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Prime Minister Anthony Albanese will speak to US President Donald Trump in a bid to keep Australia exempt from US tariffs on steel and aluminium.
Earlier today, Trump said he would impose 25 per cent tariffs on all steel and aluminium imports to the US, likely including those from Australia.
"We will continue to make the case for Australia to be given an exemption to any steel and aluminium tariffs," Albanese told Parliament this afternoon.
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Albanese said he had scheduled a meeting with Trump to discuss the issue.
"I will always stand up for Australia's national interest, and it is in Australia's national interest to have free and fair trade," he said.
"This government has a strong record of working with other nations to protect and advance Australia's trade interests.
"We will continue to engage diplomatically with the US, not with loud hailers, but diplomatically."
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Shortly after opening, the Australian Stock Exchange (ASX) dropped by 0.65 per cent, losing 55 points in response to the news.
"Any steel coming into the United States is going to have a 25 per cent tariff," he told reporters Sunday on Air Force One as he flew from Florida to New Orleans to attend the Super Bowl.
When asked about aluminium, he responded, "aluminium, too" will be subject to the trade penalties.
Trump also reaffirmed that he would announce "reciprocal tariffs" —"probably on Tuesday or Wednesday" — meaning that the US would impose import duties on products in cases where another country has levied duties on US goods.
"If they are charging us 130 per cent and we're charging them nothing, it's not going to stay that way," he told reporters.
According to the United Nations COMTRADE database, Australian iron and steel exports to the US were worth about $378 million ($US237 million).
Australian exports of aluminium are worth about $503 million.
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One of Australia's largest steel-producing companies BlueScope saw its stock price rise 3.46 per cent this morning to $22.26.
BlueScope has manufacturing operations in the US.
Another Aussie steel company Bisalloy Steel dropped 5.05 per cent after the announcement.
Trump previously announced tariffs on steel and aluminium during his previous term as president in 2018,
Australia was exempt from the list of countries affected after negotiations between Trump and former Prime Minister Malcolm Turnbull.
Trump's latest announcement comes days after the Federal government sent $798 million to Washington as part of the AUKUS submarine deal.
Policies like these tariffs could put more pressure on Australian manufacturers to stay competitive, but the changes he's looking for won't happen overnight, according to International supply chain consultants at TMX Transform.
"The tariffs, plus an increasing push towards reshoring, is applying pressure on Australian suppliers who already bear incredibly high costs even compared to the US" Strategic Advisor Bruce Herbert said.
"Given this cost of energy and the myriad other disruptors – inflation, cost of shipping, labour shortages – tariffs will simply compound the pressure."
"Major decisions about supply chains take time to implement – production infrastructure and systems take years to transition. Trump can utter a few words about tariffs overnight, but complex supply chain transformation can't happen that fast."
Trump's comments are the latest example of his willingness to threaten and impose import taxes.
Tariffs are coming much earlier in his presidency than during his previous four years in the White House, when he prioritised tax cuts and deregulation.
Trump has alternately said he sees import taxes as tools to force concessions on issues such as immigration, but also as a source of revenue to help close the government's budget deficit.
– Reported with Associated Press
