Australia continues to lobby as US rules out tariff exemptions on aluminum, steel

The Australian aluminum and steel industries are optimistic about resolving the tariff issue despite the US government's decision to deny Prime Minister Anthony Albanese's request for an exemption.

US President Donald Trump signed proclamations on Feb. 11 to close existing loopholes and exemptions on aluminum and steel imports. He restored a 25% tariff on steel imports from his first term and raised the tariff on aluminum imports from 10% to 25%, effective March 12.

While Trump said he would give "great consideration" to Albanese's request for an exemption after a phone call between the two in February, White House press secretary Karoline Leavitt told Australian media in Washington that the US president had "considered it and considered against it."

"There will be no exemptions," Leavitt said in a statement March 12.

In a statement the same day, Albanese said, "Such a decision by the Trump administration is entirely unjustified. This is against the spirit of our two nations' enduring friendship and fundamentally at odds with the benefits [which] our economic partnership has delivered over more than 70 years."

"Our government will continue to put forward a very strong case for an exemption, noting that the last time this occurred it took months for that exemption to be granted. We will advocate for Australian trade with the United States at every level and through every channel."

In reaction to the tariffs, Australian aluminum and steel industries said they would persist in efforts to address the tariff issue.

Australia has a free trade agreement with the US and has no tariffs on goods from the US, while Australian steel and aluminum exports to the US represent less than 0.2% of the total value of Australia's exports. Neither is in the top 10 of what Australia sells to the US, the prime minister said.

"Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation," Albanese said, which is why Australia will not impose reciprocal tariffs on the US.

Senior government minister Clare O'Neil told a local television outlet on March 12 that the government is "still in a discussion with the US government about [tariffs]. So I'm not going to accept this as the situation yet. We still have a little bit of time, and lots of discussions are continuing to happen."

Industry hopeful

Australian Aluminium Council CEO Marghanita Johnson directed Platts to her latest statement on March 11, which said the group would "continue working with the Australian government and its representatives on this important issue." Platts is part of S&P Global Commodity Insights.

"Bauxite, alumina and aluminum are globally traded and there are interdependencies in these supply chains," Johnson said in the updated statement.

Aluminum is the top manufacturing export for Australia, which exports around 10% of its 1.5 million mt production to the US each year. On average, Australia accounts for about 2.5% of total US aluminum imports by volume.

Rio Tinto Group, a major aluminum producer in Australia, declined to comment.

Australian Steel Institute CEO Mark Cain told Platts in a March 12 statement that the tariff is "disappointing" and the group will "continue pressing for relief on behalf of its members. The institute represents over 600 companies.

Steel generates 100,000 jobs and A$30 billion in annual revenue in Australia. The tariffs will affect about 300,000 mt/year of Australian company BlueScope Steel's exports to the US, a spokesperson said in a statement.

"A tariff exemption was negotiated during President Trump's first term. We are disappointed not to have received similar exemption status, for now," BlueScope's spokesperson said.

"We are working closely with the Australian trade and diplomatic staff in [Australia's capital city] Canberra and Washington DC, and with a wide range of senior representatives in Congress to ensure the BlueScope investment proposition is fully understood."

BlueScope, the US' fifth-largest steelmaker, has been investing in the country for over 30 years and has about A$5 billion invested across 16 US states. It employs over 4,000 American steelworkers.

While BlueScope produces more than 3 million mt/year of steel at its NorthStar BlueScope plant in Delta, Ohio, the spokesperson said the company expects to see a "positive impact from an improvement in steel prices" as the US tariffs come into effect.

"US steel prices soared following President Trump's decision to impose steel import tariffs of 25%, prompting domestic steel buyers to book as much as their contracts allowed," Commodity Insights analysts said in a note.

Platts assessed US Southeast rebar prices at $790-$800/st March 7, unchanged from Feb. 28 while the daily TSI US HRC index was at $950/st on an ex-works basis March 11, up $10/st day over day.