Australia to escape tariffs: US official

Donald Trump's top trade official has confirmed Australia, Europe, South Korea, Canada, Mexico, Argentina and Brazil will initially escape the US president's soon-to-be introduced steel and aluminium tariffs.

US Trade Representative Robert Lighthizer, during testimony on Thursday before the Senate Finance Committee in Washington DC, named Australia on the list of allied nations to at least initially escape the 25 per cent tariff on imported steel and 10 per cent on aluminium that come into force on Friday.

"We have the two NAFTA countries (Canada and Mexico), we have Europe, Australia, we have Argentina, we have Brazil and obviously Korea," Mr Lighthizer told the committee.

Mr Lighthizer said he planned to decide by the end of April the countries that will get long-term exemptions, something Australia is expecting to receive after intense lobbying led by Prime Minister Malcolm Turnbull during his recent visit to the White House.

However, fears of a US-China trade war with negative global ramifications increased on Thursday when Mr Trump took the first steps toward slapping tariffs on $US60 billion in Chinese goods.

World stock markets plummeted, with the Dow Jones plunging 724.42 points and shares of US airline manufacturer Boeing, likely to be a victim of retaliatory trade action from China, dropping 5.2 per cent.

Mr Lighthizer will announce within 15 days a proposed list of Chinese products that could be hit by US tariff increases.

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