Trade and Investment Minister Steven Ciobo has lobbied US President Donald Trump's top trade official in an effort to exclude Australia's BlueScope Steel from punishing tariffs that are poised to be applied to select industrial metals imported into the United States.
Speaking from New York on Wednesday (Australian time), Mr Ciobo told The Australian Financial Review he recently met US Commerce Secretary Wilbur Ross to "put the case strongly" for BlueScope and its US subsidiary, Steelscape.
Mr Ciobo said he emphasised at the Washington meeting with Secretary Ross two weeks ago the unique US-Australian economic and defence partnership and Steelscape's employment of more than 400 Americans.
"I made sure there was a focus on the potential impact on BlueScope and its operations in America, Steelscape," Mr Ciobo said.
"Ultimately we live in an interconnected world and the Prime Minister and I are focused on making sure we can be strong advocates on behalf of Australian industry."
Steelscape has warned the US government that its financial viability would be "jeopardised" by US steel tariffs.
BlueScope chief executive Paul O'Malley said the company supports fair and free trade including anti-dumping rules, but that a "blanket restriction on trade...is not good for anyone".
"The wrong US decision may affect about 200,000 to 400,000 tonnes of exports from our Australian business at Port Kembla, with the majority feeding our Steelscape business located on the west coast of the US," Mr O'Malley said.
Steelscape's California and Washington state plants import steel from BlueScope's Australian and Asian operations to manufacture metal-coated steel and painted steel coils for non-residential buildings and construction in the US.
Any tariff on BlueScope steel could have a detrimental impact on production and jobs in Australia, where the steel feedstock is sourced from and shipped to the US.
Paradoxically, Mr O'Malley said its other NorthStar mini mill in the US state of Ohio that produces 2 million tonnes of steel annually would likely benefit from US tariffs, but "we still do not think it is good policy or the right outcome for the US steel industry".
Section 232 of the US Trade Expansion Act of 1962 allows presidents to impose trade restrictions to protect national security.
Mr Trump has argued that the US cannot become too dependent on foreign steel to build defence equipment such as fighter jets, tanks and military vehicles.
President Trump's goal is to restore manufacturing and heavy industry jobs to US "rust belt" states which delivered him the White House at last year's election.
The major US targets are expected to include cheap steel shipped from China, India and Thailand, but Australia would need to be explicitly excluded from the ruling to avoid being hit.
The European Union has warned it would "retaliate" against the US if its steel producers are hit.
The Financial Review revealed on Monday that both BlueScope and Rio Tinto are pressing the Trump administration to be carved out of the looming application of a rarely employed 1962 law that President Trump intends to hit foreign steel and aluminium with.
Rio's Canadian aluminium business has told the US Commerce Department that Canada is an integral part of the North American defence manufacturing base, so should be exempted from any US tariffs or quotas.
Secretary Ross, a billionaire industrialist who became rich scooping up distressed heavy manufacturers, was due to issue the ruling earlier this month but divisions within the Trump administration and push back from foreign allies appear to have delayed the adjudication.
On his earlier US visit this month Mr Ciobo travelled to Steelscape's Californian facility. He also met the Democratic senator for Washington state, Patty Murray.
Steelscape accounts for less than 1 per cent of US steel imports. It produces 446,000 tonnes of metal-coated steel and 332,000 tonnes of painted steel coils.
Steelscape's written submission to the US Commerce Department noted that steel shipping costs from Australia and Asia range from $US60 to $US100 per tonne – less than rail freight costs from most US steel mills.
For US mills to transport steel to the west coast they need to ship it by rail across the Rocky Mountains, "which is an expensive proposition", noted John Cross, president of Steelscape.
"The steel substrate that Steelscape must import from Australia and other countries does not threaten the security of at least this part of the United States' steel industry; it helps the industry survive and prosper," he wrote.
"If the President were to institute broad-based restrictions on steel imports, it would jeopardise the viability of Steelscape itself, and in the process threaten the livelihood of our American employees."
The Obama administration last year imposed dumping duties of nearly 30 per cent on hot-rolled steel from Australia.
