Donald Trump adopted sweeping tariffs on steel and aluminium imports yesterday, but decided key allies could apply for exemptions in a sign of growing concern in Washington that the president was alienating the US’s closest international partners.The move is expected to draw retaliation from the EU and other steel producers and heighten fears of a descent into trade wars. But the last-minute softening included an immediate exemption for Canada and Mexico while they renegotiate the North American Free Trade Agreement with the US. In a second proclamation, the president created a process to allow countries that have a close security relationship with the US to discuss their own possible exemptions. Mr Trump’s decision marks the fulfilment of a campaign promise to protect the US steel industry and bring back jobs to the blighted Rust Belt communities. It comes ahead of special election next week in a Pennsylvania congressional district that includes many communities once dependent on the steel industry. “We have to protect & build our Steel and Aluminium Industries while at the same time showing great flexibility and co-operation toward those that are real friends and treat us fairly on both trade and the military,” Mr Trump wrote on Twitter ahead of the signing. The list of countries that will be exempted has been the main area of debate surrounding Mr Trump’s plan since he announced it last week. While the move is aimed at protecting US industry from China, which has flooded global markets with cheap metals in recent years, allies such as Canada, the EU, Japan and South Korea fear they will bear its brunt.
Countries outside Nafta would be able to lobby the US for exemptions as long as they could show their exports would not affect US national security, a senior administration official said.Under US law, the tariffs are technically allowed only because they would protect the domestic industry for national security purposes. That, however, raises problems under global trade rules where national security exemptions are invoked rarely. Experts fear it could trigger similar moves by other countries.