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U.S. eases way to more tariff exemptions under pressure from allies


By Dunsmuir, Robin and Ruby Lian

WASHINGTON/BRUSSELS/SHANGHAI (Reuters) - The opened the way for more exemptions from its and aluminum tariffs on Friday, after pressure from allies and intense lobbying from lawmakers, further diluting the measures just a day after they were formally announced.

Donald Trump, who has broad powers to impose the tariffs of 25 percent on imports and 10 percent on aluminum, at the outset granted exemptions to and Mexico, and said there would be the possibility of industry exemptions, although he has not been specific.

After Trump opened the door, Brazil, Japan, South Korea, and clamored for special treatment, while Chinese producers called on to retaliate in kind.

Trump tweeted on Friday that he spoke with Australian about trade and military cooperation. "Working very quickly on a security agreement so we don't have to impose or aluminum tariffs on our ally, the great nation of Australia!" Trump said.

earlier said he expects countries in addition to and to be exempted in the next couple of weeks.

When proposed tariffs were initially announced, stock markets went into a tail spin on concerns they would ignite a global trade war. But since Trump signaled that exemptions were possible, reaction has been measured, and counter threats have been carefully calibrated so far.

Those threats have been overblown, according to Dani Rodrik, at and one of the world's leading experts on trade.

"The reality is that Trump's trade measures to date amount to small potatoes. In particular, they pale in comparison to the scale and scope of the protectionist policies of in the 1980s," Rodrik wrote on Friday.


Tokyo and rejected any suggestion that their exports to the threatened the country's national security - Trump's justification for imposing the tariffs despite warnings at home and abroad that they could provoke a global trade war.

"We are an ally, not a threat," Vice said.

China's metals industry issued the country's most explicit threat yet in the row, urging the government to retaliate by targeting U.S. coal - a sector that is central to Trump's political base and his election pledge to restore American industries and blue-collar jobs.

Brazil, which after is the biggest to the U.S. market, said it wanted to join the exemption list, and made a similar case.

Japan, the United States' top economic and military ally in Asia, was next in line. told a conference that Japan's steel and aluminum shipments posed no threat to U.S. national security.

The European Union, the world's biggest trade bloc, chimed in. "is certainly not a threat to American internal security so we expect to be excluded," said in

Malmstrom told reporters the EU was ready to complain to the World Trade Organization, and retaliate within 90 days. She will meet with U.S. Trade and Japanese in on Saturday when she will ask whether the EU is to be included in the tariffs.

Malmstrom won support from German Shares in European fell, although Germany's two biggest producers, and , have insisted the impact on them will be limited.

The target of Trump's ire is China, whose capacity expansions have helped add to global surpluses of steel. is also the potential target of far more wide-ranging U.S. action over what Washington says is its theft of intellectual property and coercion of U.S. firms to share commercial secrets.

vowed to "firmly defend its legitimate rights and interests." Tariffs would "seriously impact the normal order of international trade," the said.

Last year, imported 3.2 million tonnes of U.S. coal, worth about $420 million and nearly five times the amount it took in 2016. Trump has championed coal exports as demand from power firms at home weakens.

The dispute has fueled concerns that soybeans, the United States' most valuable export to China, might be caught up in the row after launched an inquiry into imports of U.S. sorghum, a grain used in animal feed and liquor.

South Korea, the third-largest to the and a strategic ally on the Korean peninsula, called for calm. "We should prevent a trade war situation from excessive protectionism, in which the entire world harms each other," told a meeting with steelmakers.

While carrying a message to Washington to push forward a diplomatic breakthrough over North Korea, South Korea's asked U.S. officials to support Seoul's request for a waiver, a said.

(Additional reporting by Adam Jourdan, Wang Jing, Yuka Obayashi, Kaori Kaneko, Ami Miyazaki, Ju-Min Park, Hyunjoo Jin, Cynthia Kim, Robert-Jan Bartunek, Eric Beech and Alissa de Carbonnel; Writing by and David Chance; Editing by Toby Chopra, and Leslie Adler)

(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: Sat, March 10 2018. 05:22 IST