Australia. “We would hope at the end of the day for a bipartisan response … a cool and sensible response. It’s not going to be in the best interests of anyone to begin a trade war.”

His view was supported by the CEO of the Australian Steel Association, David Birrell, who said Australia was a proponent of free and open trade but it also had “significant trade remedy measures” available through the Anti-Dumping Commission.

“The fundamental issue here is if you apply tariffs to manufacturing inputs, all you do is make manufacturing costs higher,” he said. “We are believers in free trade and any increase in input costs [from tariffs] works against WTO principles.”

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On Monday, the ABC reported that Trump had “emphatically promised” to exempt Australian steel and aluminium products from any tariffs when he met with Turnbull mid-way through last year, and the promise was witnessed by the US treasury secretary, Steven Mnuchin, the US commerce secretary, Wilbur Ross, the White House chief economics adviser, Gary Cohn, Australia’s finance minister, Mathias Cormann, and Australia’s deputy secretary of the department of prime minister and cabinet, David Gruen.

After that meeting last year, Cormann said Australian officials had impressed upon Trump the importance of exempting Australia from any tariffs, and Trump had understood.

Ciobo is on his way to Chile to sign the renegotiated 11-country Trans-Pacific Partnership on Thursday and his office told Guardian Australia that it had no update on Trump’s plan.

“An announcement from the Trump administration that ensures Australia’s steel and aluminium exports to the United States can continue unaffected would be welcome and good for Australian and American jobs,” Ciobo said. “However, at this stage, Australia, like the rest of the world, is awaiting clarity to see how we will be affected.”