US President Donald Trump on Thursday slapped deeply contentious trade tariffs on foreign steel and aluminum, brushing off warnings of a global trade war and protests from European allies and at home.

US President Donald Trump holds up the Section 232 proclamations on aluminum imports after signing it in the Roosevelt Room of the White House on March 8, 2018 in Washington DC.
US President Donald Trump holds up the Section 232 proclamations on aluminum imports after signing it in the Roosevelt Room of the White House on March 8, 2018 in Washington DC. ( AP )

Unswayed by Republican warnings of a trade war, President Donald Trump ordered steep new tariffs on steel and aluminium imports to the US on Thursday, vowing to fight back against an "assault on our country" by foreign competitors. The president said he would exempt Canada and Mexico while negotiating for changes to the North American Free Trade Agreement.

The new tariffs will take effect in 15 days, with Canada and Mexico indefinitely exempted "to see if we can make the deal," Trump said. NAFTA talks are expected to resume early next month.

"The American aluminium and steel industry has been ravaged by aggressive foreign trade practices. It's really an assault on our country. It's been an assault," Trump said at the White House. He was joined by steel and aluminium workers holding white hard hats.

American steel and aluminium workers have long been betrayed, but "that betrayal is now over," Trump said. The former real estate developer said politicians had for years lamented the decline in the industries, but nobody was willing to take action.

As he had indicated previously, Trump said he would levy tariffs of 25 percent on imported steel and 10 percent on aluminium. But he said during a cabinet meeting earlier in the day that the penalties would "have a right to go up or down depending on the country and I'll have a right to drop out countries or add countries. I just want fairness."

Business leaders, meanwhile, have continued to sound the alarm about the potential economic fallout from tariffs, with the president and CEO of the US Chamber of Commerce raising the spectre of a global trade war. That scenario, Tom Donohue said, would endanger the economic momentum from the GOP tax cuts and Trump's rollback of regulations.

"We urge the administration to take this risk seriously," Donohue said.

The president suggested in the meeting with his cabinet that Australia and "other countries" might also be spared, a shift that could soften the international blow amid threats of retaliation by trading partners.

"We're going to be very fair, we're going to be very flexible but we're going to protect the American worker as I said I would do in my campaign," Trump said.

People briefed on the plans ahead of the announcement said all countries affected by the tariffs would be invited to negotiate with the administration to be exempted from the tariffs if they can address the threat their exports pose to US manufacturers. The exemptions for Canada and Mexico could be ended if talks to renegotiate NAFTA stall.

TRT World's Harry Horton reports.

The process of announcing the penalties has been the subject of an intense debate and chaotic exchanges within the White House, pitting hardliners against free trade advocates such as outgoing economic adviser Gary Cohn.

The fight over tariffs comes amid intense turmoil in the West Wing, which has seen waves of departures and negative news stories that have left Trump increasingly isolated in the Oval Office, according to two senior officials speaking on the condition of anonymity to discuss internal discussions.

Congressional Republicans and business groups are bracing for the impact of the tariffs and the departure of Cohn, a former Goldman Sachs executive who has opposed them.

House Speaker Paul Ryan, appearing at a session with Home Depot employees in Atlanta, said ahead of Trump's announcement, "I'm just not a fan of broad-based, across-the-board tariffs." He pointed to the store's many products that rely on steel and aluminium.

More than 100 House Republicans wrote to Trump on Wednesday, asking him to reconsider "the idea of broad tariffs to avoid unintended negative consequences" to the US economy and workers.

Arizona Senator Jeff Flake, a Republican, said he plans to introduce legislation next week to nullify the tariffs though he has acknowledged that finding the votes to stop the president's actions could be difficult.

The president has said the tariffs are needed to reinforce lagging American steel and aluminium industries and protect national security.

Major Asian nations reacted sharply to Trump's decision to impose tariffs on steel and aluminum imports on Friday, warning of damage to close relations amid industry calls for retaliation.

Japan said the move would have a "big impact" on the countries' close bilateral ties, while China said it was "resolutely opposed" to the decision and South Korea said it may file a complaint to the World Trade Organization.

China, which produces half the world's steel, will assess any damage caused by the US move and "firmly defend its legitimate rights and interests," the country's Ministry of Commerce said.

The tariffs would "seriously impact the normal order of international trade," China's commerce ministry said.

Trump's declaration coincided with the signing by 11 countries of a new Trans-Pacific trade pact that the United States withdrew from last year.

South Korea and Australia both said they would seek exceptions.

The European Union, Brazil and Argentina said overnight they should not be targeted or would seek exemptions.

Source: AP