Trump grants tariff exemptions for Mexico and Canada

Dow Jones

Canada supplies more than a sixth of all the steel that the USA uses and more than 40 per cent of its aluminum.

The White House is preparing to announce tariffs on imported steel and aluminum that would offer temporary exemptions to Canada and Mexico, a shift that could soften the blow amid threats of retaliation by trading partners. However, some economists fear that Trump will set off a wave of reprisal tariffs that will eventually damage the steel and aluminium industries in all countries.

"The American steel and aluminium industry has been ravaged by aggressive foreign trade practices". It's really an assault on our country.

Traders also were encouraged by news Mr Trump might meet North Korean leader Kim Jong-un. He was joined by steel and aluminum workers holding white hard hats.

Trump's authority to establish the tariffs stems from a Commerce Department investigation that found that imports of the metals pose a risk to national security.

"Today I'm defending America's national security by placing tariffs on foreign imports of steel and aluminium", he added.

"If you put tariffs against what are your allies, one wonders who the enemies are", European Central Bank President Mario Draghi said at a press conference in Frankfurt. The tariffs, which will come into force within 15 days, are expected to lead to retaliation from the European Union and other steel producers and heighten fears of a trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump's rollback of regulations.

"We are an ally, not a threat", Katainen said.

The president suggested in the meeting with his Cabinet that Australia and "other countries" also might be spared, a shift that could soften the worldwide blow amid threats of retaliation by trading partners.

More important, the Trump administration has repeatedly dropped the ball on efforts that might have succeeded in prompting China to curb production, something that would have benefited not just the United States but also allies that are now threatening to retaliate by imposing tariffs on American goods and services.

Sen. Orrin Hatch told reporters he thought Congress could stop the tariffs from being implemented.

The proclamation signed by Trump ordering the tariffs do suggest some possible grounds for exemptions based off the specific reasons listed for excluding Canada and Mexico.

Several Republicans and White House Economic Adviser Gary Cohn, however, have raised concerns about instituting such stiff tariffs on steel and aluminum imports. That inquiry, called a Section 232 investigation after of the portion of the Trade Expansion Act of 1962 where it is authorized, concluded earlier this year with a recommendation that the administration impose sanctions to protect the industries. "Steel is steel. If you don't have steel, you don't have a country".

The British steel industry could be badly hit by the tariffs, with trade body UK Steel saying the tariffs could have a "profound and detrimental impact".

President Trump claims that the United States has suffered from "unfair trade" and that the tariffs will boost the domestic market. "So they charge us 50, we would charge them 50", Trump added.

That left it with a trade surplus of $33.74 billion for the month, and a January-February trade surplus with the United States of $42.92 billion.

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