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Trump says he'll stick to tariff levels; AP reports Canada and Mexico exempted


By Jeff Mason, and

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

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

The Associated Press, citing sources outside the White House, reported that and had been exempted from the tariffs indefinitely and other countries had been invited to negotiate. That drove the Mexican peso and stocks higher and bolstered the Canadian dollar and stocks.

has rejected any linkage to NAFTA in robust terms on Thursday. Mexican Minister told Reuters, "Under no circumstance will we be subject to any type of pressure." Canadian told his country would not accept any duties or quotas from the

Trump's 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 America's allies abroad.

"I'm sticking with 10 and 25 (percent) initially. I'll have a right to go up or down, depending on the country, and I'll have a right to drop out countries or add countries," the told reporters at the beginning of a Cabinet meeting at the

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.

U.S. stock markets added to small earlier gains after the AP report. <.SPX> <.DJI>

The 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, 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 manufacturing's contribution to the U.S., Mexican and Canadian economies far outweighs that of and aluminium production.

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

Countermeasures would include European tariffs on U.S. oranges, tobacco and bourbon, he said. motorcycles have also been mentioned, targeting Paul Ryan's home state of


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

Both Guajardo and Champagne were speaking to on the sidelines of the signing ceremony in

Trump, who won the after a career in and reality TV, has long touted an economic nationalism, promising to bring back jobs to the 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 "would have to make a justified and necessary response."

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 accounts for only a small fraction of imports, its massive industrial expansion has helped create a global glut of that has driven down prices.

The has said there could be a 30-day exemption for and - and some other countries - based on national security. A linked any extension of the exemption to progress in the NAFTA talks..

Most economists and trade specialists say they doubt the and aluminum tariffs alone would trigger a global trade war, but point to the risk of further U.S. measures against 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: Fri, March 09 2018. 02:06 IST