Donald Trump hints at tariff deal with ‘real friend’ Australia

The Turnbull government has been given two weeks to convince Donald Trump why “real friend’’ Australia should be exempted from his tariff regime.

Australia could be exempted from Donald Trump’s sweeping steel and aluminium tariffs under direction by the President as he looks at who is treating the United States “fairly” over the next fortnight.

The US President has signed a final plan this morning at the White House to impose tariffs of 25 per cent on steel imports and 10 per cent on aluminium which will take effect in 15 days.

Any country that has a security relationship with the US, such as Australia, will be invited to discuss concerns about global excess capacity. He did not name Australia as being exempt but said earlier in the day Australia was an example of a country that may be exempted because it was such as close ally.

“We have a very close relationship with Australia, we have a trade surplus with Australia, great country long term partner we’ll be doing something with them,’ Mr Trump said at a Cabinet meeting.

Surrounded by steel and aluminium workers in the White House, Mr Trump said his administration would be “flexible” with the tariffs and look at America’s military and trade relationships with other countries to decide who should or should not be excluded.

US trade envoy Robert Lighthizer will be in charge of negotiating with countries that want to be exempted from the tariffs or “seek an alternative”. “Some of the countries we’re dealing with are great partners, great military allies and we’re going to be looking at that very strongly,” Mr Trump said.

“The tariffs don’t go effective for at least another 15 days and we’re going to see who’s treating us fairly, who’s not treating us fairly. Part of that is going to be military, who’s paying the bills, who’s not paying the bills. We subsidise many rich countries with our military.”

A White House statement said: “The president welcomes any country with whom we have a security relationship to discuss alternative ways to address our concerns, including our concerns about global excess capacity. He has left open an avenue for potentially modifying or removing a tariff under certain conditions for individual countries.’

Mr Trump confirmed a 25 per cent tax will apply to steel imports, and 10 per cent will be added to aluminum brought into the US. He said the excess of imported steel and aluminum is a “travesty” and hurts American workers and industry.

In making the long-awaited announcement Mr Trump said the US industry has been “ravaged by aggressive foreign trade practices.” “It’s really an assault on our country,” he said.

Canada and Mexico will both be spared from the tariffs while they negotiate the North American Free Trade Agreement with the US.

Mr Trump said he would not place any new tax on steel and aluminium products in the US, potentially benefiting companies like BlueScope Steel which has a mill in Ohio.

“We will not place any new tax on a product made in the USA so there’s no tax if the product is made in the USA. You don’t want to pay tax? Bring your plant to the USA, there’s no tax, which we will benefit from the massive tax cuts that we have in place,” he said.

The laying off of millions of workers and “decimation of entire communities” was “going to stop” under his watch, Mr Trump declared before signing the tariffs into law.

“This is not merely an economic disaster but it’s a security disaster. We want to build our ships, we want to build our planes, we want to build our military equipment with steel and aluminium from our country. Now we’re finally taken action to correct this long overdue problem, it’s a travesty,” he said.

Earlier Mr Trump tweeted: “We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military’’.

Looking forward to 3:30 P.M. meeting today at the White House. We have to protect & build our Steel and Aluminum Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military.

— Donald J. Trump (@realDonaldTrump) March 8, 2018

The US tariff announcement comes as trade ministers from 11 Pacific Rim countries signed the Trans-Pacific Partnership in Chile this morning. The TPP, which would have represented 40 per cent of the global economy and nearly one-quarter of its trade, was left for dead after Mr Trump pulled out to pursue his “America First” agenda.

Australia has been lobbying the Trump administration furiously over the past 48 hours as it became clear that the Trump administration was considering exempting certain countries from the tariffs — something it had ruled out earlier in the week.

The Foreign Minister, Julie Bishop, who is in New York, spoke last night to Secretary of State Rex Tillerson and made her case for Australia to be exempted. The Australian embassy in Washington has also been reaching out to the administration to press Australia’s case for exemptions.

Australia exports $US210 million in steel and $US213 million in aluminum to the US each year.

Shortly before Mr Trump’s announcement, Trade Minister Steven Ciobo said Australia continued to make every effort to ensure that our national interest is safeguarded.

