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Trump promises U.S. friends "flexibility" as trade war warnings rise


By Susan Heavey, Richard Lough and Ben Blanchard

WASHINGTON/PARIS/(Reuters) - offered the prospect of relief from and aluminum tariffs to countries that "treat us fairly on trade" on Thursday, a gesture apparently aimed at renewing pressure on and to give ground in separate trade talks.

Trump was expected to sign a proclamation imposing 25 percent tariffs on imports and 10 percent on aluminum on Thursday, but this could slide into Friday. The range of potential exemptions for allies and for industries has made the final outcome unpredictable.

In addition to exemptions, there could be a consultation period that would lead to intense lobbying by industry and a growing group of disgruntled Republican lawmakers who oppose the tariffs proposed by their fellow Republican

"We have to protect & build our and Aluminum 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," Trump said in a post on

Talk of tariffs has raised the prospect of a global trade war and hit stock markets hard. Both the and have said they would retaliate against action by the United States, as have and The U.S. neighbors are engaged in so far fruitless talks with to renegotiate the Agreement.

"If puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond," said.

Counter-measures would include European tariffs on U.S. oranges, tobacco and bourbon, he said. motorcycles have all been mentioned, targeting the home state of

"We want to understand that this would be a lose-lose situation," Moscovici told

Canadian sought to strike a soothing tone on Thursday, saying there was a "level of confidence" that the country's close relationship with the will protect it from U.S. tariffs.

Trudeau's negotiators in the NAFTA talks have rejected the American proposals to link the tariffs and the trade talks, and an attempt by to split and has also been rejected.

Even as Trump threatened tariffs and his NAFTA partners, 11 nations gathered in to sign a landmark trade pact, one that Trump withdrew from on his first day in office in January last year.

Trump, who won office after a career in and reality TV, has long touted an economic nationalism, promising to bring back jobs to and save the country from trade deals he views as unfair. That has put him at odds with many in his


Beijing, which until now had kept largely silent on the issue, sharpened its rhetoric significantly. One lever that has is U.S. agricultural exports and it has said in the past that it could target soybeans.

"Especially given today's globalization, choosing a trade war is a mistaken prescription. The outcome will only be harmful," said on the sidelines of an annual meeting of "China would have to make a justified and necessary response."

China had a record $375.2 billion goods surplus with the last year.

Trade tensions between the world's two largest economies have risen since Trump took office, and although China accounts for only a small fraction of imports, its massive industrial expansion has helped create a global glut of steel that has driven down prices.

has faced growing opposition to the tariffs from prominent congressional Republicans and business leaders worried about their potential impact on the

The has said there could be a 30-day tariff exemption for Mexico and Canada - and some other countries - based on national security..

A linked any extension of the exemption to progress in the talks to renegotiate NAFTA. The talks were launched last year after Trump said would withdraw from the 1994 if it were not reworked to better favor American interests.

In Brussels, Vice said U.S. would be bad for itself.

"We don't need to go to the 1930s. It's enough to go to the beginning of the 2000s when the U.S. authorities imposed for It meant in practice that in the U.S. they lost thousands and thousands of jobs," Katainen said.

Most economists and trade specialists say they doubt the steel and aluminum tariffs alone would trigger a global trade war, but point to the risk of further U.S. measures against China as a major tipping point. Trump has also threatened to impose hefty tariffs on European if the EU does take retaliatory measures.

(Additional reporting by Michael Martina, Elias Glenn, Kim Coghill, Brian Love, Nichola Saminather, Doina Chiacu and Andrea Hopkins; Writing by and David Chance; Editing by and Frances Kerry)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 21:37 IST