DAVID SPEERS: Trade Minister Steve Ciobo’s been trying clarify over the past 48 hours what this means for Australia, he joins me now. Minister, thank you for your time this morning. Have you been able to clarify whether Australia will be exempt from these new steel and aluminum tariffs Donald Trump is talking about in the United States?
STEVEN CIOBO: I had the opportunity yesterday to speak with Secretary Wilbur Ross, US Commerce Secretary, and walk through some of the detail with respect to the President’s announcement. Unfortunately, at this stage it is not clear to me, or to Australia, whether or not we will be captured by the President’s announcement. It is clear that the US, what is clear I should say, is the US is still working through some of the detail with respect to this announcement, so the extent to which Australia may be captured is still yet to be determined.
DAVID SPEERS: So you’ve spoken to the Commerce Secretary Wilbur Ross, is he clear about whether this applies to Australia?
STEVEN CIOBO: Well, as I said, I’m not going to go into the details of the conversation. What I am prepared to say, David, is that the details, in terms of whether Australia will be captured or not captured, are still yet to be determined.
DAVID SPEERS: That seems a little strange, that you’ve had the conversation with the guy who is the Cabinet Representative for the Trump Administration, the Commerce Secretary no less, and we still don’t know whether Australia is caught up in this?
STEVEN CIOBO: Well, I guess each system is different. The Australian system operates one way; the US system operates a different way. I’ve spoken, as I said, with Secretary Ross and made the point, David, that we believe Australia should be exempt. There’s a variety of reasons why Australia should be exempt, not least of which was the understanding reached at the G20, that Australia would be exempt, last year. Look, we need to continue to have regular discussions with the US Administration to press the case. Ultimately, I believe it’ll come down to a decision of the President about whether he wants to have exemptions or not, and in the fullness of time, we’ll see whether that’s the case.
DAVID SPEERS: Well you mentioned that G20 assurance, this was in Germany last year, the Prime Minister Malcolm Turnbull, the Finance Minister Matthias Cormann were there, they won this assurance. From what we know, it was from Donald Trump himself. What can you tell me, Steve Ciobo, was the status of that assurance? Was it a Presidential guarantee that Australia would be exempt?
STEVEN CIOBO: Well, David, I wasn’t in that meeting but certainly reports from that meeting indicated that there was an assurance that Australia would be exempt. But as I’ve indicated to you, I’ve spoken to Secretary Ross, we spoke overnight and it was good to have the opportunity, I must say I find the Americans responsive, certainly, in that respect. So we talked through the pros and cons of the issue, so to speak. I made the case about why Australia should be exempt but what is also clear is ultimately, that decision is yet to be determined and those details will, I expect, emanate over the next several days.
DAVID SPEERS: Does it strike you though, as a little odd, that here we have such a great relationship with the United States and only, what was it, only a week or so ago. You were there, the Prime Minister was there, we had the special friendship on display in the White House, very happy images and so on, and yet we’re left in this limbo?
STEVEN CIOBO: Well David, the situation isn’t unique to Australia. Of course the situation also applies to other allies of the United States including, for example, Canada, who incidentally, is the biggest purchaser of US steel, but also the European Union. So let’s not pretend for one second as some on the left try to pretend that this is in some way a snub to Australia. The simple fact is that every country finds itself in the same situation, dealing with the US Administration. So you know, we continue to engage. I’ll tell you what I am, what I do know for a fact. I know that the reason why we are able to get a phone call and have a conversation and pursue these matters in relatively short order, is because of the strength of the personal relationship between our Government and the US Administration, and that in many ways has been championed by our Ambassador over there, Joe Hockey.
DAVID SPEERS: Now if Australia is caught up in this, is we aren’t exempted, what will it cost us?
STEVEN CIOBO: Well, David, the interesting thing when you get to the detail around all of this, and look there’s a number of different ways you can slice this, and what I mean by that is, that if you look at it purely in terms of BlueScope’s operations, we saw that, following the announcement, BlueScope’s share price actually increased. And that’s as a consequence of the fact that BlueScope has some operations in the United States and the market, presumably, was looking at it and saying, ‘well those operations in the US may be subjected to less competition now,’ but if you look at it in terms of exports from Australia to the United States, and clearly if there is an imposition of a 25 per cent tariff, well, that will have an impact. I’ve spoken about the consequent impact that could be expected in terms of jobs, off the back of that. But then you’ve also got to look at it in a much more aggregate sense, in terms of ‘what is the big picture here around trade?’ And, ultimately, we’ve seen for example, over the last 48 hours commentary from Canada, from the European Union. We’ve seen the US Government going back about tariffs on cars, and that’s what concerns me, if we continue to see an escalation of rhetoric, and, ultimately, action around tariffs applying for imports and exports across multiple economies.
DAVID SPEERS: Well, I was going to ask you that. How worried are you about what we’re seeing, not only just from Europe talking about putting new barriers in place for US imports, and the response to that now, this Tweet from Donald Trump saying ‘Ok, if you do that ill whack a new tax on European cars coming into the United States,’ I mean, it is, it seems to be escalating, at least in rhetoric very quickly?
