Australia will be exempt from the Trump administration’s Section 232 tariffs on steel and aluminium imported into the United States.
“What we have achieved is a commitment from [US President Donald Trump] that the tariffs on steel and aluminum will not apply to exports from Australia,” Australian Prime Minister 25% duties on foreign steel and 10% duties on foreign aluminium that Trumped signed into law on Thursday March 8. At the time of the signing, Trump had included exemptions only for US North American Free Trade Agreement partners Canada and Mexico.
“[Turnbull] is committed to having a very fair and reciprocal military and trade relationship,” Steelscape relies on that imported feedstock to make coated and painted flat-rolled products for customers west of the Rocky Mountains.
The West Coast has few mills that melt steel, largely because of environmental restrictions, so it relies on facilities that process imports or convert slabs.
Despite its importance to the West Coast steel market, Australia was not among the top foreign steel suppliers to the United States in 2017. That country shipped only 366,900 tonnes of steel to US ports last year, or about 1% of the 36.87-million-tonne import total for 2017, according to US Commerce Department figures. The bulk of that material was cold-rolled, hot-rolled, and coated flat-rolled steel.
Prior to the 232, Australia was already subject to US trade duties. Hot-rolled coil from Bluescope, for example, already faces anti-dumping duties of 29.58%. Section 232 tariffs would have come on top of that amount.
On the aluminium side, the US is not traditionally a destination for Australian shipments of the light metal. But Australia's exemption could see its aluminium output go to the US, should US aluminium premiums rise enough as a result of the 232 to justify such deals.