The last time Trump proposed tariffs on Australian steel and aluminium he backed down

During Trump’s first term, Australian Prime Minister Malcolm Turnbull successfully convinced Trump to exempt Australia from the Section 232 tariffs on steel and aluminium. This was in March 2018. Here’s how it happened:

Key Points of How Turnbull Secured the Exemption:

1. Economic Arguments Turnbull Used:

   • Higher Costs for U.S. Businesses and Consumers

     • Turnbull and Australian officials warned that tariffs on Australian steel and aluminium would raise costs for American industries that rely on these imports, including construction, automotive, and manufacturing sectors.
     • Since Australian exports were high-quality and competitively priced, replacing them with alternatives could increase production costs for U.S. companies.

2. Strong Diplomatic Relationship & Personal Connection

   • Turnbull had established a working relationship with Trump through previous meetings and phone calls, despite their rocky start over a refugee deal in early 2017.
   • He emphasized the historical alliance between Australia and the U.S., particularly the long-standing military and economic partnership.

3. Strategic Argument: Australia Poses No National Security Threat

   • The Section 232 tariffs were justified on national security grounds, as Trump’s administration argued that dependence on foreign steel and aluminium could weaken U.S. defense readiness.
   • Turnbull and his team successfully argued that Australia was a reliable security partner and did not pose a threat to U.S. interests.

4. Highlighting Australia’s Small Market Share

   • Australia only supplied a small fraction of U.S. steel and aluminium imports.
   • Unlike countries such as China, Australia was not accused of dumping or unfair trade practices.

5. Key Meetings and Calls

   • Turnbull held direct negotiations with Trump and key U.S. officials, including Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.
   • In a March 2018 phone call, Turnbull convinced Trump to grant Australia an exemption.

6. Support from U.S. Officials and Business Leaders

   • Australia leveraged support from U.S. defense officials and American businesses that relied on Australian raw materials.
   • U.S. Defense Secretary James Mattis reportedly backed the exemption due to Australia’s strategic military importance.

Outcome

• On March 10, 2018, Trump confirmed via Twitter that Australia would be exempt from the 25% tariff on steel and 10% tariff on aluminium.
• The exemption was seen as a major diplomatic win for Turnbull, as many close allies (e.g., the EU and Canada) were still hit by the tariffs.

Albanese does not have the relationship with Trump that Turnbull did, partially because Trump has only been in off ice for a few weeks.

This article was written by Eamonn Sheridan at www.forexlive.com.