The verdict is in.
Australia will not be granted an exemption from the 25 percent tariffs on aluminium and steel imports imposed by the United States, the White House has confirmed.
Despite former U.S. President Donald Trump saying his administration would seriously consider excluding Australia from the levies, White House spokeswoman Karoline Leavitt revealed no exemption would be made.
“He considered it, and considered against it. There will be no exemptions,” she told the ABC.
Pressed on the reasoning, Leavitt responded, “America First steel.”
She added, “If they want to be exempted, they should consider moving steel manufacturing here.”
The decision means approximately $1 billion worth of Australian steel and aluminium exports to the United States will now be subject to the full 25 percent tariff.
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.
However, that still amounts to only 1 percent of steel imports, and 2 percent of aluminium.
Further, Australia’s largest steel manufacturer, BlueScope, largely circumvented the last set of tariffs during the first Trump administration by investing in production facilities in the United States.
Initial Response
Deputy Prime Minister Richard Marles described the decision as an act of “economic self-harm” and expressed disappointment.Speaking to 2GB radio, Marles said, “Obviously, it’s really disappointing news. Tariffs don’t make any sense. It’s an act of kind of economic self-harm.”
Marles acknowledged that Australia had diversified its trade partnerships and would find alternative markets for its steel and aluminium, but reiterated that the government would continue pushing for an exemption.
He also pointed out that during Trump’s first term, former Prime Minister Malcolm Turnbull had successfully negotiated an exemption after months of lobbying.
“So we’ll keep pressing the case,” Marles added.
Housing Minister Clare O’Neil also insisted that the Australian government was still actively working to overturn the decision.
“We’re still in a discussion with the U.S. government about this,” she told Channel Seven.
“So I’m not going to accept this as the situation yet. We still have a little bit of time and lots of discussions continuing to happen.”
Pressure on Albanese Government
Politically, the rejection of an exemption has put pressure on the Albanese Labor government, which had been lobbying for an exemption, citing the close U.S.-Australia ties, and the fact that the United States actually has a trade surplus with Australia.Hopes for an exemption were initially raised when Trump assured Prime Minister Anthony Albanese that Australia would receive “great consideration” following a cordial phone conversation.
Former Commerce Secretary Wilbur Ross couched those remarks, noting any trade advantage to Australia was largely due to its production of “green steel,” which the United States was not fully capable of yet.
US Trade Adviser Stands by His Position
Navarro stood by his earlier position on Australia allegedly misusing its past exemption—a claim the Australian government vehemently denies.“There were many country exemptions given, not just to Australia but to many other countries, and every single country abused those exemptions,” he told ABC on March 12.
“The collective result was to weaken the tariffs to the point that they simply didn’t provide any protection anymore.”
He reinforced that the administration’s new policy was “no exemptions, no exclusions” unless Trump decided otherwise.
“It’s because when we were kind enough as a country to make those kinds of gestures to our friends, they bit the hand that fed them, and that’s not going to happen again,” Navarro said.
Opposition Hones in on Albanese Government’s Approach
Meanwhile, Opposition Leader Peter Dutton said there was a “bipartisan position in relation to tariffs,” but still criticised the Albanese government for its approach.He accused them of being “scared” of Trump and failing to “pick up the phone.”
Deputy Opposition Leader Sussan Ley put the blame squarely on the prime minister for not building a “personal relationship” with Trump.
“The prime minister is to blame for not doing every single thing that he could have done,” she told Sky News.
She said that when Turnbull secured an exemption, “We did have that personal relationship, we did have those face-to-face meetings, and we did secure the exemption that was in our country’s interests.”
Analyst Says Tariffs Just Part of the Process, Not the End Result
Graham Young, head of the Australian Institute for Progress, said the tariffs needed to be understood as a negotiating tactic, and not the end result.“We don’t know what the Albanese government was offering, but like Ukraine, we have substantial rare earth deposits—perhaps there is a trade to be done there,” he told The Epoch Times.
“Certainly the next federal budget needs to realistically lift defence spending to 3 percent in the near term, not beyond the forward estimates.”
Young noted the Trump administration was positioning itself to deal with the Chinese Communist Party.
“The Australian government also needs to be ruthless in its diplomacy, which should include recalling Kevin Rudd as ambassador.
“It would be foolish for Australia to apply reciprocal tariffs. We are a small trade-exposed economy where 46 percent of our GDP is exports and imports whereas the U.S. is the largest economy in the world and has a much smaller trade exposure with only 25 percent of its GDP involved in trade.”
