"The news Australia has not secured a US tariff exemption is disappointing but not unexpected," Innes Willox, Chief Executive of national employer association the Australian Industry Group, said today.
"The decision does send an unfortunate signal about the broader state of the economic relationship between our two countries and sets the scene for more uncertainty in the period ahead.
"Despite the advocacy efforts of industry and government agencies, it is very clear the US administration is in a different headspace to the last time we faced the imposition of tariffs. Parts of the administration are particularly emboldened and the geopolitical situation is different, narrowing the window for Australian advocacy.
"Last time Australia did not receive a country exemption, but the product lines were limited, which had the same ultimate effect. This time the proposed tariffs are more expansive and complex, such that carving out an exemption would not be straightforward.
"Any product that is not specifically listed for a new tariff, but contains a percentage of steel or aluminium in it, will receive the new tariffs on that proportion. This will capture a broad set of high-value Australian exports containing metals, and the impact won't be immediately obvious. If implemented, the tariffs will be devilishly difficult to implement and monitor.
"Looking beyond steel and aluminium, we also need to be wary about what products could be impacted next, and how a new US tariff regime impacts global and bilateral trade flows. These are uncertain times. The real danger is the chilling affect it will have on trade and supply chains globally, and the negative impact it will have on a global economy that is already limping.
"Ai Group is working closely with our counterpart organisations in the US to seek to influence the policy direction and continue to seek an exemption. We are also working with our members who are set to be affected to assess the impacts on their supply chains," Mr Willox said.
