WASHINGTON (AFP) - President Donald Trump vowed to be flexible towards "real friends" of the United States as the White House prepared on Thursday (March 8) to roll out punitive trade tariffs - singling out Germany for criticism and adding Australia to a list of likely carve-outs.
Amid pitched policy battles inside his administration and fierce opposition without, the White House indicated the measures may, or may not, be signed later on Thursday when Trump is set to host steel and aluminum industry and workers at the White House.
With hours to go until the 3.30pm (4.30am on Friday, Singapore time) meeting, it was still unclear if it would see Trump sign the contentious tariffs into law, a signing of something symbolic or no signing at all.
But Trump made clear he was pressing press ahead with tariffs of 25 per cent on foreign steel and 10 per cent on aluminium, while saying Australia and "others" could be exempt - in addition to America's neighbours and Nafta partners Mexico and Canada.
"We are going to be very fair, we're going to be very flexible" Trump told his Cabinet, pointing to winners and losers from the contentious policy which has stoked fears of a global trade war.
If America reaches a deal on renegotiating its trilateral trade agreement with Mexico and Canada, he said, "it is most likely that we won't be charging those two countries the tariffs."
"We have a very close relationship with Australia," he added. "We have a trade surplus with Australia, great country, long term partner, we'll be doing something with them."
The US leader also cited possible exemptions for unspecified "other countries."
But Trump took aim at Germany - the biggest economy in the EU trade bloc - as a bad actor likely to face tariffs.
Railing against countries that had "taken advantage" of the United States, Trump accused Germany of behaving unfairly by contributing much less than the US towards the funding of NATO.
"We have some friends and some enemies where we have been tremendously taken advantage of over the years on trade and on military," he said.
"If you look at NATO, where Germany pays 1 per cent and we are paying 4.2 per cent of a much bigger GDP - that's not fair," he said.
"So we view trade and we view the military, and to a certain extent, they go hand in hand."
PARTNERS PROMISE BACKLASH
Last week, Trump stunned the world - and many in his own camp - with an off-the-cuff announcement of his tariff plan, made before White House lawyers had finished reviewing the legality of the move and before it was clear which countries would be targeted.
He cited Chinese overproduction and national security concerns as the main driver.
Since then the White House has scrambled to catch up, Trump's top economic adviser Gary Cohn - who opposed the move - quit in protest and stock markets sank.
More than 100 Republican lawmakers have signed a letter to Trump expressing "deep concern" about the policy, which they warned could "undermine" economic gains from Trump's own tax reforms.
Trade experts at the Peterson Institute now believe US allies - rather than China - will be disproportionately hit and imports to America cut by around US$14 billion (S$18 billion).
The European Union, Mexico and Canada have all warned they will retaliate, with the decision threatening to sour already vinegared trans-Atlantic relations.
The European Union has vowed to hit back with tariffs on items from steel to peanut butter, bourbon and denim - most of which are produced in states that Trump needs to win reelection.
"Trade wars are bad and easy to lose," EU President Donald Tusk warned, rejecting Trump's assertion they were "good and easy to win".
As Trump has pressed ahead, his staff have tried to limit the fallout.
"We're going to have sensible relations with our allies," Commerce Secretary Wilbur Ross insisted on Wednesday.
"We're not looking for a trade war," he said.
Data released Wednesday showed the US foreign trade deficit widened in January to its highest level in nine years - heaping pressure on Trump, who had campaigned on a promise to reverse that trend.
Trump blamed the situation on his White House predecessors, while also taking aim at Beijing over the size of its trade deficit with the United States.
China, meanwhile, warned on Thursday it was ready to respond to US tariffs if they materialize.
"Choosing a trade war is surely the wrong prescription, in the end you will only hurt others and yourself," Foreign Minister Wang Yi said, adding that "China will certainly make an appropriate and necessary response."