WRAPUP 8-Trump sticks to tariff level pledge as Mexico, Canada reject pressure

From Reuters - March 8, 2018

WASHINGTON/SANTIAGO (Reuters) - President Donald Trump was set to press ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum, although he said on Thursday he was willing to strike a deal that could exempt Canada and Mexico.

Trump has offered relief from steel and aluminum tariffs to countries that treat us fairly on trade, a gesture aimed at putting pressure on Canada and Mexico to give ground in separate talks on the North American Free Trade Agreement (NAFTA), which appear to be stalled.

Mexico rejected the linkage to NAFTA in robust terms on Thursday. Mexican Economy Minister Ildefonso Guajardo toldReuters, Under no circumstance will we be subject to any type of pressure. Canadian Trade Minister Francois-Phillippe Champagne told Reuters his country would not accept any duties or quotas from the United States.

Trumps unexpected announcement of the tariffs last week roiled stock markets as it raised the prospect of an escalating global trade war. He appeared to have conceded some ground after a campaign by legislators from his own Republican party, industry groups and Americas allies abroad.

Im sticking with 10 and 25 (percent) initially. Ill have a right to go up or down, depending on the country, and Ill have a right to drop out countries or add countries, the president told reporters at the beginning of a Cabinet meeting at the White House.

Trump was due to announce the duties at 3.30 p.m. ET (2030 GMT), although the range of potential exemptions for allies and for industries has made the final outcome unpredictable.

The president said he was pleased with progress in the NAFTA talks, although he repeated that he would be willing to terminate the agreement. The talks were launched after Trump took office last year saying that if the pact was not negotiated to better serve American interests, Washington would leave.

Many observers take a dimmer view of six-month-old talks, saying little progress has been made and the negotiations are stalled over issues such as autos. Car manufacturings contribution to the U.S., Mexican and Canadian economies far outweighs that of steel and aluminum production.

In addition to possible exemptions to the steel and aluminum tariffs, there could be a consultation period that would lead to intense lobbying by industry and a growing group of disgruntled Republican lawmakers.

Several major trading partners have said they will respond to the tariffs with direct action.

If Donald Trump puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond, European Financial Affairs Commissioner Pierre Moscovici said.


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