Australia's hopes for US tariff exemptions dim as Foreign Minister Penny Wong calls it a difficult pursuit

From the early-mid month of February 2025, Australia has been actively seeking an exemption from the United States' 25 per cent tariffs on aluminium and steel, claiming the country's contribution to the US domestic market trade surplus as a key justification for securing an exemption. During this process, optimism briefly flickered in the Australian market when US President Donald Trump hinted at a possible reprieve, describing Australia's Prime Minister Anthony Albanese as "a very fine man." The hope was further fuelled following a positive phone call between Albanese and Trump on February 11, where they discussed the Aukus defence pact, critical minerals, and mutual foreign investments.

Albanese said after the call, "Our aluminium is a critical input for manufacturing in the United States. Our steel and aluminium are both key inputs for the US-Australia defence industries in both of our countries."

But Alas! The optimism was short-lived. Within no time at all, the US government dashed Australia's expectations, with Trump accusing Australia of breaching a verbal commitment to limit aluminium exports. He claimed that Australia's aluminium export volumes to the US surged 103 per cent in 2024 compared to the 2015-2017 average. Consequently, the White House announced the signing of executive orders to impose a 25 per cent tariff on aluminium and steel imports, escalating the long-anticipated trade war.

In response to the allegation, Australia's trade minister, Don Farrell, argued on February 13 that the surge in its aluminium supply to the US was with Washington's complete acknowledgement and approval. He clearly said the rise in Australian aluminium exports was in response to supply disruptions from Russia amid its ongoing war with Ukraine. "All of that was done with the full knowledge of the American government. We haven't done - at any stage - anything that the American government has not been comfortable with."