Australia denies security deal was behind US tariff exemptions

Australian Minister for Trade and Investment Steven Ciobo said he completely disagreed with suggestions that there could be moral pressure on Australia to agree with US President Donald Trump.
Australian Minister for Trade and Investment Steven Ciobo said he completely disagreed with suggestions that there could be moral pressure on Australia to agree with US President Donald Trump. PHOTO: AFP

SYDNEY (BLOOMBERG) - Australian Minister for Trade and Investment Steven Ciobo denied that Australia struck a security agreement with the United States to get exempted from tariffs on steel and aluminium announced by President Donald Trump.

"Ultimately, we have a very healthy trade and investment relationship with the United States, especially the type that President Trump likes, and off the back of that it's understandable that the president resolved that Australia wouldn't be subject to these tariffs," Mr Ciobo told the ABC's Insiders programme on Sunday (March 10).

Mr Trump said last Friday that he was working on a security agreement with Australia that would exempt the country from planned tariffs on steel and aluminium imports.

On Saturday, Australian Prime Minister Malcolm Turnbull confirmed that Australia would be excluded from the tariffs, saying that "now the legal paperwork - the proclamation process under the executive order - will take its course to put that direction into effect".

"What the prime minister made clear yesterday and what the president's tweet also referred to is now the legal process internally in the United States - it is effectively just about the paperwork that's got to be undertaken," Mr Ciobo said.

Mr Ciobo said he completely disagreed with suggestions that there could be moral pressure on Australia to agree if, for example, Mr Trump asked to conduct freedom of navigation exercises in the South China Sea.

Canada, Mexico and Australia have secured exemptions from the tariffs of 25 per cent on imported steel and 10 per cent on aluminium announced by Mr Trump, though Canada's and Mexico's were conditional on progress being made in renegotiating the North American Free Trade Agreement.

European Union trade chief Cecilia Malmstrom said there was no "immediate clarity on the exact US procedure for exemption" following a trilateral meeting on Saturday with her American counterpart and Japan's trade minister.

Mr Trump responded on Twitter, saying that if EU countries "drop their horrific barriers & tariffs on US products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!"

Mr Ciobo said that "we are in choppy waters" in terms of the global trade environment. "Over the next 12 to 24 months, getting the settings right on trade is going to be more important than ever," he said.