Mexico, Canada may be exempted from tariffs
The White House said Wednesday that Mexico, Canada and other countries may be spared from President Donald Trump’s planned steel and aluminum tariffs under national security “carve-outs,” a move that could soften the blow amid threats of retaliation by trading partners and dire economic warnings from lawmakers and business groups.
Press secretary Sarah Huckabee Sanders told reporters the exemptions would be made on a “case by case” and “country by country” basis, a reversal from the policy articulated by the White House just days ago that there would be no exemptions from Trump’s plan.
The update came as congressional Republicans and business groups braced for the impact of expected tariffs of 25 percent on imported steel and 10 percent on aluminum, appearing resigned to additional protectionist trade actions as Trump signaled upcoming economic battles with China. Trump was expected to announce the tariffs this afternoon.
The looming departure of White House economic adviser Gary Cohn, a former Goldman Sachs executive who has opposed the promised tariffs, set off anxiety among business leaders and investors worried about a potential trade war.
“We urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers,” 107 House Republicans wrote in a letter to Trump.
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.
“He’s already indicated a degree of flexibility – I think a very sensible, very balanced degree of flexibility,” Commerce Secretary Wilbur Ross told CNBC. “We’re not trying to blow up the world.”
Trump signaled other trade actions could be in the works. In a tweet, he said the “U.S. is acting swiftly on Intellectual Property theft.” A White House official said Trump was referencing an ongoing investigation of China in which the U.S. trade representative is studying whether Chinese intellectual property rules are “unreasonable or discriminatory” to American business.
The official, who spoke on the condition of anonymity to discuss internal deliberations, said an announcement on the findings of the report – and possible retaliatory actions – was expected within the next three weeks.
Business leaders, meanwhile, continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the U.S. Chamber of Commerce raising the specter of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump’s rollback of regulations.