Donald Trump's tariff plan comes under fire from Republican allies

President Trump speaks during a meeting with steel and aluminum executives in the Cabinet Room on Thursday

President Trump speaks during a meeting with steel and aluminum executives in the Cabinet Room on Thursday

Donald Trump hinted on Monday that Canada and Mexico could be exempt from planned tariffs on steel and aluminum imports - but only if the North American Free Trade Agreement is renegotiated to his satisfaction.

This week, Trump is scheduled to sign an executive order that would impose a 25 per cent tariff on import of steel and another 10 per cent on aluminium.

"We are on the losing side of nearly all trade deals", Trump tweeted on Sunday. Finance Minster Bill Morneau also said recently that Canada has been "firm" in its opposition to tariffs.

At the same time, tariffs imposed on our trading partners encourage them to impose tariff on products they import from the U.S. That means U.S. exporters will sell less to foreign buyers because foreign buyers will have to pay more for what they import.

"What we're encouraging the administration to do is to focus on what is clearly a legitimate problem and to be more surgical in its approach so that we can go after the true abusers without creating any kind of unintended consequences or collateral damage", he said.

All three countries have been mired in trade talks since last August that were sparked by Trump's insistence that NAFTA has been a raw deal for American manufacturing workers.

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"We are not looking to get into trade wars", he said.

"We're not backing down", Trump said. The union has already called for the federal government to walk away from NAFTA if Canada is not excluded from tariffs.

U.S. President Donald Trump and first lady Melania Trump meet with Israel Prime Minister Benjamin Netanyahu and Sara Netanyahu in the Oval Office of the White House March 5, 2018 in Washington, DC. Canada supplied about 16 per cent of that steel.

"In such a trade war there are only losers on all sides", Bernhard Mattes, president of Germany's VDA automotive industry association, said in a statement. "You'll have to regrow your industries, that's all I'm asking", Trump said. More than six million are employed in businesses, like the auto sector and construction, that use steel and aluminum.

Trump announced the tariffs in front of the steel/aluminum companies who would benefit.

If the USA can impose these tariffs on steel and aluminum on the basis of "national security", someone else is sure to try for tariffs on food, or clothing, or various other products on the same basis.

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