Workers at Shandong Iron & Steel Group in Jinan, China. Photo: Reuters/Stringer

As many – including the markets – predicted, when the time came for Trump to pull the trigger on trade, he went soft.

Exemptions will be allowed initially for Canada and Mexico, the president said, pending the outcome of ongoing renegotiation of Nafta. At the same time, The Australian Financial Review reports, Aussie steel and aluminum exports will also be exempted, citing confidence in Canberra that a negotiating process will be a mere “formality.”

And there is now a race for the rest of the world to catch the exemption train, before it leaves the station in two weeks’ time.

Brazil and the EU, out of the gate (from The Financial Times):

Brazil, the second-largest importer of steel in the US market, insisted that its competitive industry did not threaten “the commercial or defence interests” of the US, while Cecilia Malmström, the EU’s trade commissioner, said that Brussels was “counting on being excluded.” […]

The EU, which has prepared countermeasures on some €2.8bn of US imports, has warned that it will not tolerate any moves by the US to negotiate special treatment with the UK or other individual EU countries.

The European Commission’s line is that the EU will react as a bloc if it is not exempted from the measures.

Japan and South Korea, meanwhile, look at WTO measures:

“It’s extremely regrettable and I’d like to work on the Americans to exempt us,” Hiroshige Seko, Japan’s minister of trade and industry, told a press conference. “Tit-for-tat retaliatory measures don’t profit any country. I’d like to consider the necessary response in the WTO framework.”

South Korea, the third-largest steel exporter to the US, is also considering joining an action at the WTO.

US companies are also hoping to be given reprieve from the tariffs (from Bloomberg):

Trump has also given Commerce Secretary Wilbur Ross the power to provide relief to specific steel and aluminum products that aren’t produced in the U.S. “in a sufficient and reasonably available amount or of a satisfactory quality.”[…]

“These tariffs will stimulate two things that Trump says he loathes: regulations and lobbying,” said Bloomberg Intelligence trade-policy analyst Caitlin Webber. “Exclusions will add reams to the tariff code that U.S. businesses will struggle to navigate. And there will be a long line of companies and countries arguing their imports should be given special treatment. ”