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Trump to offer Canada and Mexico temporary exemption from steel tariffs, aide says

Don Lee, Tribune Washington Bureau on

Published in News & Features

WASHINGTON -- President Donald Trump's controversial plan to levy hefty tariffs on imported steel and aluminum will initially exempt Canada and Mexico and give other trading partners a short window to seek exclusions from the measure, according to one of the president's trade advisers.

The aide, Peter Navarro, said Trump's tariff proclamation is set to be formally issued Thursday afternoon, with the president signing the order in the Oval Office surrounded by U.S. metal industry workers.

It was unclear how long the temporary exemption for Canada and Mexico would last, but Navarro told Fox News on Thursday night that the tariffs -- 25 percent on steel and 10 percent on aluminum -- would take effect in 15 to 30 days.

He said Mexico and Canada, both major exporters of steel and aluminum to the U.S., would be able to avoid the tariffs for good if they made a "great deal" in renegotiating the North American Free Trade Agreement.

The Trump administration is separately trying to rewrite NAFTA, but talks have progressed slowly. Both Mexico and Canada have balked at Trump's move to link the NAFTA renegotiations with the impending tariffs.

NAFTA, a 24-year-old pact among the three nations, eliminated duties on almost all goods traded among the countries, as well as opening up investments and other commercial activities.

Trump's original announcement a week ago called for blanket tariffs on metals, but the White House has been backpedaling in the wake of vigorous opposition to such protectionism from congressional Republicans, U.S. businesses and many economists.

Instead of across-the-board tariffs, some have argued for targeted measures to address the problem of a global glut of steel that is rooted in China's overproduction.

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The Trump plan has also frayed relations with America's closest allies, particularly Canada, the biggest supplier of steel and aluminum to the U.S., as well as the European Union. The EU has drafted a plan to retaliate and challenge the measure with the World Trade Organization.

The Trump administration is taking the tariff action after concluding that a rise in imports of the metals poses a threat to U.S. national security -- the first time in more than three decades that a U.S. president has justified sweeping trade restrictions on that basis.

Others besides the EU will likely join in contesting the tariffs with the WTO, the international arbiter of trade disputes, but there is practically no legal precedence on such cases. And at any rate, a decision-and-appeal process could take years to work through the WTO process.

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