Abu Dhabi, UAEThursday 22 August 2019

Trump trade adviser says there will be business exemptions for new tariffs

The scenario of possible exceptions came after the president’s surprise trade announcement on Thursday

Donald Trump's plans to impose tariffs on imported steel and aluminium could lead to trade wars with European and other allies. Alexander Koerner/Getty Images
Donald Trump's plans to impose tariffs on imported steel and aluminium could lead to trade wars with European and other allies. Alexander Koerner/Getty Images

A top trade adviser to US president Donald Trump said on Sunday a process will be in place for businesses to get exemptions from the White House plan to place steep tariffs on steel and aluminium, offering the first indication that a tariff hike could be less broad than first thought.

Peter Navarro, director of the White House National Trade Council, said countries will not be excluded from the tariffs because that would become a slippery slope, but there will be a mechanism for corporate exemptions in some cases.

“There will be an exemption procedure for particular cases where we need to have exemptions, so that business can move forward,” Mr Navarro said on CNN’s State of the Union programme.

The scenario of possible exceptions came after Mr Trump’s surprise announcement on Thursday and subsequent aggressive business lobbying against the tariffs, an outcry from US trading partners and criticism from fellow Republicans.

Mr Trump has spoken to world leaders about the planned tariff hikes but has given no indication he would allow exemptions, commerce secretary Wilbur Ross said on Sunday.

Mr Navarro did not elaborate on the exemption procedure and the White House did not immediately return a request for comment.

The two men, who have advocated stronger trade policies to reduce trade imbalances, went on Sunday television news shows to try to contain the global fallout from Mr Trump’s announcement.

The president said the United States would impose duties of 25 per cent on imported steel and 10 per cent on aluminium to protect domestic producers. The plan stunned US trading partners, alarmed American industry leaders and roiled stock markets.

Josh Bolten, chief executive of the influential Business Roundtable, told Fox News on Sunday that the tariffs would cause “huge damage” across the economy without affecting China.

A frequent target of Mr Trump’s criticism on trade, China accounts for 2 per cent of US steel imports.

A number of Republicans, including congressional leaders, urged the president to hold back on the tariffs.

At North American trade talks in Mexico City, Republican representative Kevin Brady, the top US lawmaker on trade policy, said the administration should exempt current aluminium and steel contracts to avoid business uncertainty.

“I believe there should be a quick and timely exclusion process for existing contracts, as well as for existing businesses,” he said.

Energy industry officials raised concerns about the tariffs on steel since the sector relies on imports.

“The US oil and natural gas industry, in particular, relies on specialty steel for many of its projects that most US steel makers don’t supply,” American Petroleum Institute president Jack Gerard said last week.

The steel used to make large-diameter, thick-walled pipe for interstate natural gas and oil pipeline projects are not available off the shelf or from a wide variety of manufacturers, according to the Interstate Natural Gas Association of America.

Numerous world leaders and ministers have been in touch with Mr Trump and US officials including Mr Ross, suggesting an intensive behind-the-scenes effort to change the president’s mind, the commerce secretary said.

British prime minister Theresa May told Trump she had “deep concern” about the expected tariffs, May’s office said on Sunday following a phone call between the two leaders. Mrs May said “multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests.”

Mr Ross said there was no indication yet that Mr Trump would consider exemptions for countries, but he did not rule it out.

“We’ll see. The president makes the decision,” Ross said on NBC’s Meet the Press.

Canada, the biggest steel supplier to the US, is trying to secure an exemption from potential US tariffs on steel and has threatened retaliation if the plan goes ahead.

Mr Ross said the proposed tariffs represent a fraction of 1 per cent of the US economy so they would not have a great impact.

The commerce secretary dismissed European Union threats of retaliatory tariffs on flagship American products, including Harley Davidson motorcycles, bourbon and Levi’s jeans, calling the $3 billion in affected goods a “pretty trivial” amount.

On Saturday, Trump threatened European automakers with a tax on imports if the European Union retaliates.

Updated: March 5, 2018 08:55 AM