White House opens door to tariff exclusions for some countries

By Steve Holland

WASHINGTON (Reuters) - The White House on Wednesday raised the possibility that U.S. tariffs on steel and aluminum imports could exclude a clutch of countries other than Canada and Mexico as pressure grew on U.S. President Donald Trump to impose targeted measures that would not harm America's allies.

Trump is set to authorize the steep tariffs by the end of the week, White House spokeswoman Sarah Sanders said, a day after the resignation of economic adviser Gary Cohn, who opposed the move.

"We expect that the president will sign something by the end of the week and there are potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well based on that process," Sanders told a regular media briefing. "It will be country by country, and it will be based on national security."

A White House official said Trump hoped to sign the presidential proclamation on Thursday afternoon but it could slide to Friday so that documents could be cleared through a legal process.

The tariffs would take effect about two weeks after Trump signs the proclamation, according to a senior U.S. official.

The tariffs would impose a duty of 25 percent on steel and 10 percent on aluminium to counter cheap imports, especially from China, that he says undermine U.S. industry and jobs.

Action that does not include exemptions risks retaliatory tariffs on U.S. exports - not least by Canada and Europe - and complicates already tough talks on the North American Free Trade Agreement (NAFTA).

Trump said on Monday that Canada and Mexico would only be excluded after the successful renegotiation of NAFTA.

The departure of Cohn, who was seen as a bulwark against Trump's economic nationalism, clears the way for greater influence by trade hard-liners such as Commerce Secretary Wilbur Ross and Peter Navarro, Trump's trade policy adviser, and the possibility that the tariffs will be implemented.

Sanders said Trump was considering several candidates to fill Cohn's position, while Navarro said he was not short-listed for the job.

The increased likelihood of tit-for-tat trade measures and a warning by the International Monetary Fund that it could hurt global growth hit shares, oil and the dollar.

(Additional reporting by Tom Miles in Geneva and Susan Heavey and Jason Lange in Washington; Writing by Robin Pomeroy and Lesley Wroughton; Editing by Bill Trott and James Dalgleish)