President Donald Trump is to press ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum, although he said on Thursday he was willing to strike a deal that could exempt Canada and Mexico.
Washington has repeatedly offered relief from steel and aluminum tariffs to countries that “treat us fairly on trade” a gesture aimed at putting pressure on Canada and Mexico to give ground in separate North American Free Trade Agreement (NAFTA) talks, which appear to be stalled.
“I’m sticking with 10 and 25 (percent) initially. I’ll have a right to go up or down, depending on the country, and I’ll have a right to drop out countries or add countries,” he told reporters at the beginning of a Cabinet meeting at the White House.
Trump said he would announce the duties later on Thursday. The range of potential exemptions for allies and for industries has made the final outcome unpredictable.
The president said he was pleased with progress in the NAFTA talks, although he again said he would still be willing to terminate the agreement, a threat he has made since he started running for office.
Few observers share Trump’s rosy view of the NAFTA talks, which they say have made little progress since they started six months ago and are stalled over issues such as autos, an industry whose contribution to the U.S., Mexican and Canadian economies far outweighs that of steel and aluminum production.
In addition to exemptions, there could be a consultation period that would lead to intense lobbying by industry and a growing group of disgruntled Republican lawmakers who oppose the tariffs proposed by the president, a fellow Republican.
Talk of tariffs has raised the prospect of a global trade war and hit stock markets hard. Both the European Union and China have said they would retaliate against action by the United States, as have Mexico and Canada.
“If Donald Trump puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond,” European Financial Affairs Commissioner Pierre Moscovici said.
Countermeasures would include European tariffs on U.S. oranges, tobacco and bourbon, he said. Harley Davidson Inc motorcycles have also been mentioned, targeting House of Representatives Speaker Paul Ryan’s home state of Wisconsin.
Speaking before Trump made his remarks, Canadian Prime Minister Justin Trudeau said there was a “level of confidence” that the country’s close relationship with the United States will protect it from U.S. tariffs.
Trudeau’s negotiators in the NAFTA talks have rejected the American proposals to link the tariffs and the trade talks, and an attempt by Washington to split Canada and Mexico has also been rejected.
Even as Trump threatened tariffs and his NAFTA partners, 11 nations gathered in Chile to sign a landmark Asia-Pacific trade pact, one that Trump withdrew from on his first day in office in January last year.
Trump, who won office after a career in real estate and reality TV, has long touted an economic nationalism, promising to bring back jobs to the United States and save the country from trade deals he views as unfair. That has put him at odds with many in his Republican Party.