“We build upon the understanding that was reached at the G20 last year and we build on the work that the Prime Minister and I undertook directly with the President and (Commerce) Secretary (Wilbur) Ross,” Mr Ciobo told ABC radio from Santiago, Chile.

“What I’m saying to you very clearly is that the Prime Minister, myself, our Ambassador, the Foreign Minister, the Defence Minister, we’ve all been putting Australia’s best foot forward, we have all been engaging in good faith with the White House and the Trump Administration and others, and making sure that we put an impressive case for Australia to have an exemption.”

Labor has responded to fears of a trade war by promising to triple penalties for circumventing trade remedies and better resource the Anti-Dumping Commission. Mr Ciobo said Labor’s position was “a little strange”.

“We have a very strong Anti-Dumping Commission, they’ve done very good work, we’ve seen no evidence that the anti-dumping commission is in any way, shape or form falling short,” he said. “All of a sudden we just have the Labor Party pop up now and say, ‘oh, we need to do something knee-jerk’.

“Well that’s not how we develop good policy. What we will continue doing is to make sure that the anti-dumping commission is able to use their powers effectively if we see, and I stress if we see a diversion of dumped product from other markets into Australia as a result of these tariffs, and we’ll only know that in time.”

Mr Ciobo said the TPP deal with 10 other Pacific rim countries would achieve a win-win outcome which was good for jobs in Australia. He said a side deal with Canada which will see tariffs on Australian beef exports phased out over five years rather than ten was an example of the types of wins the TPP deal would achieve for Australia.

“These are important,” he said. “They help to grow our export markets, they help to get us preferential market access to very big nations that have high demand for Australian products and this ultimately is good for driving jobs in Australia.”

Social Services Minister Dan Tehan said that as a former DFAT official who was involved in trade discussions, he believed the Turnbull government had put a very strong case for exemption to the Trump Administration.

“I think it’s done it in a very constructive way,” he told ABC radio.

“It hasn’t sought to politicise, hasn’t sought to escalate the problem, and I remain extremely hopeful that the Trump Administration will look upon our very effective lobbying and I think the government was getting its message into the White House even last night on this.

“I think that we have placed ourselves in an excellent position to be exempted.”

Mr Tehan said Mr Turnbull had developed a very strong relationship with Mr Trump, enabling Australia to speak frankly with the Trump administration.

“Obviously government ministers also, be it the Foreign Minister or the Trade Minister, have excellent relationships into the Trump Administration,” he said.

Mr Tehan said the government would be arguing our case on the basis that Australia is a key, longstanding ally of the US, and that there would be broad national security implications if we were subjected to the tariffs.

“We have fought alongside them in every major conflict,” he said.

“They know that any trade war would potentially hurt jobs here in Australia. I just look at my own electorate. I’ve got the Portland aluminium smelter here. No one wins by job losses.

“It wouldn’t do our economy any good if there was a trade war that would harm potentially our ability to provide two per cent of GDP into national security, into our defence forces, which we are doing.

“The US understands that we are pulling our weight when it comes to our military spending, so there are a number of reasons why we can put a very strong case to the Trump Administration on this.”

Mr Tehan denied that Australia had been forced to grovel for exemptions through late night phone calls. “Let’s be clear we’re not grovelling. We are putting the case as a longstanding ally,” he said.

“We’ve said at the outset that we would prefer that the US and the Trump Administration didn’t go down this path, but we have made our position very clear in a cool-headed, in a manner which hasn’t sought to escalate this, and that is the right thing to do.

“If you look at Bill Shorten’s response, wanting to escalate it, talking about how we should retaliate before a final decision has even been announced, that the worst way to go about it.

“That is how you get a trade war going and continuing. We want to make sure that the damage is minimal and that we are exempt, and that has been our strategy the whole way through.”

Mr Ciobo has spoken to US Trade Representative Robert Lighthizer, who is in charge of negotiations with countries seeking exemptions.

“ I have today spoken with US Trade Representative Robert Lighthizer and will continue to do so.”

“We welcome President Trump singling out Australia and we look forward to working through the process and finalising a positive outcome in the next two weeks,” he told the Australian.

Cameron Stewart is also US Contributor for Sky News Australia.

With Rachel Baxendale