The inferno of a steel works in Dalian. Photo: Reuters
The inferno of a steel works in Dalian. Photo: Reuters

Update: The Wall Street Journal first reported Monday evening that the Trump administration has granted several allies an extension of temporary waivers from steel and aluminum tariffs ahead of a Tuesday deadline. Tariffs on imported metals from the European Union, Mexico and Canada will go into effect June 1, pending ongoing negotiations. 

The European Commission has said that talks are underway with the US “at all levels” to avoid an escalation of trade friction, Deutche Welle reported Monday as the Trump administration kept allies in suspense ahead of a Tuesday deadline for tariffs to take effect. European trading partners had warned following Trump’s initial announcement that there would be retaliation should the tariffs go into effect.

“The only thing that I can tell you today is that we are patient, but we are also prepared,” European Commission Spokesman Margaritis Schinas said.

The tariffs of 25% on steel and 10% for aluminum have already been imposed on imports from China, Russia, Japan, Turkey and Taiwan. South Korea, among those who received a temporary waiver, was granted permanent exemption after they agreed to changes to the US-South Korea trade agreement. Canada and Mexico were widely expected to be given extensions amid the ongoing NAFTA negotiations, but the Trump administration had given little indication about a decision on imports from the EU.

The one certainty as negotiations play out is that businesses are struggling to predict the Trump administration’s next move.

“We are in uncharted territory in terms of trade policy,” Chad Bown, a senior fellow at the Peterson Institute of International Economics, was quoted by The Washington Post as saying. “What President Trump has done is make everything uncertain in trade policy. You don’t know on an almost day-to-day basis what trade policy is going to be and businesses find it very difficult to operate in that kind of environment.”