Australia dodges U.S. metal tariffs after Trump, Turnbull do deal

Malcolm Turnbull has used a business summit to stress the benefits of cutting corporate tax

Thousands of Australian and US jobs could be affected if US President Donald Trump keeps his promise to hike steel tariffs, which Mr Turnbull wants an exemption from.

President Trump said Canada and Mexico would be exempt from a 25 per cent tariff on imported steel and a 10 per cent tariff on aluminium, and indicated a path for what he called "great partners and military allies" to sidestep the imposts.

Earlier Mr Trump announced that he'd spoken to Mr Turnbull and the two nations were working on a deal to provide an exemption to the tariffs.

European Union industry commissioner Elzbieta Bienkowska, who is visiting Australia, said it was important to send a strong message supporting trade liberalisation.

"Thank you for confirming new tariffs won't have to be imposed on Australian steel & aluminum - good for jobs in Australia and in U.S.!"

Foreign Minister Julie Bishop is in NY and seeking talks with US Secretary of State Rex Tillerson to press Australia's case for an exemption.

The announcement sparked talk of a trade war and fears the Australian mining industry would be placed under even more pressure as it attempts to compete with some of the world's biggest exporters.

White House press secretary Sarah Huckabee Sanders told reporters any exemptions would be on a "case-by-case" and a "country-by-country" basis, but there would potentially be carve-outs for Mexico and Canada on national security grounds. The agreement, which was reportedly witnessed by several USA and Australian officials, occurred during the G20 meeting in Germany last July.

Australia's free pass comes after Turnbull flew to the United States in February to meet with the president and United States officials to discuss the future of trade, economic growth and security between the two nations. "This is a very important matter for Australia, it's also a very important principle", she said.

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