Malcolm Turnbull could be the "best-placed leader in the world" to navigate Donald Trump's proposed tariff hike, his treasurer says.
Thousands of Australian and US jobs could be affected if the US President keeps his promise to hike steel tariffs, which Mr Turnbull wants an exemption from.
"Australians can see the prime minister has a keen handle on what is occurring in the United States and is probably better placed than anyone I think to best read the situation," Treasurer Scott Morrison told reporters on Wednesday.
"He has worked hard on that relationship.
"Right now our prime minister is one of, if not the best-placed leader in the world today to understand how best to respond to what's happening."
Mr Turnbull recently visited Washington in a bid to encourage trade, but Australia is not exempt from US plans to impose a global 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports.
Foreign Affairs Minister Julie Bishop is in New York urgently seeking a meeting with US Secretary of State Rex Tillerson to raise concerns about the tariff hike.
Opening a new front in the global battle to fight the tariff rise, Mr Turnbull said hiking prices on Australian steel would make it more expensive to build houses in the US.
BlueScope ships Australian steel to the US west coast to make into roofing products because of the high cost of freight from the east coast.
"The consequence of imposing a tariff on Australian steel to the west coast would be simply putting up the price of building in California," Mr Turnbull told the Financial Review Business Summit in Sydney.
"A trade war is a race to the bottom that makes us all poorer, leaves our citizens with less choice and fewer opportunities."
BlueScope chief executive Mark Vassella was at the AFR summit with the prime minister, who he said had "worked really hard" to get an exemption.
"We've put a really solid case. We've got 3000 employees in North America, $3 billion of assets. Whether an exemption is given is really out of our control," Mr Vassella said at the summit.
Reserve Bank governor Philip Lowe earlier told the summit the US tariffs proposal was "highly regrettable" and bad policy.
"If it is confined to the tariffs on steel and aluminium it is manageable for the world economy," Dr Lowe said.
"(But) if we see retaliation and counter-retaliation, this could turn into a very big shock to the global economy."
Vice President Mike Pence said in a speech in Iowa the US was cracking down on "unfair trade practices".
"The United States has been taken advantage of for too long, by too many countries, when it comes to trade," Mr Pence said.
Australian Associated Press