SYDNEY (AP):

The United States appears set to grant Australia an exemption from its new tariffs on steel and aluminium imports following discussions between President Donald Trump and Prime Minister Malcolm Turnbull.

Trump last week exempted Canada and Mexico from the 25 per cent on steel and 10 per cent on aluminium and said US allies would have 15 days to negotiate possible exemptions.

That triggered a diplomatic offensive from Australia, including a letter to Trump signed by business leaders and former Australian golfing great Greg Norman, a Trump supporter and friend.

After a telephone call with Turnbull last Friday, Trump tweeted: "Spoke to PM @TurnbullMalcolm of Australia. He is committed to having a very fair and reciprocal military and trade relationship."

"Working very quickly on a security agreement so we don't have to impose steel or aluminium tariffs on our ally, the great nation of Australia!"

VERY PLEASED

Turnbull went a step further, telling reporters in South Australia yesterday that he was "very pleased the President was able to confirm that he would not have to impose tariffs on Australian steel and aluminium."

"Our trade relationship, as the president acknowledges, is a fair and reciprocal one," Turnbull said.

"It's a level playing field and, in fact, the US has a large trade surplus with Australia," said the Prime Minister.

According to statistics from Australia's Department of Foreign Affairs and Trade, the country's exports of steel to the US were worth $133.5 million in the 2016-2017 fiscal year and exports of aluminium to the US were worth $129.6 million during that time.

But even as Australia celebrated, European Union representatives were meeting yesterday to discuss the implications of the tariff and to seek clarity on whether they would be exempt.