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Trump will delay the start of possible trade war with some of the US's closest allies

President Donald Trump announced Monday that steel and aluminum tariff exemptions for six countries would be extended in order to give the US more time to work out trade deals and avoid a trade war.

  • President Donald Trump announced extensions to steel and aluminum tariff exemptions for six key US allies on Monday.
  • The move will allow the US and the allies, including the European Union and Canada, more time to work out ways to reduce trade imbalances.
  • Trump's extensions also likely delay the start of a trade war with those countries granted exemptions.

President Donald Trump's administration announced Monday that it would extend exemptions to steel and aluminum tariffs for some of the US's closest allies, avoiding the start of a possible trade war.

Trump decided to postpone imposing the tariffs and extend exemptions that will allow the countries to continue exporting metals to the US without being subject to a 25% tariff on steel and 10% tariff on aluminum.

The exemptions will now last until June 1, a move that

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Trump originally did not plan to exempt any countries when the tariffs were first announced. But similar to his other moves on trade, Trump backed down on the threat. A half-dozen allies were eventually granted a temporary exemption:

The exemptions are significant because the countries represent a large percentage of imported steel and aluminum. Five of the top 10 steel exporters to the US were provided exemptions and two exempted countries, Canada and Argentina, make up 55% of all aluminum imported by the US.

In addition to the direct economic consequence of the exemptions, the move also prevents those countries from taking retaliatory action against the US.

French President Emmanuel Macron and German Chancellor Angela Merkel were in Washington, DC, to meet with Trump last week, and both stressed the need to keep open the trade channels between the EU and the US. But, in the event that Trump did not grant extensions, the EU threatened to impose tariffs on the US.

In a statement to Business Insider, a UK government spokesperson said the country was encouraged by the exemption extension but was concerned about possible economic distortions caused by the tariffs.

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"It is positive that the UK has been granted a further exemption to these tariffs. We will continue to work closely with our EU partners and the US government to achieve a permanent exemption, ensuring our important steel and aluminum industries are safeguarded," the spokesperson said.

"We remain concerned about the impact of these tariffs on global trade and will continue to work with the EU on a multilateral solution to the global problem of overcapacity, as well as to manage the impact on domestic markets."

For now, these actions, and a probable trade war, are likely to be delayed by Trump's extension.

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