An offer of guaranteed access to Australia’s critical minerals in return for sparing the country’s steel and aluminium exports from tariffs was rejected by the Trump administration, but the government will persist with using the resources as a bargaining chip in ongoing negotiations.
With the government continuing to push its case in a bid to ward off a second wave of tariffs on products such as meat and pharmaceuticals, sources familiar with the process said the proposition involving critical minerals was rejected on the weekend when ambassador Kevin Rudd met US Commerce Secretary Howard Lutnick and sought an exemption
Anthony Albanese in Perth on Thursday. He is yet to learn if Donald Trump will accept his renewed request for a phone call.
“We spent the weekend putting it all together because we thought that was what they wanted,” said the government source, who was not authorised to speak publicly. “It wasn’t sufficient to persuade them.”
When Trump hit all imports of steel and aluminium with a 25 per cent tariff on Wednesday, and refused to exempt Australia, Prime Minister Anthony Albanese revealed that his government had “put forward a range of propositions” to the US, but he declined to elaborate.
Foreign Minister Penny Wong later confirmed that this had involved “America gaining more secure domestic supply arrangements” for critical minerals.
While Australia has been working with like-minded partners, including the US, for several years on critical mineral partnerships, progress with the US has been glacial.
As part of the tariff talks, a source said a specific proposition put to the Americans was about an offtake agreement that would guarantee the US a reliable supply, free from sovereign risk and other volatility.
Guaranteed supply
It was likened to a memorandum of understanding signed between Australia and the European Union in May last year. In return for investment to fund the processing of the minerals – which are expensive and difficult to extract – this offered a guaranteed supply.
Trump has been strong-arming Ukraine for a critical minerals deal in return for brokering a peace pact with Russia, complete with a security guarantee. He has also made noises about buying Greenland, which has a rich supply of such minerals. The former is war-torn, and the other is environmentally and geographically hostile.
Resources Minister Madeleine King declined to divulge details but made the point about the attractiveness of dealing with Australia.
“On any objective measure, Australia is the most attractive destination for investment in critical minerals, given our extraordinary geological endowment, world-leading resources sector and strong governance,” she said.
“We are working with trading partners, including the US and others to co-operate and strengthen supply chains and attract investment. The door is always open to US investment.”
The sources said the critical minerals offer would remain a key part of negotiations, but Australia had given up on steel and aluminium. The focus was now on avoiding tariffs on agricultural products and pharmaceuticals, which could be hit in a second wave in April.
Trade Minister Don Farrell has a scheduled phone call with US Trade Representative Jamieson Greer on Sunday.
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