President Donald Trump is to press ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum. Picture: Xinhua/Ting Shen
Washington/Paris/Beijing - President Donald Trump is to press ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum, although he said on Thursday he was willing to strike a deal that could see Canada and Mexico exempted.

Washington has repeatedly offered relief from steel and aluminum tariffs to countries that "treat us fairly on trade" a gesture aimed at putting pressure on Canada and Mexico to give ground in separate North American Free Trade Agreement (NAFTA) talks.

"I'm sticking with 10 and 25 (percent) initially. I'll have a right to go up or down, depending on the country, and I'll have a right to drop out countries or add countries," he told reporters at the beginning of a Cabinet meeting at the White House.

Trump said he would announce the duties later on Thursday. The range of potential exemptions for allies and for industries has made the final outcome unpredictable.

In addition to exemptions, there could be a consultation period that would lead to intense lobbying by industry and a growing group of disgruntled Republican lawmakers who oppose the tariffs proposed by the president, a fellow Republican.

Talk of tariffs has raised the prospect of a global trade war and hit stock markets hard. Both the European Union and China have said they would retaliate against action by the United States, as have Mexico and Canada. The US neighbours are engaged in so far fruitless talks with Washington to renegotiate NAFTA.

"If Donald Trump puts in place the measures this evening, we have a whole arsenal at our disposal with which to respond," European Financial Affairs Commissioner Pierre Moscovici said.

Countermeasures would include European tariffs on US oranges, tobacco and bourbon, he said. Harley Davidson Inc motorcycles have also been mentioned, targeting House of Representatives Speaker Paul Ryan's home state of Wisconsin.

Speaking before Trump, Canadian Prime Minister Justin Trudeau said there was a "level of confidence" that the country's close relationship with the United States will protect it from US tariffs.

Beijing, which until now had kept largely silent on the issue, sharpened its rhetoric significantly. One lever that China has is US agricultural exports, and it has said in the past that it could target soybeans.

"Especially given today's globalisation, choosing a trade war is a mistaken prescription. The outcome will only be harmful," Foreign Minister Wang Yi said on the sidelines of an annual meeting of China's parliament. "China would have to make a justified and necessary response."

Reuters