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Metals tariffs increase as the deadline for 'best offers' approaches

On Wednesday, the U.S. tariff rates on steel and aluminum imports will double as President Donald Trump intensifies a global war of trade. He also expects his trading partners to make their "best offers" to avoid harsh import tax rates for other goods taking effect early in July.

Trump signed an executive order late Tuesday that will take effect on Wednesday. Last week, Trump surprised the world by announcing that he would increase tariffs from 25% to 50% on imports of steel and aluminum.

"We began with 25 and after studying more data, we realized that this was a great help but more assistance is needed." Kevin Hassett, White House economist, explained the decision at a conference on the steel industry in Washington. The increase will take effect at 12.00 am (0401 GMT).

The tariff increase is applicable to all trading partners, except for Britain. This country has been the only one that has reached a preliminary agreement with the U.S. in the 90-day period of a pause from Trump's other tariffs. The tariff rate on steel and aluminum imported from the UK, which is not among the top exporters to the U.S. of either metal, will remain at 25% at least until July 9.

Census Bureau data show that the levies are likely to hit U.S. trading partner Canada and Mexico the hardest. The two countries are ranked No. They rank No.

Canada, as the largest exporter of aluminum to the U.S., is more vulnerable to the aluminum levies than any other country. It exports roughly twice as much aluminium to the U.S. About half of the aluminum in the United States comes from overseas sources.

This week's unexpected rise in levies has shaken the markets for both metals, but especially aluminum. Aluminum prices have more than doubled this year. Import volumes will likely not be affected by the current price hikes if there is no capacity to increase production at home.

Date for 'BEST OFFER '

The White House also wants trading partners to submit proposals on Wednesday that could help them avoid Trump’s "Liberation Day", hefty tariffs, from going into effect in just five weeks.

Since Trump announced the pause in tariffs on April 9th, administration officials have been actively engaged in talks with several countries. However, only one deal has materialized. Even the agreement that provided the basis for the exemption from metals tariffs is more of an initial framework for further talks.

The Trump team wants to close more deals in the remaining weeks.

Reports on Monday stated that the U.S. trade representative was asking countries to submit their best proposals for a variety of areas including tariff and quota plans for purchases of U.S. agricultural and industrial products, and plans to remove any non-tariff obstacles.

The letter also promises to provide answers "within a few days", and a "landing area" that includes the tariff rates expected for countries after the 90-day suspension of tariffs ends on July 8th. Most trading partners are concerned about whether or not they will continue to apply the 10% baseline tariff on all exports to the U.S. following that date.

Karoline Leavitt, White House spokesperson confirmed the report Tuesday. She said: "USTR sent the letter to all our trading partners to remind them that the deadline was approaching."

According to the letter, the Trump administration also requested any commitments regarding digital trade, economic security and country-specific commitments. (Additional reporting from Alexandra Alper, Washington; Writing and editing by Dan Burns.

(source: Reuters)