Canada and Mexico could be temporarily spared from tariffs on some metals that will be part of a proclamation that President Donald Trump is expected to sign as early as Thursday.
The Washington Post reports the two North American nations would get a 30-day exception and that other countries may also enjoy exemptions from the tariff proposed on steel and aluminum imports.
Sources at the White House also said Trump’s controversial tariff plan could be put into action at a signing ceremony at 3:30 p.m. EDT (2030 UTC) Thursday.
Reuters quoted a senior U.S. official saying the measures would take place about two weeks after Trump signs the proclamation.
Lawmakers urge caution
Meanwhile Wednesday, a number of members of the House of Representatives sent a letter to the president, urging him to minimize negative consequences if he goes through with the tariff plan.
The letter said “tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer,” and “any tariffs that are imposed should be designed to address specific distortions caused by unfair trade practices in a targeted way while minimizing negative consequences in American businesses and consumers.”
The lawmakers went on to recommend that Trump exclude fairly traded products and products that do not pose a national security threat; announce a process for U.S. companies to petition for duty-free access to imports unavailable from U.S. sources; and allow exemptions for existing contracts for steel and aluminum purchases. They also recommended doing a short-term review of the effects of the tariffs on the economy to decide whether or not the approach is working.
The tariffs are expected to impose a duty of 25 percent on steel and 10 percent on aluminum imports that Trump says undermine U.S. industry with their low prices.
The comment that Canada and Mexico may be spared in the tariffs plan resulted in key stock indexes and the U.S. dollar paring losses in afternoon trading.
The Dow Jones industrial average, after falling more than 300 points during the session, closed off 83 points, a drop of one-third of 1 percent.
Market players say the Tuesday sell-off was sparked by the previous day’s announcement that the president’s chief economic adviser, Gary Cohn, was resigning. The former Goldman Sachs investment bank president had opposed the sweeping tariffs for foreign steel and aluminum.
‘Easy to win’
Trump boasted last week that trade wars “are good and easy to win” after his surprise announcement of the tariffs.
That has prompted widespread criticism from his Republican colleagues in Congress and America’s allies.
The president, according to staffers, acted on recommendations made by Commerce Secretary Wilbur Ross, formerly a billionaire investor, and Peter Navarro, an economist who is director of the White House National Trade Council.
Ross said the planned steel and aluminum tariffs were “thought through. We’re not looking for a trade war.”
The tariffs proposal has also won support from economic nationalists in the United States and some Democratic lawmakers in manufacturing states whose fortunes could be boosted by the tariffs protecting their metal industries.
‘Easy to lose’
The chief of the International Monetary Fund, Christine Lagarde, on Wednesday in a European radio interview, warned of a global trade war, predicting the U.S. tariffs could lead to “a drop in growth, a drop in trade, and it will be fearsome.”
Warning that there would be no victors in such a trade war, Lagarde urged “the sides to reach agreements, hold negotiations, consultations.”
European Council President Donald Tusk echoed Lagarde’s stance saying, “The truth is quite the opposite: Trade wars are bad and easy to lose. For this reason, I strongly believe that now is the time for politicians on both sides of the Atlantic to act responsibly.”
The European Commission, the executive arm of the 28-nation European Union, detailed retaliatory tariffs it plans to impose on prominent U.S. products if Trump carries out his plan to impose the metal tariffs, taxing Harley-Davidson motorcycles, bourbon, blue jeans, cranberries, orange juice and peanut butter.
Moody’s Investors Service said the planned tariffs “raise the risk of a deterioration in global trade relations.”
Trump said on Twitter that since former President George H.W. Bush was in the White House 30 years ago, “our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars.”
“Bad Policies & Leadership. Must WIN again!” Trump also said on Twitter.
Trump claimed the United States last year had a trade deficit of “almost 800 Billion Dollars,” significantly overstating the actual figure of $566 billion, which still was the biggest U.S. trade deficit in nine years.
A new report Wednesday said the U.S. trade deficit in January — the amount its imports exceeded its exports — reached $56.6 billion, the highest monthly total since October 2008.