STEVEN CIOBO: Well, that’s certainly you know, not what you would desire. The very bad outcome would be to see an ongoing, continuation escalation of tariffs across multiple products across multiple economies, that will lead to a slow-down in growth and that of course, is problematic. But David, what this also reinforces though, is the wisdom of the Coalition with respect to diversifying our trade interests. You know, we have one of the biggest trade agendas in our nation’s history, we have put in place free trade agreements with China, with Korea, and with Japan and we’ve also locked in place a free trade agreement with Peru, the country of Peru, we’ve also got a strategic partnership with Singapore-
DAVID SPEERS: But just on that, I mean, sorry to interrupt. I was gonna say we get a lot of people going ‘hang on, we’ve got one with the US, we’ve had it for years, and yet they can go and do something like this, leave us in the lurch, are these trade deals all they’re cracked up to be?
STEVEN CIOBO: Well they certainly are David, and the proof of the pudding is in the tasting, as they say. But I was making the point, we have really opened up and diversified our trading interests across a range of countries, and as anybody knows, what matters especially with respect to economic growth is to have balance, and by that I mean to have a balance of exposure to export markets, all of the big markets, all of them taking and purchasing Australian goods and services and that’s a big positive. To answer your question directly though, do they make a difference, absolutely they do. We saw last calendar year for example, where more than half of Australia’s GDP growth came from export growth and that’s helping to power the 403,000 jobs that this Government’s helped to create, 75 per cent of which have been full time.
DAVID SPEERS: Now, I’ve mentioned the European response to this and Donald Trump’s Tweet in response to that, what about Australia? If we are hit with this tariff on steel and aluminum, would Australia retaliate?
STEVEN CIOBO: Well, David, my principle concern, short term, and I’ve already spoken with the responsible Minister, Senator Seselja, and we spoke about what might happen if we do see a diversion of, for example, steel products away from the US, potentially to, for example, Australia. Now we’re not going to accept you know, cheap products flooding into the Australian market place, especially if its below-cost. We have in place an Anti-Dumping Commission, its job is to be steeled against, pardon the pun, steeled against these sorts of matters and they’ll be in a position to be able to ensure that we don’t see loss-leading product entering into Australia.
DAVID SPEERS: So we may strengthen anti-dumping provisions further to prevent, for example, Korean steel flooding the Australian market?
STEVEN CIOBO: Well, I wouldn’t say we’re going strengthen it further; we have a system that works very well now. It’s already in place and I just want to reassure people that that system is there, it does work, and we’ve used it previously to stop dumping.
DAVID SPEERS: But can you say this morning, Minister we won’t retaliate directly, in terms of higher tariffs or other trade barriers to any US move?
STEVEN CIOBO: Well, David, the simple fact of the matter is that any time you increase tariffs or put in place barriers, all you do is further impoverish people. There is no prosperity at all, that flows from putting up trade walls or higher taxes on traded goods. In fact, what we actually see, is that typically the more tariffs a country has, the bigger the deficit, that is trade deficit, that a country has, so-
DAVID SPEERS: That’d be a no then? Australia’s not going to go down this path?
STEVEN CIOBO: No, you’re verballing me. What I’m saying is that it doesn’t make good policy sense. You know, I’m also not going to get ahead of myself in terms of speculating, ‘what if this, what if that?’ I don’t think that does anybody any good. What we need to do is make calm, calculated decisions, based upon what’s happening, based upon the circumstances of the time-
DAVID SPEERS: You know this will be interpreted as the Minister leaving open the prospect of retaliation?
STEVEN CIOBO: What I’m saying to you is we have in place an Anti-Dumping Commission. That already operates; it sits there and helps us to deal with goods that might be dumped in the country. What I am also answering, because you asked me about would we increase tariffs and I’m saying as a matter of principle, escalating tariff walls does nothing except create lower levels of prosperity.
DAVID SPEERS: All right. Final one if I can, away from all of this. I need to ask you about Tasmania; the Liberals have been returned, on a lower majority but a majority in Tasmania nonetheless. It’s never an easy thing to achieve in that small Parliament. There’s accusations that Will Hodgman has bought his way into office with all the gambling money donated to the Liberal campaign, what have you made of this result?
STEVEN CIOBO: You know David, first of all I congratulate Will Hodgman. I think he’s done an excellent job of stewarding, and the stewardship he’s provided to the Tasmanian economy. His Government deserved to be returned and I’m really pleased that they’ve earned the trust of the people of Tasmania, to get re-elected a majority for a second term is terrific news for them. More importantly I think very good news for Tasmania because it means ongoing, sensible policies that are pro-economic growth and pro-jobs for Tasmania and that’s a good outcome. Frankly, I’ve got to say, Labor’s response overnight, in terms of Rebecca White’s speech but also the commentary today, I just find it extraordinarily ungracious. It really is the case of sour grapes from them; I think that’s disappointing. I also find it, frankly, quite extraordinary that the Australian Labor Party, who are effectively a bought subsidiary of the union movement, would for a second start accusing anybody else of, you know, throwing too much money at a problem, or advertising in excess in the amount that they can advertise, I mean seriously? That is the most, probably, absurd thing I’ve heard in quite a while from the Australian Labor Party.
DAVID SPEERS: Trade Minister Steve Ciobo, appreciate you joining us this morning, thank you.
STEVEN CIOBO: Thank you.
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