Exemption denial creates uncertainty for steel sector

WHAT ARE TARIFFS AND HOW IS AUSTRALIA INVOLVED?

* A tariff is a tax on a good from another country

* US President Donald Trump will impose a 25 per cent tariff on all steel and aluminium imports from Wednesday afternoon Australian time

* This echoes Mr Trump's first term, when he imposed a 25 per cent tariff on steel and a 10 per cent tariff on aluminium exports

* Australia received an exemption from tariffs during Mr Trump's first term because then-prime minister Malcolm Turnbull successfully argued we import more from the US than we export

* But this time, there will be no exemptions for any country, including Australia, in a US bid to gain the full benefit of the tariffs

WHY IS THE US IMPOSING TARIFFS?

* The president has argued the tariffs will protect America's steel and aluminium makers from foreign competition and encourage growth, revenue and investment for its domestic industries

HOW WILL THIS IMPACT AUSTRALIA?

* Australia sends about $800 million worth of steel and aluminium to the US every year

* Australia could redirect its aluminium and steel exports to other markets, according to University of Sydney economics expert Vladimir Tyazhelnikov

* The burden of the tariffs will mostly be borne by American consumers and will have a minimal impact on Australian steel, according to Australian Steel Association chief executive David Buchanan

* Australian Constructors Association chief executive Jon Davies says the tariffs create uncertainty for the sector and could lead to a rise in costs associated with steel products, which would impact construction prices

* The measures could also reduce trade and harm both businesses and consumers, the Australian Chamber of Commerce and Industry says

WHAT ARE THE NEXT STEPS?

* The federal government will keep pressing Australia's case for an exemption

* Australia could work with other like-minded allies and partners, such as Japan, to try to provide economic stability and business certainty to the region