U.S. President Donald Trump has postponed a decision on imposing steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and has reached an agreement in principle with Argentina, Australia and Brazil, a source familiar with the decision said on Monday.
The decision came just hours before temporary exemptions were set to expire at 12:01 a.m. (0401 GMT) on Tuesday.
“The administration has reached agreements in principle with Argentina, Australia, and Brazil, details of which will be finalized in the next 30 days. The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days,” the source said.
Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum in March, but granted temporary exemptions to Canada, Mexico, Brazil, the European Union, Australia and Argentina. He also granted a permanent exemption on steel tariffs to South Korea.
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. South Korea’s permanent exemption is in exchange for having agreed to cut its steel exports to the United States by about 30 percent.
Canadian Prime Minister Justin Trudeau said on Monday that any move by the United States to impose tariffs on Canadian steel and aluminum would be a “very bad idea” guaranteed to disrupt trade between the two countries.
Canada is the largest source of steel imports into the United States, with a steel industry that is highly integrated with its southern neighbor.
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.
If the EU is subject to tariffs on the 6.4 billion euros ($7.7 billion) of the metals it exports annually to the United States, it has said it will set its own duties on 2.8 billion euros of U.S. exports of products ranging from makeup to motorcycles.