Trump may exempt more countries from tariffs: Treasury's Mnuchin

Remigio Civitarese
Marzo 13, 2018

When Trump announced Thursday that he was slapping tariffs of 25 percent on imported steel and 10 percent on aluminum, he temporarily exempted big steel producers Canada and Mexico - provided they agree to renegotiate a North American trade deal to his satisfaction. While China accounts for just a small portion of US imports, the Trump administration has said it diverts its shipments of the metals through other countries on the way to the U.S.

Being forced to rule on the Trump tariffs "would put the WTO in a tough spot", DeBusk says.

Another prominent Republican critic of the proposal, House of Representatives Speaker Paul Ryan, returned to the attack on Tuesday, saying the proposed duties of 25 percent on steel and 10 percent on aluminum were too broad.

White House officials even say the specifics of the plan remain fluid and it's unclear when they will be finalized.

But business experts, including Paul Isely, associate dean for the Grand Valley State University Seidman College of Business, said the tariffs will also drive up the cost of the products - not just overseas, but also in the United States. "So how do we make sure that we tackle those things and be forceful and forthright without setting off a needless trade war?"

Opponents charge that the tariffs could destroy more jobs than they create, risk alienating U.

While Trump has tweeted that he will show flexibility to countries that treat the USA fairly on trade a military issues, it seems with this administration, anything can change. As a presidential candidate, Trump had campaigned against NAFTA as a job-killing disaster that he said encouraged American companies to move factories to Mexico to exploit cheap labor.

Liu He, President Xi Jinping's top economic adviser who met with Cohn in Washington last week, told delegates at the National People's Congress in Beijing that both sides had expressed a desire to avoid a trade war, according to the Beijing Youth Daily.

Trump predicted the former Goldman Sachs executive would eventually return to his administration.

At the White House, officials were working to include language in the tariffs that would give Trump the flexibility to approve exemptions for certain countries. "We're not trying to blow up the world".

"If the USA hits its strategic allies such as Canada with measures, they are missing the appropriate target and they expose their economy to serious adverse effects that are greater than the expected gains", said Simard.

Although the Conference Board of Canada is suggesting the overall decline in the Canadian economy will only be about.5 percent, it cautions that this is an optimistic forecast that doesn't consider the potential full impact of tariffs and other trade barriers.

"Many members said they had fears of tit-for-tat retaliation which could spiral out of control", the trade official told reporters.

The president is now fighting trade offensives on multiple fronts, from targeting strategic rival China to angering allies like Canada and the European Union with threats to erect fresh barriers. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump's rollback of regulations.

Gagnon said the proposed tariff is of great concern, especially for Kitimat's BC Works, which exports 50 per cent of its production to the U.S.

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