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Trump sticks to tariff level pledge even as he offers possible exemptions


By Jeff Mason, Richard Lough and Ben Blanchard

WASHINGTON/PARIS/(Reuters) - is 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 that could exempt and

has repeatedly 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 North American Free Trade Agreement (NAFTA) talks, which appear to be stalled.

"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," he told reporters at the beginning of a Cabinet meeting at the

Trump said he would announce the duties later on Thursday. The range of potential exemptions for allies and for industries has made the final outcome unpredictable.

The said he was pleased with progress in the NAFTA talks, although he again said he would still be willing to terminate the agreement, a threat he has made since he started running for office.

Few observers share Trump's rosy view of the NAFTA talks, which they say have made little progress since they started six months ago and are stalled over issues such as autos, an industry whose contribution to the U.S., Mexican and Canadian economies far outweighs that of and aluminium production.

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 the president, a fellow Republican.

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

"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

Speaking before Trump made his remarks, Canadian said 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 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.

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

The has said there could be a 30-day tariff exemption for and - 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.

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 Jonathan Oatis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 23:05 IST