Two of the US's biggest allies could be spared from Trump's massive new tariffs

Win McNamee/Getty ImagesUS President Donald Trump.
  • The White House press secretary, Sarah Huckabee Sanders, said proposed tariffs on steel and aluminium could have carve-outs for Canada and Mexico.
  • Sanders said carve-outs would be “based on national security” and could eventually extend to other countries.
  • President Donald Trump and other administration officials have previously said there will be no exemptions for any nations.

The US’s proposed tariffs on steel and aluminium could have carve-outs for Canada, Mexico, and other key allies, the White House press secretary said Wednesday, potentially softening the blow of the coming trade restrictions.

“There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well based on that process,” Sarah Huckabee Sanders told reporters.

Sanders also said President Donald Trump would sign the final version of the tariffs by the end of the week. Multiple reports have indicated that Trump’s signature could come as soon as Thursday.

The press secretary was vague when asked how countries could qualify for any exemptions.

“That would be a case-by-case and country-by-country basis, but it would be determined whether or not there would be a national-security exemption,” Sanders said.

Kevin Frayer/Getty ImagesSmoke billows from a large steel plant.

In imposing the tariffs, which are taxes on imports, the US would take advantage of a little-used provision of trade law that allows the president to act to curtail imports of a good on national-security grounds. It’s intended to prevent the US from becoming too dependent on imports of a key good from any country that may become an adversary.

Canada, Mexico, and other allies said the White House’s justification made little sense given their relationship with the US.

Trump and other administration officials, such as his top trade adviser, Peter Navarro, have previously said there would be no carve-outs for any nation.

But such a move could head off some of the more aggressive countermeasures from allies. The tit-for-tat scenario of a trade war has worried economists and investors since Trump announced the tariffs on Thursday.

The new restrictions are set to come as the US, Mexico, and Canada attempt to renegotiate the North American Free Trade Agreement, talks over which were thrown for a loop after Trump’s unexpected tariff announcement.

Meanwhile, despite initial concerns the impact on Australia is likely to be limited, although it will probably cost jobs and drag on investment.

As Business Insider’s Paul Colgan wrote earlier in the week, “initial effects will be limited but Australia needs to watch for signs of escalation closely: if a tariff on steel — worth only a few hundred million in exports — can cost tens of thousands of jobs and depress investment because of the impact on certainty, then the impact of a broader trade war is absolutely something Australia should be concerned about.”

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