Australia says its aluminum exports to U.S. are fair after report Trump considered tariffs

SYDNEY (Reuters) - Australian Prime Minister Scott Morrison on Monday said aluminum exporters are complying with the terms of a deal with the United States after the New York Times reported President Donald Trump had considered imposing tariffs on Canberra.

Prime Minister Scott Morrison speaks to the media during a press conference at Parliament House in Canberra, Australia, March 20, 2019. AAP Image/Andrew Taylor/via REUTERS

The New York Times, citing unidentified sources, said Trump had been urged to impose tariffs on Australian steel and aluminum in response to an increase in exports of aluminum to the United States over the past year.

Trump was persuaded to backtrack on the plan after advice that imposing tariffs on Australia would alienate a key ally in the Asia-Pacific region, the New York Times reported.

Morrison said Australian exporters were doing nothing wrong.

“We have an arrangement with the United States and we are working within that arrangement,” Morrison told reporters in Honiara, the capital of the Solomon Islands.

Trump imposed a 25% tariff on steel and a 10% tariff on aluminum imports in March. He agreed to an exemption for Canberra after lobbying by then Australian prime minister Malcolm Turnbull.

Australia exports about A$500 million ($347.00 million) in steel and aluminum to the United States each year.

“Australia’s aluminum producers trade at market prices in a competitive environment, receiving no government subsidies or similar support,” the nation’s trade minister, Simon Birmingham, said in an emailed statement.

Australia has long been a staunch ally of the United States and won favor with Washington in recent months for pushing back against growing Chinese influence in the Pacific region.

China has sought to increase its clout in the Pacific through increased foreign aid, which Australia has moved to undercut in recent months.

Australia has offered Pacific countries up to A$3 billion in grants and loans to build infrastructure, with Morrison declaring the region was “our patch”.

Supplementing the fund, Morrison said on Monday that Australia would also dedicate A$250 million over the next 10 years to financing infrastructure in the Solomon Islands.

Reporting by Colin Packham; Editing by Paul Tait and Joseph Radford