President Donald Trump announces sweeping new tariffs on Australian steel and aluminum: What it means for you

Australian steel and aluminium exports to the United States are set to be slapped with 25 per cent tariffs in a move that has been described as a ‘slap in the face’ amid the nation’s longstanding free trade agreement with America.

President Donald Trump announced the tariffs on imported metal would broadly apply without exemptions, during a media conference aboard Air Force One as he was flying to the Super Bowl in New Orleans.

‘Any steel coming into the United States is going to have a 25 per cent tariff,’ he told reporters on Monday morning (AEDT).

In 2018, Australia was granted an exemption from 25 per cent American tariffs on steel and 10 per cent import taxes on aluminum after then prime minister Malcolm Turnbull pointed out the US had trade surpluses with Australia – where Aussies bought more goods and services from Americans than they bought from us.

Canada, Mexico, the European Union and the UK were also given exemptions on steel and aluminium tariffs. 

But this time, President Trump has imposed tariffs more broadly, even though Anthony Albanese’s government made the same point about the American trade surpluses with Australia that have stretched back to 1952.

The Opposition’s trade spokesman Kevin Hogan said the Labor government needed to secure exemptions for Australia.

‘It is time critical the Labor government ensures an exemption for Australia,’ he said.

Nationals leader David Littleproud said urgent talks were needed, contrasting Labor’s fruitless approach with the former Coalition government’s ability to send then ambassador Joe Hockey to negotiate exemptions seven years ago.

‘We were able to send Joe Hockey there, to be able to put a cogent argument about carving Australia out,’ he told Sky News on Monday.

Mr Littleproud said Australia’s current Ambassdor to Washington, former prime minister Kevin Rudd, was proving to be a liability. 

‘Unfortunately, we’ve got an ambassador there that’s made disparaging comments about the President. And we’ve got a Prime Minister that’s made disparaging comments about the President,’ he said. 

‘We were able to send Joe Hockey there, to be able to put a cogent argument about carving Australia out,’ he argued.

‘Unfortunately, we’ve got an ambassador there that’s made disparaging comments about the President. And we’ve got a Prime Minister that’s made disparaging comments about the President.’

Trump’s announcement will affect steel workers at Port Kembla, near Wollongong, and Whyalla, in South Australia, along with aluminium manufacturers in Newcastle north of Sydney.

Aluminium and steel are major exports to the United States, after financial services, gold, sheep and goat meat, transport services and vaccines.

Australia has also had a free-trade deal with the United States since 2005, which in theory is meant to allow tariff-free exports into each other’s markets.

Treasurer Jim Chalmers was last week hopeful Trump would continue to exempt Australia from his wide-ranging tariffs.

‘We are confident that we can navigate these changes coming out of DC. We are well placed, we are well prepared,’ he told ABC News Breakfast on February 4.

‘The Americans run a trade surplus with us, they have done since the Truman Administration I think in 1952, a substantial trade surplus. 

‘Our relationship is mutually beneficial, and all of the conversations that we’ll have with our American counterparts will be about making sure that this really key economic relationship continues to be beneficial to both sides.’

In 2023, the United States had a $US17.7billion goods trade surplus with Australia, which would be worth $A27.2bilion at today’s exchange rate of 63 US cents. 

The United States is Australia’s third biggest two-way trading trading partner, but only the fifth biggest export market behind China, Japan, South Korea and India, who are bigger buyers of Australian iron ore and coal.

The Australian share market’s benchmark S&P/ASX200 was 0.5 per cent weaker on Monday morning, following the announcement. 

While Trump had campaigned to reintroduce hefty tariff barriers in 2024, he had also given hints since coming to office that tariffs could be used as a negotiating tactic. 

During his first term in the White House, he repeatedly expressed concerns about American trading partners that sold more goods to the U.S. than it bought from them. 

The Trump Administration’s wider-ranging tariffs in 2025 are set to mark the most punitive import restrictions since the 1930 Smoot Hawley Tariff Act.

China imposed heavier tariffs on Australia during the pandemic despite having a free-trade deal with Australia since 2015, after then prime minister Scott Morrison called for an inquiry into the organ’s of Covid.