by Levi J Parsons

SYDNEY, March 12 (Xinhua) -- Australian economists collectively gasped two weeks ago when U.S. President Donald Trump announced that Washington would impose a 25-percent tariff on steel products and a 10-percent barrier on aluminum imports.

As an outward-looking trading nation reliant on exports and heavily exposed to overseas risks, the thought that the United States may have fired the first shot in a global trade war was highly alarming for economic observers in Australia.

The Australian government managed to get an exemption from the controversial new policy, due to the "security" relationship between the two countries. While the outcome of the lobbying efforts proved successful, experts have warned that Australia might not be out of the woods just yet.

"At the moment it has worked out ok, but in the long term it's going to be a bad thing," Capital Economics' chief Australia and New Zealand economist Paul Dales told Xinhua.

"The issue is what happens in the future and whether this is the start of a steady escalation in tariffs and protectionism around the world because that would have huge implications for Australia."

"...If the U.S. were to force a shift that would see it become more closed and less open to business, Australia would lose out," Dales said.

In total, the executive order that excluded Australia from the price hikes may have saved Aussie industries around 210 million U.S. dollars in steel and a further 213 million U.S. dollars in aluminium exports that are shipped to the United States every year.

Australia's largest steel exporter to the United States, BlueScope, who has over 3 billion U.S. dollars of assets in the United States along with more than 3,000 workers, has remained tight-lipped and cautious about the recent events.

"We've argued for a fair treatment of our important manufacturing businesses for almost 12 months now, and we've been supported superbly by the Prime Minister, the Trade Minister (Steve) Ciobo, the Department of Foreign Affairs and Trade and the ambassador on the ground in Washington," BlueScope Chief Executive Officer Mark Vassella said.

"There's a clear recognition about Australia's status as an ally and our four-to-one trade surplus in America's favor."

The speculation and uncertainty of the past two weeks however has wreaked havoc on the company's ASX share price, falling almost 9.5 percent from a high of 16.78 cents (AUD) to 15.19 cents (AUD).

But on Monday investors breathed a sigh of relief after news of Friday's exemption lifted the stock around 4 percent at the open, to begin the session at 15.88 cents (AUD).

CMC Markets' chief market strategist Michael McCarthy has warned that although there has been a reprieve for Australian companies, "there are still significant risks."

"The reality is that if China, the U.S. and Europe are involved in a trade war everyone is going to get hurt," he said.

Some also fear that other nations stung by the U.S. tariffs may look to dump steel products on Australian shores to drive the price down.

But Prime Minister Malcolm Turnbull was quick to dispel the concerns, telling reporters on Monday that Australia has beefed up laws to deal with the problem.

"We've given our Anti-Dumping Commission stronger powers, we have given them more money," he said.

Turnbull also made the announcement that despite Australia's opposition to protectionism, due to the exemption granted by Washington, the government would not join any other nations that may decide to legally challenge the tariffs.

"I know there's been speculation in the media about action being taken by other countries in the World Trade Organization about the U.S. steel and aluminium tariffs," Turnbull said.

"As a country that will be exempt from those tariffs, we don't have a basis to bring a complaint," he said.