Australia Scrambles for Exemption as $900 Million in Steel, Aluminium Face Trump Tariffs

Molten steel is made in the BOS, slab caster and steel treatment factory at BlueScope Steelworks in Port Kembla, Wollongong in New South Wales of Australia on Feb. 9, 2024. AAP Image/Dean Lewins

Australian leaders are considering their next steps after U.S. President Donald Trump announced sweeping 25 percent tariffs on steel and aluminium imports, set to impact hundreds of millions of Aussie goods.

Trump confirmed the new duties would apply to all steel and aluminium imports.

The countries likely to feel the largest impact are top exporters (for steel): Canada, Brazil, Mexico, South Korea, and Japan (pdf), and (for aluminium) Canada, China, Mexico, United Arab Emirates, India, and Bahrain.

“Any steel coming into the United States is going to have a 25 percent tariff,” Trump told reporters.

According to United Nations COMTRADE data, Australian iron and steel exports to the United States are valued at approximately $378 million (US$237 million), while aluminium exports are worth around $503 million.

Shares in one of Australia’s largest steelmakers, BlueScope, actually rose in response to the news. The company has major operations in the United States.

President Donald Trump speaks to reporters aboard Air Force One where Trump signed a proclamation declaring Feb. 9 "the first ever Gulf of America Day," as he travels from West Palm Beach, Fla. to New Orleans, Sunday, Feb. 9, 2025. AP Photo/Ben Curtis

Australia Pushing for Tariff Exemption

The Australian government is actively lobbying for an exemption from the tariffs, as it successfully did during Trump’s first term.

Trade Minister Don Farrell has been leading efforts to persuade U.S. officials to reconsider, arguing that the tariffs are unjustified given the United States’ trade surplus with Australia.

“The U.S. is Australia’s largest economic partner, with $1.17 trillion of inward foreign investment,” Farrell told Sky News.

He also noted that Australia is a key strategic ally of the United States, particularly under the AUKUS trilateral security pact, with Australia on the weekend investing US$500 million into the U.S. submarine industry.

Defence Minister Richard Marles recently travelled to engage with Secretary for Defense Pete Hegseth.

U.S. Secretary of Defense Pete Hegseth (R) and Australian Deputy Prime Minister and Defense Minister Richard Marles (L) participate in a bilateral meeting at the Pentagon in Arlington, Virginia on Feb. 7, 2025. Alex Wong/Getty Images

Meanwhile, Farrell acknowledged that discussions had been complicated by the fact that Trump’s trade representative has yet to be confirmed.

“We’ve indicated we are very keen to talk,” Farrell said, confirming that he had reached out to Howard Lutnick, Trump’s nominee for Commerce Secretary.

“Until you get approved by the Senate, you’re not in a position to discuss with other countries, but we’ve made it clear that we want to engage as soon as possible.”

The opposition trade spokesman Kevin Hogan said Labor needed to ramp up its diplomatic efforts.

“We had Ambassador [Joe] Hockey who helped Australia to successfully negotiate exemptions from United States steel and aluminium tariffs,” he said.

“The Ambassador to the U.S. is one of the most critical diplomatic roles Australia has. Albanese hand-picked Kevin Rudd for this position. Albanese and Rudd have a big job to do here.”

Albanese Government Backs Aluminium Industry

The tariffs come at a critical time for Australia’s aluminium sector, which in 2024 exported $5.2 billion worth of aluminium and employed over 17,000 people.

In response to growing uncertainty, Prime Minister Anthony Albanese recently announced an additional $2 billion in support for the industry, aiming to strengthen its competitiveness.

“This investment will help Australia lead in the metals industry,” Albanese said at the time. Aluminium is Australia’s fourth-largest raw material export, with key markets in South Korea, Japan, and the U.S., its third-largest buyer.

Farrell remains optimistic that Australia can secure an exemption, arguing that tariffs on Australian exports make little economic sense.

“Since Donald Trump was first elected, trade from America to Australia has doubled. Without tariffs, the Americans have done very well in terms of their trading relationship with Australia.”