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Trump may exempt Mexico, Canada from US tariffs on steel, aluminum

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The White House said Wednesday that President Donald Trump may exempt Canada, Mexico and other countries from stiff tariffs on imports of steel and aluminum that he is expected to sign this week.

"There are potential carve-outs for Mexico and Canada based on national security and possibly other countries as well, based on that process," White House Press Secretary Sarah Huckabee Sanders told reporters, a reversal from the policy articulated by the White House just days ago that there would be no exemptions from Trump's plan.

"That would be case-by-case and country-by-country basis, but it would be determined whether or not there is a national security exemption," she said at a press briefing.

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

"He's already indicated a degree of flexibility, I think a very sensible, very balanced degree of flexibility," Commerce Secretary Wilbur Ross told CNBC.

Trump announced last Thursday that the United States is set to impose 25 percent of tariff on steel imports and 10 percent for aluminum.

He also tweeted on Friday: "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win."

Trump's tariff plan has sparked worldwide criticism and retaliatory intentions from its allies.

US tariffs could cause "drastic consequences" for the German and European steel industry, German Steel Federation warned on Wednesday.

Even though German steel exports to the United States are comparatively low, Trump's proposal still threatens to divert a large amount of steel and cause a spiral into protectionism, German news agency dpa quoted federation president Hans Juergen Kerkhoff as saying.

Kerkhoff said that he hopes to avoid trade diversions and that now is the time to make quick decisions.

The European commissioners on Wednesday gave political endorsement to a proposal presented by European Commission President Jean-Claude Juncker, Vice-President Jyrki Katainen and Commissioner for Trade Cecilia Malmstrom which is aimed at countering the possible US tariffs.

"The motivation behind the US measures appears to be an economic safeguard measure in disguise - not a national security measure," Malmstrom said at a press conference.

"That means that the European Union (EU) is entitled to make use of the WTO (World Trade Organization) Safeguards Agreement to rebalance benefits that we have given to the United States in the past. This would be done by carrying out measures that match the economic loss suffered by us because of the US move," she added.

An earlier report by the Politico Europe, a Brussels-based European affairs weekly newspaper, said the EU is ready to roll out countermeasures against US exports worth 2.8 billion euros (3.48 billion US dollars), including Levi's jeans, Harley-Davidson motorbikes and bourbon whiskeys.

Malmstrom confirmed that the EU has prepared a list of products including a number of steel products, agricultural products and consumer goods, for imposing reciprocal tariffs if needed.

"Certain types of bourbon are indeed on the list as are other items such as peanut butter, cranberries, orange juice etc," she said.

But the commissioner still hoped that "as a US security partner, the EU would be excluded" from the US tariffs target.

"We also hope to convince the US administration that this is not the right move. Protectionism cannot be the answer, it never is," she added.

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