US tariffs: Representations made to White House to exempt Australia

Australia is making representations to the White House that tariff exemptions should be extended to Australia says Julie Bishop.

Foreign Minister Julie Bishop says Australia is making representations to the Trump Administration that steel and aluminium tariff exemptions being granted to Canada and Mexico on “national security” grounds should be extended to us.

US President Donald Trump is expected to sign the tariffs into law “by the end of the week” as affected countries, Republican leaders and businesses warn against the move and a potential “trade war”.

For the first time White House press secretary Sarah Huckabee Sanders said there may be “national security exemptions” for Canada (the biggest exporter of steel and aluminium to the US), Mexico and other countries.

“That would be (on) a case-by-case and country-by-country basis but it would be determined whether or not there is a national security exemption,” she said.

“The President’s been clear that he wants to address the trade imbalances and the unfair practices and certainly we would take anything into consideration, but as of right now we’re moving fully ahead and anything that would be changed would be done so on a national security basis.”

Julie Bishop addresses the United Nations General Assembly on Wednesday. Picture: AP.

Ms Bishop said Australia has “most certainly” been conveying the message that the exemptions should be extended to us, ever since Mr Trump shocked colleagues and US allies last week when he announced he would impose a 25 per cent tariff on steel imports and 10 per cent tariff on aluminium imports.

“Our representations are based on that exemption of national security,” Ms Bishop told Sky News.

“I do note that the United States is currently renegotiating the North American Free Trade Agreement with both Canada and Mexico and so this might be a matter that’s raised in the context of those renegotiations.

“Nevertheless Australia has been putting its case and we’ll continue to press our case that we should be exempt on those grounds.

“There is also an exemption contained in their trade laws relating to specific countries, and so another avenue is for companies to seek an exemption, and we’ll most certainly be pushing that line as well, but the Australian government is determined to continue to advocate that Australia should be exempted from this.”

Ms Bishop acknowledged that today’s announcement from Ms Huckabee Sanders was a “change in the language” from the Trump Administration.

“So we will most certainly push our case even harder, but we were already in contact with the Trump administration,” she said.

“I am scheduling a call with Secretary of State Rex Tillerson. He’s currently travelling, but I spoke today at a public lecture at the Asia Society here in New York and Americans were present, and I made the point I think very directly that tariffs and increasing tariffs leads to economic decline. It won’t have the outcome that perhaps some might think.

“Protectionist measures have been proven over history to lead to economic decline, so we are pushing the overall message that increasing tariffs is bad for economies like Australia, but also increasingly that should the United State continue down this path, Australia should be exempt as a very close ally and partner of the United States.

Ms Bishop said Australia was also emphasising our relationship as a long term ally of the US.

“We have made the point very clearly that no two countries could claim to be closer than Australia and the United States in terms of our defence and security and intelligence sharing and the interoperability between our militaries, so we of course will be pushing that line,” she said.

“Whether the administration accepts our argument remains to be seen, but we’re doing all we can to get the message across, and it’s interesting that tomorrow Australia’s time on the 8th of March Steve Ciobo, our Trade Minister, will be signing the trans-Pacific partnership in Santiago.

“This is an example of Australia and other countries embracing free and open liberalised trade and investment for the benefit of all the eleven member economies of the TPP11.”

Asked whether she would raise with Mr Trump the fact that he previously made assurances at last year’s G20 meeting that Australia would be exempted from the tariffs, Ms Bishop said she had not been present at the G20 meeting, which was attended by Prime Minister Malcolm Turnbull and Finance Minister Mathias Cormann.

“I can’t judge or comment on the tone or the circumstances, but I’ll most certainly be putting the case to Secretary Tillerson that if there are exemptions to be made then Australia should be among those countries exempted,” Ms Bishop said.

“But overall there’s a broader message and that is that increasing tariffs in this way risks retaliation.

“Action then brings reaction, and we don’t think that that will be in the least bit productive. “If, for example, other countries seek to impose tariffs on US goods, it leads to a trade war and nobody wins out of that.

“If the United States believes that there has been unfair competition, there’s been unfair trade, there’s been dumping of products in the United States, then there are mechanisms available to it under the WTO, under the rules-based system that the United States helped create that can be used to get an outcome that’s more favourable.”

The EU and Canada have threatened to retaliate against the tariffs as governments across the world, including the Turnbull government, urgently try to gain exemptions and clarify who will be affected.

Mr Trump has sent confusing messages on the tariffs, earlier saying he would only lift tariffs on Mexico and Canada if a “new and fair” North American Free Trade Agreement was signed.

White House director of the National Trade Council, Peter Navarro, has also said there could be carve outs for individual firms to keep operations running and American jobs but not country exclusions.

Mr Trump tweeted today that China — the primary reason for imposing the tariffs — has been asked to develop a plan to reduce its trade deficit with the US by $1 billion. Ms Sanders confirmed there had been talks with Chinese officials last week and those negotiations were continuing.

“Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon,” Mr Trump said.

Ms Bishop said Australia’s Ambassador to the United States Joe Hockey had engaged closely with Gary Cohn, who resigned as Mr Trumps senior economic adviser yesterday over the issue of tariffs.

“With him leaving, I understand over a policy difference, that’s one voice less that we have in the White House, but of course we’ll continue to deal with Secretary of State Rex Tillerson and the Commerce Secretary and others, to get our message across that we don’t believe that raising tariffs is in fact going to lead to the outcome that one might otherwise assume, and in fact it’s a race to the bottom,” Ms Bishop said.

“You rightly say that the Europeans are threatening to respond with tariffs on a whole range of products.

“I understand even Harley Davidsons and Levi jeans, iconic American products, and the United States has responded by saying they can impose tariffs on Mercedes Benz, made in the European Union.

“This is what happens. It leads to a downward spiral and that’s not good for any country.

“What we want to see is a continuation of US leadership on open, liberalised trade and investment.

“Now Australia is entering our 27th consecutive year of uninterrupted economic growth. That’s a world record. No other economy or comparable economy has achieved that. It doesn’t happen by accident, it happens through ongoing economic reform and ensuring that our goods and services can be sold into markets around the world: the free flow of ideas and capital and goods and services, so that’s what we’ll be advocating to the Administration.”

Labor’s manufacturing spokesman Nick Champion said the Turnbull government had been “all over the shop” on the issue, playing a “very reactive” game.

“I did begin by saying this is a difficult situation to deal with and hard to predict, but I guess in those circumstances a wise government would not react to it,” Mr Champion told Sky News.

“A wise government would have a contingency plan to protect our industry, particularly to enhance the anti-dumping commission, because if these tariffs applied to China, we will see a glut of Chinese steel flowing into our market, so we need a more proactive anti-dumping regime, rather than the reactive one we’ve got at the moment, and a wise government wouldn’t jump to conclusions that there wouldn’t be country exemptions, because I think it’s as I said before an ever-changing story in Washington and one might get an exemption for the entire country and we certainly deserve one.”