TRANSCRIPT
"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 benefit of our economic partnership that has delivered over more than 70 years."
Strong words from Prime Minister Anthony Albanese, as 25 per cent tariffs on steel and aluminium exports to the United States come into effect.
The Australian Government spent the last month trying to secure an exemption with a number of proposals being put to the United States.
Australia had been given hope by the President's own words, Mr Trump promising he would consider an exemption for Australia after a phone call with Anthony Albanese.
In the end, Australia's closest ally did not offer any special treatment.
"We will advocate for Australian trade with the United States at every level and through every channel. Australia will continue working hard for a different outcome."
During Donald Trump's last presidency the coalition government secured an exemption for Australia from similar tariffs after they had been imposed.
Senior economics lecturer at the University of New South Wales, Scott French doesn't expect a repeat.
"This time, it was pretty clear that the Trump administration's stance was that they were not going to have any exceptions at all. Last time, they implemented very similar tariffs on steel and aluminium, and they made lots of exceptions for friendly countries. And I think they felt that this dampened the effectiveness of the tariffs for their particular goals."
Those goals are protecting domestic industry, increasing domestic supply, and avoiding reliance on other countries for materials critical to defence.
Chief Executive of the Association of Mining and Exploration Companies Warren Pearce says there wasn't much the Australian government could do.
"The learning from the United States has been the exemptions that were put in place in 2017 essentially undermined their entire program. And what happens? American companies look to get the cheapest product, and so headed straight to where the exemptions were available. So this time it's been a blanket approach. I really don't think there's much the Australian government, or indeed any national government could have done to receive an exemption in this space."
But Opposition Leader Peter Dutton disagrees.
"It's obvious that Anthony Albanese and Kevin Rudd have had a shocker. The Prime Minister can't secure a phone call, let alone a meeting with the President the United States and how on earth can an outcome be negotiated if the President won't even take the Prime Minister's call. So it's not just Australians who see the Prime Minister as weak and incompetent, it's our trading partners as well."
He says circumstances would be different under a different government.
"Yes, absolutely I believe we can get a deal done with the Trump Administration."
Anthony Albanese has ruled out reciprocal tariffs, saying it would only hurt the Australian economy.
He's seeking another call with President Trump.
There's plenty at stake for the two nations that have stood side by side through the 21st century across political lines: a free trade agreement, close security partnership with billions being spent on submarines, US military bases on Australian soil, and other in-demand exports.
Mr Pearce says the industry impacts will be limited in the short term.
"There probably won't be as much impact as people expect. The reality is that with a no exemptions policy to the United States tariffs, the reality is we're still on the same playing field with every other nation in the world."
... with exports still to flow to the US.
"If the United States or the Trump administration's desire is to protect US industry and aluminium, steel, that's going to take quite a long period. So I think we'll continue to be exporting aluminium, steel. It's just that American companies will be paying more for them in the immediate term, and over time, we'll have to make, find other markets for our products as United States increases its own capacity."
But with an erratic tariffs regime Dr French says its unsettling for global markets.
"It's hard to say sort of where it will end up and I think that's a big part of the issue. Because of the complexity of those global supply chains, it's really hard to forecast exactly where the effects are going to be felt, and so that creates a lot of uncertainty, and uncertainty is bad for sharemarkets. Now on top of that, you add the policy uncertainty."
Mr Pearce warns Australia is exposed to global trade issues.
"What's happening right now is pretty scary for Australia, because the tariff war, the trade war that's going on now, has the ability to continue to push it in a situation where we are not in control of, indeed, the largest driver of our economy. If those trade wars start to have an impact on places like China and Southeast Asia, where many of our products go, ultimately that could have big impacts for the Australian economy."
