U.S. metal tariffs: Mexico and Canada may be exempt, White House says

Michele Moreno
March 9, 2018

The White House said Trump was expected to make a final announcement by the end of the week and officials were working to include language in the tariffs that would give Trump the flexibility to approve exemptions for certain countries.

"There are potential carve-outs for Mexico and Canada based on national security and possibly other countries as well, based on that process", press secretary Sarah Huckabee Sanders said, hinting that Japan and other USA allies may be exempted from the controversial measure.

The tariff plan - which Trump followed up with a threat to impose "reciprocal taxes" on all imports from countries that charge duties on U.S. exports - also sent shivers through Republican leaders, whose party has traditionally embraced free trade.

Trump plans to impose a duty of 25 per cent on steel and 10 per cent on aluminium to counter cheap imports, especially from China, that he says undermine USA industry and jobs.

The European Union has warned it could retaliate on USA imports, including products such as motorbikes, bourbon and jeans.

The resignation of Gary Cohn, Mr Trump's chief economic adviser, appeared to signal the president's determination to impose steep tariffs on imported steel and aluminium.

They said the administration should also regularly review the measure to determine whether it is having the intended effect.

Earlier today, Ms Bishop said she had "no expectation" that Australia would be exempt from the import taxes but has since noted "a change in language" from the White House.

"We're comfortable that we're going to manage through this so that it is not detrimental to our growth projections", he told Fox Business.

The looming departure of White House economic adviser Gary Cohn, a former Goldman Sachs executive who has opposed the promised tariffs, set off anxiety among business leaders and investors anxious about a potential trade war.

Business leaders worry about the potential economic fallout from the tariffs, with Tom Donohue, president and CEO of the Chamber of Commerce, raising the specter of a global trade war.

The comment that Canada and Mexico may be spared in the tariffs plan resulted in key stock indexes and the USA dollar paring losses in afternoon trading.

"When it came to economic issues - and, to be frank, even beyond - he was our security blanket", one senior Republican aide said, pointing to active back channels between Capitol Hill and Cohn on policy issues, and a willingness, whether real or perceived, to effectively present congressional GOP concerns to a president whose policy positions and governing style many walking the halls of the Capitol still haven't quite figured out.

Members of Mr Trump's Republican party are concerned too, with House Speaker Paul Ryan saying he wanted to see tariffs that were "more surgical and more targeted".

Negotiators from the U.S., 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.

There is a glimmer of hope Australia may be able to secure an exemption from proposed USA steel and aluminium tariffs after the White House opened up some wriggle room on national security grounds.

Cohn was instrumental in putting together the sweeping tax law that was enacted last year, legislation that delivered a windfall to corporations and was the main policy achievement of Trump's first year in office.

Trump is pushing the tariffs as a national security necessity, but also as a way to revitalize the USA steel industry, which employs around 140,000 people. "So this is more than just pure economics".

Other reports by Insurance News

Discuss This Article