Australia steels for Trump tariff decision

Odyssey Asset Management Group Economist Enzio Von Pfeil weighs in on President Trump’s steel and aluminum 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.

Trump used his executive powers - evoking national security risk - to apply tariffs of 25 per cent on steel and 10 per cent to aluminium but said there would be a 15 day window for nations to make an appeal for exemptions.

Speaking earlier at a Cabinet meeting at the White House, Mr Trump singled out Australia when he said he may exempt countries with which the United States has good trade and military relationships.

"We're going to hold off the tariff on those two countries, to see whether or not we're able to make the deal on NAFTA", Trump said.

Canadian Finance Minister Bill Morneau and Foreign Affairs Minister Chrysta Freeland both said last week that Canada was requesting an exemption to the tariffs, citing the interdependent nature of the North American aluminum market, but they were clear the government is willing to retaliate if need be.

Instead, he said the tariffs would help American workers and there wouldn't be mass layoffs in industries that use cheaper steel and aluminum.

The president has said the tariffs are needed to reinforce lagging American steel and aluminum industries and protect national security.

"Thank you for confirming new tariffs won't have to be imposed on Australian steel & aluminium - good for jobs in Australia and in U.S.!" said the Australian premier as he retweeted the U.S. president's tweet.

The prospect of across-the-board tariffs that would affect both America's allies and nations with massive USA trade surpluses made some in the White House uneasy, especially chief economic adviser Gary Cohn, who announced his resignation this week.

Mr Trump has also demanded concession from the European Union, complaining that it treated American cars unfairly and has threatened to hike tariffs on vehicle imports from Europe.

In imposing the tariffs, Trump broke with many members of his own party, none of whom joined him for the event at the White House.

China's exports surged and its trade surplus unexpectedly widened in February, illustrating the lopsided nature of global commerce that Donald Trump is preparing to introduce protectionist measures against.

In a tweet, he said the " acting swiftly on Intellectual Property theft". "It's been an assault", Trump said at the White House. The president's top economic adviser, Gary Cohn, announced his impending resignation shortly after Mr. Trump announced the tariffs. "We are sending a mutual signal that we recognise the policy orthodoxy of trade". You don't have steel.

The United States is the largest steel importer in the world and the order could hit South Korea, China, Japan, Germany, Turkey and Brazil the hardest.

Trump's declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the United States withdrew from a year ago. Both countries had warned of retaliatory measures if they were not exempt.

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