U.S. vows ‘flexibility’ to ‘real friends’ in tariff row

The U.S. would offer temporary relief to Canada and Mexico for 30 days, according to reports

March 08, 2018 09:32 pm | Updated December 01, 2021 12:36 pm IST - Washington

 U.S. President Donald Trump had threatened to impose tariffs on imports of cars made in Europe.

U.S. President Donald Trump had threatened to impose tariffs on imports of cars made in Europe.

President Donald Trump pledged on Thursday the United States will show “flexibility’ to “real friends” as the White House prepares to roll out steel and aluminum tariffs that have sparked fears of a global trade war.

Mr. Trump’s impromptu announcement he intends to slap 25% import taxes on steel and 10% on aluminium, has sparked a revolt within his own Republican party, pushed a top aide to quit, and angered major trading partners who vowed retaliation.

The proposed duties — which have already roiled world markets for days — are to be formalised at a signing ceremony on Thursday, and Canada and Mexico will initially be exempt according to Mr. Trump’s top trade advisor Peter Navarro.

“We have to protect & build our steel and aluminium Industries while at the same time showing great flexibility and cooperation toward those that are real friends and treat us fairly on both trade and the military,” the president tweeted — saying he was “looking forward” to the 3:30 pm White House meeting.

Administration big guns Commerce Secretary Wilbur Ross and Treasury Secretary Steve Mnuchin rushed to calm market jitters on Wednesday over the tariff plans, which they indicated were still negotiable and would not hurt growth.

The U.S. would offer temporary relief to Canada and Mexico for 30 days, the Washington Post reported citing senior U.S. officials, breaks that could be extended depending on progress in the ongoing North American Free Trade Agreement negotiations.

But Brussels warned against letting individual European states off the hook — such as Washington’s close ally Britain — saying any such exemption would be viewed as applying to the whole bloc.

EU hits back

European Commission Vice President Jyrki Katainen said Brussels would not accept a carve-out for Britain, which has voted to leave the EU but remains a member until 2019. “What I have read today is that they are probably considering some exemptions to NAFTA countries... but also they have mentioned the U.K. and maybe some other countries,” Mr. Katainen said.

“So if they try to make (an) exemption for one of our member states it means the EU as a whole.”

The EU had already sounded a stern warning on Wednesday as it readied to lash back with U.S.-targeted tariffs of its own on everything from steel to peanut butter, orange juice, cranberries, bourbon and denim jeans.

Data released Wednesday showed the U.S. foreign trade deficit widened in January to its highest level in nine years -- heaping pressure on Trump, who had campaigned on a promise to reverse that trend.

WB sounds note of caution

Meanwhile, the chief executive of the World Bank urged Mr. Trump on Thursday to be “careful” before imposing controversial steel and aluminium tariffs, warning that they could affect global trade.

Kristalina Georgieva said Mr. Trump should “assess the implications” before going ahead with a plan that has sparked fears of a trade war with China and Europe. The Bulgarian said that her message to Mr. Trump was to make a “careful assessment before taking any further step.”

“If you take a step for a reason then you need to project on a couple of steps for the implications," Mr, Georgieva said.

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