Prime Minister Malcolm Turnbull’s initially rocky relationship with US President Donald Trump appears to be right back on track after Australia secured an exemption from new US steel and aluminium tariffs.
While Canada and Mexico have won 30-day exemptions, Mr Turnbull is the only national leader to secure a deal to avoid the US tariffs of 25 per cent on steel and 10 per cent on aluminium.
Mr Turnbull’s flying visit to Washington along with months of lobbying – including from Mr Trump’s friend, former Australian golfer Greg Norman – is thought to have tipped the balance.
It follows a somewhat tense start between the leaders in January last year, when the newly inaugurated president was calling world leaders and abruptly ended the “worst [phone] call by far” with the Australian Prime Minister.
“Each of us has no closer ally,” Mr Turnbull said when announcing the trade deal with the United States on Saturday morning.
As is his way, Mr Trump first hinted at the tariff exemption in a Twitter post confirming the pair had spoken on Saturday.
Spoke to PM @TurnbullMalcolm of Australia. He is 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 aluminum tariffs on our ally, the great nation of Australia!
— Donald J. Trump (@realDonaldTrump) March 9, 2018
However, it remains unclear if Trump’s reference to a “security agreement” is something more, with Mr Turnbull seeking to defuse the comment and any ramifications it might have for security arrangements in Asia.
“The reference to the security agreement in his tweet is shorthand for the legal paperwork that has to follow through a proclamation in accordance with the executive order,” Mr Turnbull said.
Great discussion today on security and trade. Australia/US trade is fair & reciprocal & each of our nations has no closer ally. Thank you for confirming new tariffs won’t have to be imposed on Australian steel & aluminium – good for jobs in Australia and in US! https://t.co/9ZKMw5n1dZ
— Malcolm Turnbull (@TurnbullMalcolm) March 9, 2018
University of Western Australia professor and Perth USAsia Centre senior fellow Peter Dean told The New Daily Mr Turnbull’s successful White House visit was “diametrically opposed” to the leaders’ first contact 12 months ago.
“A positive relationship with Mr Trump and Mr Turnbull is now forged, and indirectly a close strategic and security relationship does help,” Dr Dean said.
“But this is an easy sell for Trump because of positive trading. The US has a trade surplus in Australia and it is the largest direct foreign investor in Australia.
Turnbull has handled this well, with the right level of messaging and now knows how to speak to Trump and his administration by sticking to what is mutually beneficial.”
Dr Dean discounted the military “alliance” between the nations as a big a factor in the tariff exemption, noting Australian leaders had attempted to leverage the United States strategic partnership for trade agreements since the 1960s, particularly former Prime Minister John Howard and the Australia-USA free trade agreement of 2004.
“The Americans made it clear then it didn’t matter if we were allies or not,” he said.
But it was not all good news, with Australian Industry Group Chief Executive Innes Willox warning the US tariffs could still hurt Australian companies.
He said any special treatment afforded to Australia would only apply to shipments coming out of the country, and not to those from Australian companies in third markets.
“As a country with a high reliance on trade, the risks of broader damage to the global economy from a trade war are great,” Mr Willox said.
Kevin Rudd says global growth is still at risk
Former prime minister Kevin Rudd said on Saturday he was also concerned about a global tit-for-tat, taking issue with Mr Trump’s belief that trade wars are good.
“History tells us they are bad, and they end up causing not just a contraction in the global trade but, as a result of that, a contraction in global growth,” he told the ABC.
Shadow trade minister Jason Clare welcomed the “great news” and congratulated the Coalition on securing the exemption which, he said, Australia deserved.
But he urged Mr Turnbull to put in place measures to prevent foreign steel, which was destined for the United States, from being “dumped” in Australia at below-cost prices.
“We’ve got it, that’s terrific,” he said. “But there’s one more thing we need to do and that’s beef up the powers of the dumping commission so that we’re ready just in case steel and aluminium gets dumped here in the weeks ahead.”
West Australian Premier Mark McGowan said he believed Mr Trump’s actions could still have some unforeseen and wide-ranging consequences, given his state exports iron ore to countries like China and Japan.
“You’ve got to remember America wants a steel tariff … and there might be retaliation from other countries … it might have an adverse impact on Western Australia due to the tens of thousands of jobs that rely upon our iron ore industry,” he said.
-with ABC, AAP