President Donald Trump has announced he will not impose tariffs on Australian steel and aluminium
A major diplomatic victory for Malcolm Turnbull. His unfailingly polite approach to almost everything has paid off here. Australia has two large raw steel producers but their output is down to a quarter of what it was. And they produce less than 1% of world output. So the effect on Australian steelmakers and the coal and iron miners who supply them is likely to be minimal.
Australia is however an aluminium superpower. It is the world's largest producer of bauxite, the mineral used to produce aluminium. And there are seven existing plants (alumina refineries) to do that conversion in Australia. Alumina in turn is converted into aluminium in smelters and there are such smelters in Queensland, Tasmania, New South Wales and Victoria. So there may be a more significant advantage to Australia in aluminium
Mr Trump tweeted the announcement on Saturday morning after authorising new tariffs this week.
Mr Trump said he will not be imposing the tariffs on the 'great nation of Australia', fulfilling a promise he made to Prime Minister Malcolm Turnbull.
Mr Turnbull replied to Mr Trump's tweet, saying the pair had a 'great discussion on security and trade'.
The President said he was 'committed to having a very fair and reciprocal military and trade relationship'.
'Working very quickly on a security agreement so we don't have to impose steel or aluminium tariffs on our ally, the great nation of Australia,' he said.
Earlier this week Mr Trump introduced a 25 per cent tariff on steel imports and 10 per cent on aluminium.
He had hinted that Australia along with Mexico and Canada may be exempted from the tariffs.
Mr Turnbull said the trade relationship between the US and Australia was 'fair and reciprocal, and each of our nations has no closer ally'.
'Thank you for confirming new tariffs won't have to be imposed on Australian steel and aluminium - good for jobs in Australia and in US.'
The announcement is the latest development in the growing relationship between Mr Trump and Mr Turnbull. It began in rocky circumstances when Mr Trump berated Mr Turnbull on a call days into his presidency for a 'stupid deal' his counterpart had struck with Barack Obama.
'I will be seen as a weak and ineffective leader in my first week by these people. This is a killer,' Mr Trump told Mr Turnbull, before reportedly hanging up the phone on him. Mr Trump described the phone call with Mr Turnbull as the 'worst' out of a series he made to foreign leaders after becoming president.
Mr Trump also seemed to refer to Mr Turnbull as 'Malcolm Trumble' when speaking about the Australian leader.
The frosty start to their working relationship seemed to thaw during Mr Turnbull's recent visit to Washington D.C.
Mr Trump signed the tariffs into law on Thursday, flanked by senior officials on one side and a group of steelworkers on the other.
'You are truly the backbone of America, you know that? You are very special people,' he told the blue collar contingent. 'We want a lot of steel coming into our country, but we want it to be fair and we want our workers to be protected.'
The president said his promises to factory workers were a big reason for his 2016 victory, complaining that American steel and aluminum workers have been betrayed – but 'that betrayal is now over.'
The Associated Press reported that every nation in the world will be able to petition the United States for exemptions to the tariffs.
A senior administration official said the national security underpinnings of the new policy were 'unassailable,' and clarified that the offer of loopholes would be somewhat limited
Mr Trump will 'allow any country with which we have a security relationship to discuss with the United States and the president alternate ways' of protecting America's interests, the official said, while cautioning that petitioning countries would have to prove that their steel and aluminum exports aren't harming America's national security capabilities.