White House Mulls Provisional Exemption from Tariffs for Canada and Mexico

Republican presidential nominee Donald Trump waves after the Presidential Debate with Democratic presidential nominee Hillary Clinton at Hofstra University on September 26, 2016 in Hempstead, New York. The first of four debates for the 2016 Election, three Presidential and one Vice Presidential, is moderated by NBC's Lester Holt. (Photo by …
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The Trump administration is considering granting Mexico and Canada a provisional exemption from the steel and aluminum tariffs it plans to unveil later this week.

Administration officials who have been working out the details of the tariffs President Donald Trump announced Friday are in the process of considering various exceptions to the tariffs, including possibly granting blanket exemptions to Mexico and Canada while the North American Free Trade Agreement (NAFTA) negotiations are ongoing, according to three people familiar with the matter.

The idea that a successful renegotiation of the North American Free Trade Agreement would result in exemptions for Canada and Mexico has already been publicly supported by the president, Treasury Secretary Steven Mnuchin, and Commerce Secretary Wilbur Ross. America’s chief trade negotiator, U.S. Trade Representative Robert Lighthizer, also supports including an exemption for NAFTA nations if the deal can be reworked.

Officials with influence on trade policy inside the White House believe that imposing the tariffs on Canada and Mexico in the near term, only to remove them within months if a new NAFTA deal is reached, would be unnecessarily disruptive, according to a person familiar with the matter. One source said that NAFTA trade negotiators think imposing the sanctions while the negotiations are ongoing would be “unhelpful.”

If the NAFTA negotiations fail, the exemption from the tariffs would be lifted. This is seen as giving Mexico and Canada greater incentives to cooperate with U.S. demands.

There’s not yet been a final decision on whether to grant the provisional exemption, much less the details of how it would be implemented, one of the sources said. Some inside the White House worry that granting any exemption could “open the door” to “punching ever larger holes” in the tariff barriers to imported steel and aluminum.

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