US flags wriggle room on tariff exemptions

There is a glimmer of hope Australia may be able to secure an exemption from proposed US steel and aluminium tariffs after the White House opened up some wriggle room on national security grounds.

Australia, Canada and Mexico are among the countries trying to dodge the Trump administration's proposed 25 per cent tariff on steel and 10 per cent tariff on aluminium imports.

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.

This reverses the White House's previous stance that there would be no exceptions.

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

She was cautiously optimistic about the White House U-turn.

"We (will) work hard to ensure Australia's interests will be taken into account," she told the Nine Network after the White House statement.

She noted the US had specifically mentioned Mexico and Canada, with whom it is re-negotiating a free trade agreement.

The Turnbull government had believed it secured a promise of an exemption from Mr Trump during last year's G20 leaders' meeting.

Labor says it's important the government has a contingency plan.

"They seem to put too much in a personal assurance provided by the president to the prime minister about the way these tariffs would operate," frontbencher Nick Champion told Sky News.

Thousands of Australian and US jobs could be affected if the tariffs go ahead.

Trade Minister Steve Ciobo is en route to Chile for the signing ceremony of the Trans-Pacific Partnership trade pact, which covers 11 countries but not the US.

"We need to be mindful of the bigger picture that we don't see an escalation of trade tensions, which ultimately wouldn't be good for anybody," he told ABC radio.

Treasurer Scott Morrison said Australia was proceeding in a calm and collected manner, and couldn't afford to take the tariff issue personally.

"The issue here is for everyone to keep a cool head," he told ABC radio.

"It's not about how we feel, it's about what we do."

The European Union has warned it could retaliate on US imports, including products such as motorbikes, bourbon and jeans.

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

"We are for free trade, we don't want to build walls around our territory," she told AAP in Canberra on Wednesday night.

She said Europe was ready to confront the issue.

"We are prepared, as we were prepared for Brexit, we're prepared for this," Ms Bienkowska said.

Australian Associated Press

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