Donald Trump grants temporary extension on steel tariffs for Australia

Washington: President Donald Trump has postponed a decision on imposing steel and aluminium tariffs on Canada, the European Union and Mexico until June 1, and has reached an agreement in principle with Argentina, Australia and Brazil, a source familiar with the decision said on Monday.

Trump imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum in March but granted temporary exemptions to Canada, Mexico, Brazil, the European Union, Australia and Argentina.

US President Donald TrumpCredit: AP

The temporary exemptions were due to expire at 12.01am on Tuesday (2pm AEST).

"The administration has reached agreements in principle with Argentina, Australia, and Brazil, details of which will be finalised in the next 30 days. The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days," the source said on Monday.

Trump also granted a permanent exemption on steel tariffs to South Korea. Trump administration officials have said that in lieu of tariffs, steel and aluminum exporting countries would have to agree to quotas designed to achieve similar protections for US producers.

South Korea's permanent exemption is in exchange for having agreed to cut its steel exports to the US by about 30 per cent.

Canadian Prime Minister Justin Trudeau said on Monday that any move by the US to impose tariffs on Canadian steel and aluminum would be a "very bad idea" guaranteed to disrupt trade between the two countries.

Trump has invoked a 1962 trade law to erect protections for US steel and aluminum producers on national security grounds amid a worldwide glut of both metals that is largely blamed on excess production in China.

If the EU is subject to tariffs on the 6.4 billion euros ($A10.3 billion) of the metals it exports annually to the US, it has said it will set its own duties on 2.8 billion euros of US exports of products ranging from makeup to motorcycles.

Reuters