“We have an arrangement with the United States, and we are working within that arrangement,” Scott Morrison said, trying to take the heat out of a potentially damaging row.

The New York Times on Sunday reported that President Donald Trump’s administration had considered a tax on the multi-billion-dollar industry.

Australia supplies around six percent of US aluminium, a product used in everything from cans to aircraft parts.

Officials in Canberra had won an exemption on steel and aluminium tariffs last year, but some in Washington appear to have had second thoughts.

A levy on Australian goods would open up a new front it Trump’s trade wars and be embarrassing for Morrison’s recently re-elected government, which has touted close ties with the White House.

Australia’s ambassador to Washington, Joe Hockey, has been lauded at home as a “Trump whisperer” but is due to return home soon, to be replaced by former NSW state senator Arthur Sinodinos.

Morrison said his government was “working closely with the US officials and the White House on all those issues.”

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