Federal Government officials are increasingly pessimistic about Australia’s chances of dodging the US steel and aluminium tariffs unveiled by Donald Trump.
Prime Minister Malcolm Turnbull and Trade Minister Steve Ciobo have been lobbying the Trump administration to spare Australia from its plan to impose a 25 per cent tariff on steel, and a 10 per cent tariff on aluminium imports.
But Peter Navarro, director of the National Trade Council, has poured cold water on the Government’s hopes for a blanket exemption.
“At this point in time there’s no country exclusions,” Mr Navarro said.
“As soon as [the President] starts exempting countries, he has to raise the tariff on everybody else. As soon as he exempts one country, his phone starts ringing with the heads of state of other countries.”
Australia exports about $500 million in steel and aluminium to the US each year.
There has been uncertainty about the implications for Australia because of the chaotic atmosphere inside the White House.
But the ABC has been told the prevailing view in the Government is now that Australia will not be exempt — unless Mr Trump has a last-minute change of heart.
That does not mean that Australia will bear the full brunt of the tariffs.
Mr Navarro left the door open to giving exemptions to some imported steel and aluminium products that are not made in the United States.
“There will be an exemption procedure for particular cases where you need to have exemptions so that business can move forward,” he said.
BlueScope Steel in talks with Government about its case
Australia’s major steel exporter BlueScope might also get favourable treatment because it has a substantial presence in the United States and sends steel from Port Kembla to its manufacturing plant in California.
The ABC understands BlueScope has been in discussions with the offices of the Prime Minister, Trade Minister and US ambassador Joe Hockey to ensure its case is put forward to the Trump administration.
But officials warn that even if Australian producers are spared the worst, there is a real risk that other countries will move to dump steel here at cheaper prices, hurting the local steel industry.
Labor is demanding the Government ratchet up its attempts to lobby the US on the issue.
Opposition Leader Bill Shorten said he hoped Mr Turnbull would get on the phone and “at least try” to secure an exemption for Australia.
Mr Shorten presented the issue as a litmus test for the US alliance.
“Australia and America have been allies in all sorts of adversity and conflict. I hope at times like this that all of our other friendship counts for something,” he said.
Australian Workers Union national secretary Daniel Walton urged the Government to do more to protect Australian steel and aluminium industries from the tariffs and potential dumping from other countries.
“Our country has been a significant target of dumping in the past and we are really concerned about what this will mean going forward,” he said.
“What are the other countries going to do to try and find a home for their products?
“Certainly I would argue that our Government is the quiet church mouse when it comes to some of the other nations who are literally calling in ambassadors and threatening the US at a public level.”
The Trump administration’s tariffs announcement has drawn a fierce backlash from several countries.
The European Union has already prepared retaliatory measures, and bureaucrats warn the risk of a transatlantic trade war is growing rapidly.
But that does not appear to have worried Mr Trump, who tweeted “trade wars are good, and easy to win”.