Australia will not retaliate if the US moves ahead with trade tariffs on steel and aluminium

The Labor government has revealed how it will respond to America if Australia is unsuccessful in securing an exception from US President Donald Trump’s new tariffs.

Australia will not retaliate if the US follows through with trade tariffs on steel and aluminium, as Labor warns tit-for-tat trade wars will only deepen economic pain.

Accusations launched by one of Donald Trump’s top trade advisers that Australia has crushed America’s aluminium industry have heightened fears the US President will reject Prime Minister Anthony Albanese’s request for an exemption from his new tariffs.

But even if Australia is unsuccessful in securing a carve out, Industry and Science Minister Ed Husic said the federal government was not contemplating following other countries like Canada and China in announcing retaliatory trade restrictions on US goods.

“If we start down this path, it would take years - if not decades - to unpick,” he said.

“There are only a couple of places in the world that make aluminium - Australia is one.

“A country that is a strong ally, that has a strong relationship with the US and that is right across from the Pacific and has been providing product that has been in high demand on the west coast - there’s a whole lot of compelling reasons why we can work closer together without the imposition of tariffs.”

Donald Trump’s senior counsellor for trade Peter Navarro watches as the President announces his new metal tariffs. Picture: AFP

Mr Trump has pledged to consider Mr Albanese’s request that Australia be exempted from the 25 per cent tariffs on aluminium and steel due to take effect next month on the basis there is an overall trade “surplus” between the two countries that advantages the US.

But Mr Trump’s senior counsellor for trade Peter Navarro has suggested he would fight against a carve-out as he targeted Australian a media blitz.

“Australia is crushing, just crushing – with the help of China – our aluminium sector,” he told Fox News, claiming companies had “abused” their right to export to the US in recent years.

“The President says no more country exemptions, no more product exclusions … Off we’re going to run into a beautiful golden age.”

Senior Counselor for Trade & Manufacturing Peter Navarro: "Our aluminum industry is on its back. It's a 50% capacity utilization rate; in Australia, it's 90%! We can't afford NOT to have strong aluminum and steel industries." pic.twitter.com/w7JXlR9eXm

— Rapid Response 47 (@RapidResponse47) February 11, 2025

In a separate interview on CNN, Mr Navarro similarly attacked Australia for “killing our aluminium market”, blaming companies he said were partially owned by China.

“Our aluminium industry is on its back,” Mr Navarro said.

“It’s a 50 per cent capacity utilisation rate. In Australia, it’s 90 per cent. And we can’t afford not to have strong aluminium and steel industries.”

But Australia’s aluminium and steel exports to the US declined last year compared to 2023 and are expected to remain lower as many businesses have diversified by exporting more to Asia.

From January to November last year Australian aluminium exports totalled $365 million, down from $474m the previous year, while steel exports were $359m in 2024 down from $407m.

Prime Minister Anthony Albanese holds a press conference at Parliament House in Canberra after speaking to Donald Trump. Picture: NewsWire

“Our aluminium industry is on its back,” Mr Navarro said.

“It’s a 50 per cent capacity utilisation rate. In Australia, it’s 90 per cent. And we can’t afford not to have strong aluminium and steel industries.”

When Mr Trump imposed steel and aluminium tariffs during his first term in 2018, then-Prime Minister Malcolm Turnbull negotiated an exemption for Australian exports to the US.

A year later, in response to an increase in Australian aluminium sold into the American market, Mr Navarro lobbied internally to impose tariffs on Australia.

TREASURER REACTS TO US CLAIMS

Jim Chalmers earlier said he was not aware of the “verbal commitment” Australia allegedly violated with the US to voluntarily limit aluminium exports.

When asked on Wednesday if Australia had broken any agreement, the Treasurer said: “Not that I’m aware of.”

“I’ve obviously seen the reports out of DC,” Mr Chalmers told Seven’s Sunrise.

“This happened under a previous Coalition government.

“They may be able to provide a bit more colour and context around some of these sorts of claims.

“No doubt we’ll be able to find a way … to get to the bottom of what’s happened there.”

Mr Chalmers pointed out the negotiations Mr Trump mentioned took place “almost a decade ago”, when Malcolm Turnbull was Australia’s prime minister during Mr Trump’s first administration.

But Mr Turnbull has rejected the claim, saying steel was the focus of negotiations at the time.

Treasurer Jim Chalmers says he is not aware Australia has broken any export agreements with the US. Picture: NewsWire / Martin Ollman

Despite the uncertainty sparked by Mr Trump’s order, Mr Chalmers said the conversation between Prime Minister Anthony Albanese and the US President on Tuesday was “very, very positive”.

“The conversation that happened yesterday was very productive, very positive,” Mr Chalmers said.

“Prime Minister Albanese made the case for our steel and aluminium exporters standing up for our national economic interest, and for Australian jobs.

“I think it’s a good thing that President Trump said he would be willing to consider that exemption.

“We obviously don’t take any outcome for granted, but I think yesterday’s conversation between the two leaders was a positive step.”

The opposition has backed the Albanese government, with Peter Dutton saying the imposts would “damage the relationship between the United States and Australia”.

Originally published as Australia will not retaliate if the US moves ahead with trade tariffs on steel and aluminium