‘Entirely unjustified’: Albanese blasts Trump as tariffs smash into election frame

The prospect of a punishing series of new imposts on Australian exports to the United States could play havoc with Anthony Albanese’s re-election bid as debate over who can best handle the Trump administration emerges as a key campaign issue.

The US president’s decision not to grant Australia an exemption from 25 per cent tariffs on steel and aluminium before they came into effect on Wednesday afternoon (AEDT) left the government fuming.

Donald Trump and Anthony Albanese.Credit: Marija Ercegovac

In the prime minister’s most critical comments since Donald Trump’s return to office, Albanese accused the president of breaching the spirit of Australia’s friendship with the US.

Government sources said Australian officials presented a significant written proposal over the weekend to afford the US special access to Australia’s critical minerals reserves in exchange for a tariff exemption, but the offer failed to sway the Trump administration.

Opposition Leader Peter Dutton declared the imposition of the tariffs a “bad day for Australia” as he blasted the prime minister for failing to secure a second phone call with Trump as the tariff deadline approached.

As he confirmed that Trump had rebuffed his attempts to speak over recent days, Albanese said the decision not to grant Australia a tariff carve-out on $1 billion worth of exports was “entirely unjustified” and “very harsh”.

“This goes against the spirit of our two nations’ enduring friendship and is fundamentally at odds with the benefit of our economic partnership that has delivered over more than 70 years,” he said.

While he ruled out retaliatory tariffs against the US, Albanese called on Australians to buy local products, such as Bundaberg soft drinks rather than American-made beverages, and promised extra support in this month’s budget.

The government is now bracing for the possibility that Trump will hit Australian agricultural and pharmaceutical exporters with tariffs at the start of April, a date likely to coincide with the beginning of the federal election campaign.

A furious Industry Minister Ed Husic accused the US of “a dog act after over a century of friendship”, saying: “Australians have stood by, and stood with Americans for many decades. In fact, Australians have spilt blood alongside Americans in different conflicts.”

Trump’s tariff agenda roiled global sharemarkets as investors, increasingly worried about an American recession, sold off their holdings.

The ASX200 lost 1.3 per cent, or more than $37 billion, on Wednesday, leaving it at its lowest level in 100 days.

Asked why Trump had decided against an exemption, White House press secretary Karoline Leavitt said: “America first steel. If they want to move their steel manufacturers here, they’re welcome to do so.”

Labelling the tariff move as “not a friendly act”, Albanese said: “Quite clearly it is not a positive step in a relationship ... I think Australians will look at this decision and will be concerned that our friends in the United States have chosen to impose these tariffs on Australia, given that Australia does not impose tariffs on the United States.”

Trump said in a February 11 phone call with Albanese that he would consider a tariff exemption for Australia, but the prime minister was unable to get the president on the line for a follow-up discussion.

Albanese said the government had “put in a request for a conversation again to take place in recent days” and that he would continue to lobby for an exemption.

Asked whether he should have travelled to Washington to argue for a carve-out, Albanese pointed out that no nation had received an exemption, including those whose leaders had held White House meetings with Trump.

Signalling plans to shore up Australian industry, Albanese said the Buy Australia campaign would get additional support in the March 25 budget.

Dutton rubbished the government for failing to secure an exemption, saying: “We don’t believe that an outcome wasn’t possible – we negotiated an outcome with America when the Coalition was in government in 2018.

“This prime minister has failed because the president won’t take the call or grant a meeting with Anthony Albanese. It shows how incompetent and how hopeless this prime minister is.”

One of the affected Australian companies, BlueScope, issued a statement expressing disappointment that an exemption similar to that negotiated by the Turnbull government in 2018 had not been put in place.

“We are working closely with the Australian trade and diplomatic staff in Canberra and in Washington DC, and with a wide range of senior representatives in Congress to ensure the BlueScope investment proposition is fully understood,” a spokesperson said.

Foreign Minister Penny Wong blasted the tariffs as “unprovoked and unjustified”, arguing they were “not the way to treat a friend and partner”.

Credit: Matt Golding

Wong disputed the claim that Albanese did not make enough contact with Trump, saying: “The prime minister has had two calls with the president … we have been engaging at every level.”

Trump has threatened to impose tariffs on agricultural imports – which could hit Australian meat exporters hard – from April 2 as well as a 25 per cent tariff on pharmaceutical imports.

The US is Australia’s largest export market for beef and veal, worth $3.3 billion last year: three times as much as steel and aluminium. Australia exports about $1 billion worth of pharmaceutical products to the US each year.

Paul Farrow, the national secretary of the Australian Workers Union, which represents workers at aluminium smelters, said: “What the government must do is simple. Australian steel and Australian aluminium must be mandated for use in all Australian infrastructure and government buildings from this point onward.

“Australia’s purist free-market approach on procurement was naive a decade ago, sticking to it now would be sheer idiocy ... Australia is very good at making steel and aluminium. Trump knows it, and it’s about time we recognise it too.”

The European Commission said it would respond to the tariffs with countermeasures worth €26 billion ($45 billion), labelling Trump’s imposts unjustified.

Business Council of Australia chief executive Bran Black said: “Australia should adopt a cool-headed response to this news and keep making the case for our interests through continued extensive engagement with the US administration ... My primary concern is with the broader trade picture and the risk that lies ahead for our economy if a global contest of reciprocal tariffs were to escalate.”

ANZ economists Sophia Angala and Adelaide Timbrell said the direct effects of the tariffs were likely to be small, noting South Korea was Australia’s largest steel and aluminium market, accounting for 19.4 per cent of total exports of the metals.

But they warned that an escalation of trade tensions, including Trump’s plan for tariffs on more goods beginning next month, would be more challenging for the Australian and global economy.

“On the more extreme end, a trade war could lead to supply chain disruptions that increase the price of goods imports, negatively impacting domestic incomes and offsetting disinflation momentum,” they said.

Australia’s largest aluminium manufacturer, Capral, has been in business for 80 years producing extruded aluminium for construction and window frames. Chief executive Tony Dragicevich said imports already supply about 30 per cent of the local aluminium extrusion market, and he expects Trump’s tariffs will increase competition.

“There is no doubt that tariffs will have an impact on the international trade flows, and some of that product will need to find a new home,” Dragicevich said.

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