What did Australia promise? Inside the room where Trump and Morrison talked tariffs​on February 12, 2025 at 4:57 am

Australian officials scrambled when they heard Donald Trump had chosen to bring some of his top trade advisers to a dinner with Scott Morrison at the G20 summit in Japan in June 2019. They knew to prepare for a hard negotiation on tariffs to counter the trade warriors backing the United States president.

Morrison, who had just won the May election after becoming prime minister the previous August, made sure his side of the table included his most senior team. They expected a question from the White House about the help granted to Australia one year earlier, when Malcolm Turnbull was prime minister, to spare the country from tariffs on steel and aluminium.

Trump was in good spirits, say several of those in the room. He felt an affinity with Morrison about their surprise victories. Trump was flanked by his daughter, Ivanka, and her husband, Jared Kushner, as well as his Secretary of State Mike Pompeo and National Security Adviser John Bolton. Several of the guests said the working dinner on the top floor of Osaka’s Imperial Hotel was overwhelmingly convivial.

But the conversation turned sour when the two US trade advisers, Robert Lighthizer and Peter Navarro, launched their complaint about Australian exports. First came the claim that Australia was taking steel from China and sending it on to North America, blatantly flouting the Trump tariffs. Morrison countered this calmly: the facts showed it was utterly false.

Flanking Morrison were the Australian ambassador to the US Joe Hockey, Finance Minister Mathias Cormann and Trade Minister Simon Birmingham. They had to convince Trump to accept there was no need for alarm about steel despite the warnings from the White House team. Hockey knew this was coming: he had phoned Canberra as soon as he had heard that Navarro and Lighthizer would be at the dinner.

The confrontation

Next came a claim about aluminium: that Australia was not honouring a promise it had made the year before to limit shipments in return for an exemption from the Trump tariffs.

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Nobody on the Australian side could be sure of any such pledge. Turnbull told this masthead he gave no such assurance.

Even so, the facts showed that Australian exporters were doing well. Exports rose from $US64 million in 2016 to $US452 million in 2019, according to United Nations Comtrade figures.

“Trump left it to his lieutenants to prosecute the case,” says one of those in the room. “And Navarro was necessarily sharp.”

Trump, who was focused on a broader conversation with Morrison, insisted Australia was now running a trade surplus with the US – in a turnaround from the usual situation when Australians bought more from the US than they sold in return.

The compromise

Birmingham handed over a printed chart to prove this was not the case: the US trade surplus with Australia that year was about $US15 billion. Trump took the chart and put it in his jacket pocket.

The outcome was a compromise. The Australians said they would make sure the aluminium exports did not surge. The Americans made sure Australia kept the tariff exemptions. And the tension was kept under wraps. When journalists asked questions of Trump during a brief appearance for the cameras, he praised Australia as one of America’s best and oldest allies.

It was up to Birmingham and top government officials to make sure the aluminium industry understood the very real threat that they would lose their tariff exemption.

This led to a series of voluntary undertakings from the industry, checked by the Department of Foreign Affairs, so the government could brief the Department of Commerce in Washington.

Aluminium industry executives say there were talks about the US concerns but there was nothing in writing to limit exports, putting companies in a difficult position. The industry could not collude on shipments and prices, because that would mean acting as a cartel – and inviting prosecution by the competition watchdog. In a free market economy, there was no central control over the exports.

Now the promises from that dinner, remembered differently by the two sides, are echoing around the current negotiation with Prime Minister Anthony Albanese about whether Australia gains an exemption from the 25 per cent tariffs on steel and aluminium that Trump announced this week.

The dispute

What did Australia promise? Albanese and his ministers do not have a signed document to check. The commitment to limit aluminium exports to the US was verbal, voluntary and a bit vague.

“It was a pause, more than anything,” says one Australian witness. “It was a verbal commitment to keep it under a cap, but not in perpetuity.”

Trump’s tariff proclamation, however, rebukes Australia. The document signed this week says aluminium imports from Australia had “surged” and were 103 per cent higher than the average volume from 2015 to 2017 when the exemption was agreed. “Australia has disregarded its verbal commitment to voluntarily restrain its aluminum exports to a reasonable level,” it says.

In a briefing just ahead of Trump signing the order, White House officials singled out Australia for criticism on this point. And in an opinion piece for Fox News accompanying the announcement, Navarro said Australia had “doubled its primary aluminum exports to the US” when domestic US production fell 30 per cent.

So the memories of the 2019 meeting will shape the talks over the 2025 tariffs.

The sequel

Navarro is back in the White House and is arguing against any tariff exemptions. He served four months in prison earlier this year for refusing to comply with a Congressional subpoena to testify over the riot at the Capitol in January 2021. He is one of Trump’s most loyal lieutenants.

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Who will Trump listen to? Those at the dinner in Osaka remember the way the White House trade team led the attack on Australia, but also the way Trump held back from the complaints. In the end, the president heard the Australian arguments and kept the exemptions.

Trump heaped praise on Morrison in Osaka when the media were allowed in, very briefly, to hear a few public remarks. “It’s a fantastic thing you did,” he said of Morrison’s election victory the previous month. He warmed to Morrison because he saw the prime minister as a conservative winner – just like himself.

Albanese has to negotiate with Trump from a very different position: as a progressive leader going into an uncertain election. And he has to navigate the conflicting memories of the promises made across the table in Osaka.

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