President Donald Trump could exempt some nations when he formalises tariffs on imported steel and aluminium amid threats of retaliation from US trading partners and warnings from his own party that the move will hurt American businesses and consumers.
The administration will initially exclude Canada and Mexico from the tariffs, an exemption they would lose if they can’t agree to an updated North American Free Trade Agreement with the US, White House trade adviser Peter Navarro said on Wednesday. Other American allies could use a similar system to ask for an exemption, he said.
If Nafta talks fail, Canada and Mexico would face the same tariffs as other nations, Navarro added.
While the order to establish the tariffs was earlier expected to be signed yesterday, a person familiar with the planning said it would likely be pushed back to allow more time to prepare the legal documents. The White House schedule for Thursday did not list a tariff announcement.
The decision-making process regarding the tariffs has evolved and more changes could be made before the president formally approves them.
Other nations have threatened reprisals, and tensions are escalating. Yesterday, China’s foreign minister, Wang Yi, vowed a “justified and necessary response” to any efforts to incite a trade war. It was the Chinese government’s most forcible response yet to the new tariffs.
Wang, who spoke on the sidelines of the National People’s Congress in Beijing, urged the US to work with China on a mutually beneficial solution.
“A trade war has never been the right way to solve the problem, especially under globalisation,” Wang said. Such a conflict “will only harm everyone and China will surely make a justified and necessary response.”
Canada, the biggest supplier of steel and aluminium to the US, and No 4 steel-provider Mexico have asked to be exempted, and both have indicated they’ll retaliate if Trump includes them in the duties.
The US may exempt countries from the duties based on national security considerations, White House Press Secretary Sarah Huckabee Sanders said on Wednesday. She didn’t comment on how those determinations would be made and or which countries would qualify.
“There are potential carve-outs for Canada and Mexico based on national security and possibly other countries as well,” Sanders told reporters at the White House. “That would be a case-by-case and country-by-country basis.”
Negotiators from the US, Canada and Mexico wrapped up the seventh round of Nafta talks this week in Mexico still hoping for a breakthrough on the biggest sticking points. The president hinted at the tariff incentive in a tweet earlier this week, without elaborating on how the trade-off would work.
Trump has said he’s determined to impose a 25% tariff on steel imports and 10% on aluminium to protect national security. The plan has been widely criticised by Republicans, panned by corporate America, shaken global financial markets, and prompted the resignation of Trump’s top economic adviser, Gary Cohn, this week.
More than 100 House Republicans, led by Ways and Means Committee Chairman Kevin Brady, urged Trump on Wednesday to reconsider broad tariffs, warning that they would cost American jobs, raise prices for consumers and hurt domestic manufacturing. Pages 4, 8
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