U.S. President Donald Trump has postponed the imposition of steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and has reached agreements for permanent exemptions for Argentina, Australia and Brazil, the White House said on Monday.
The decisions came just hours before temporary exemptions from the tariffs on these countries were set to expire at 12:01 a.m. (0401 GMT) on Tuesday.
In a statement, the White House said the details of the deals with Brazil, Argentina and Australia would be finalized shortly, and it did not disclose terms.
“The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security,” the White House added.
A source familiar with the decision said there would be no further extensions beyond June 1 to stave off tariffs.
Trump on March 23 imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum, but granted temporary exemptions to Canada, Mexico, Brazil, the EU, Australia and Argentina. Trump has also granted a permanent exemption on steel tariffs to South Korea as part of a revision of a free trade pact that he sharply criticized.
Trump has invoked a 1962 trade law to erect protections for U.S. steel and aluminum producers on national security grounds, amid a worldwide glut of both metals that is largely blamed on excess production in China.
The tariffs, which have increased frictions with U.S. trading partners worldwide and have prompted several challenges before the World Trade Organization, are aimed at allowing the two U.S. metals industries to increase their capacity utilization rates above 80 percent for the first time in years.
Trump administration officials have said that in lieu of tariffs, steel- and aluminum-exporting countries would have to agree to quotas designed to achieve similar protections for U.S. producers.
Australia’s Prime Minister Malcolm Turnbull and the country’s Trade Minister Steven Ciobo welcomed the tariff exemption, and said the country would continue to work with Washington to prevent dumping.
“The exemption reflects the fair and reciprocal trade relationship Australia shares with the United States and underpins the unbreakable friendship between our two great nations,” they said in a statement.
Australia’s sole steel producer Bluescope, which supplies locally made steel to its own factories in the United States, said it was pleased with the exemption.
“Now it’s time to refocus, and get back to business,” Managing Director Mark Vassella said in a statement.
South Korea earned its permanent exemption from steel tariffs by agreeing to quotas that will cut its steel shipments by about 30 percent from 2017 levels. Seoul is still subject to U.S. aluminum tariffs
Most Asian markets were closed for a holiday on Tuesday but on the London Metal Exchange, aluminum and steel-linked materials eased on prospects supply could be cheaper to come by.