Chaos fears over looming deadline
GOVERNMENT ministers are racing against the clock to secure further exemptions to a US deadline that could cripple global trade overnight.
President Trump's exemptions to steel and aluminium tariffs provided to major trading partners including Australia, the European Union, Canada, Mexico, Brazil, Argentina and South Korea are due to expire on May 1.
If unresolved, those countries could become subject to US tariffs of 25 per cent on steel and 10 per cent on aluminium as previously announced in a move designed to target China.
The White House has not yet confirmed any exemptions will be made permanent and leaders of the European Union stand "ready to react" if they do go into effect.
If tariffs do go into effect, it could paralyse activity between the US and EU economies, which accounts for one third of global trade flows and half the world's GDP, according to the EU.
The looming deadline is "sowing chaos" on international shipping routes, The New York Times reports, with manufacturers unsure if ships may be barred from US ports.
"It's dawning on foreign leaders that decades of warm relations with the US carry little weight with a president dismissive of diplomatic norms and hostile toward the ground rules of international trade," the paper notes.
On Monday, Foreign Minister Julie Bishop said Australia is calling to extend the temporary reprieve.
"The Prime Minister and other ministers have been relentless in our advocacy for Australia and we will continue to ensure that we receive that exemption," she told the ABC on Monday, adding that Australian steel exports helped create US jobs by being processed on arrival.
"That's a point we've been making to the US administration, including in my conversation with Mike Pompeo, the new secretary of state, last week," Ms Bishop said.
Treasurer Scott Morrison said he has "no doubt" exemption would be honoured, while Trade minister Steven Ciobo said he expects a "deal that's been reached" between Prime Minister Turnbull and President Trump earlier this year to be honoured.
However EU leaders seemed less confident despite recent bilateral meetings between German Chancellor Angela Merkel and French President Emmanuel Macron with President Trump.
"The EU must be ready to react, if necessary, with efficiency and speed," the two leaders said in a statement also issued with UK Prime Minister Theresa May.
On Monday European Commission spokesperson Margaritis Schinas said talks were underway with the US government "at all levels".
"We are patient, we are prepared and Labour Day will be full of labour for us," Schinas told reporters.
EU Trade Commissioner Cecilia Malmstrom has previously said tariffs could lead to a harsh retaliation that could see US products such as motorbikes, whiskey, peanut butter and orange juice targeted.
Shipping industry bosses in the US have also warned of the fallout, with the US National Retail Federation's CEO and President Matthew Shay previously describing the move as a "tax on American families".
"When costs of raw materials like steel and aluminium are artificially driven up, all Americans ultimately foot the bill in the form of higher prices for everything from canned goods to cars," he told Maritime News earlier this month.
President Trump has previously railed against metal imports he claims are subsidised by foreign governments and hurting US producers. Temporary waivers were granted for the EU, Australia, Argentina, Brazil, Canada, Mexico and South Korea. Since then, South Korea has revised aspects of its free-trade agreement with the US in exchange for a permanent exemption.
Trump is also hoping to renegotiate the North American Free Trade Agreement (NAFTA) with the US' largest trading partners to secure a better deal for the country.
Australia has a $42.7 billion trade relationship with the US, but imports more than it exports. In 2016-2017, major Australian exports were beef, meat, aircraft and pharmaceutical products, according to the Department of Foreign Affairs and Trade.
- With wires