Some countries are now likely to be spared from planned tariffs on metals advocated by U.S. President Donald Trump. 

“We expect that the president will sign something by the end of the week, and there are potential carve-outs for Mexico and Canada, based on national security, and possibly other countries as well, based on that process,” White House press secretary Sarah Huckabee Sanders told reporters Tuesday. 

The comment resulted in key stock indexes and the U.S. dollar paring losses in afternoon trading. 

The Dow Jones industrial average, after falling more than 300 points during the session, closed off 83 points, a drop of one-third of a percent. 

Market players said the sell-off was sparked by the previous day’s announcement that the president’s chief economic adviser, Gary Cohn, was resigning. The former Goldman Sachs investment bank president had opposed the sweeping tariffs for foreign steel and aluminum. 

Trump could sign the tariffs as soon as Thursday afternoon, but it could also occur on Friday, according to White House officials. 

‘Easy to win’

Trump boasted last week that trade wars “are good and easy to win” after his surprise announcement he planned to impose a 25 percent U.S. tariff on steel imports and a 10 percent levy on aluminum imports. That prompted widespread criticism from his normal Republican colleagues in Congress and America’s allies. 

The president, according to staffers, acted on recommendations made by Commerce Secretary Wilbur Ross, formerly a billionaire investor, and Peter Navarro, an economist who is director of the White House National Trade Council. 

Ross said the planned steel and aluminum tariffs were “thought through. We’re not looking for a trade war.”

The tariffs proposal also won support from economic nationalists in the United States and some Democratic lawmakers in manufacturing states whose fortunes could be boosted by the tariffs protecting their metal industries.

The chief of the International Monetary Fund, Christine Lagarde, on Wednesday in a European radio interview, warned of a global trade war, predicting the U.S. tariffs could lead to “a drop in growth, a drop in trade, and it will be fearsome.”

Warning that there would be no victors in such a trade war, Lagarde urged “the sides to reach agreements, hold negotiations, consultations.”

‘Easy to lose’

European Council President Donald Tusk echoed Lagarde’s stance, saying, “The truth is quite the opposite: Trade wars are bad and easy to lose. For this reason, I strongly believe that now is the time for politicians on both sides of the Atlantic to act responsibly.”

The European Commission, the executive arm of the 28-nation European Union, detailed retaliatory tariffs it plans to impose on prominent U.S. products if Trump carries out his plan to impose the metal tariffs, taxing Harley-Davidson motorcycles, bourbon, blue jeans, cranberries, orange juice and peanut butter.

Moody’s Investors Service said the planned tariffs “raise the risk of a deterioration in global trade relations.”

Trump said on Twitter that since former President George H.W. Bush was in the White House 30 years ago, “our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars.”

“Bad Policies & Leadership. Must WIN again!” Trump also said on Twitter. 

Trump claimed the United States last year had a trade deficit of “almost 800 Billion Dollars,” significantly overstating the actual figure of $566 billion, which still was the biggest U.S. trade deficit in nine years. 

A new report Wednesday said the U.S. trade deficit in January — the amount its imports exceeded its exports — reached $56.6 billion, the highest monthly total since October 2008.

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