The White House has said that certain countries may be spared planned new trade tariffs in an apparent softening of a policy which has already sparked threats of retaliation.
It came as China entered the fray – warning that it would also respond as necessary – following a robust reaction from Europe in recent days to Donald Trump’s plans.
Mr Trump said last week that he planned to levy charges of 25% on steel imports and 10% on aluminium in a bid to protect American producers.
The decision sparked anxiety on global markets and sent Wall Street shares sliding on Wednesday – after it apparently prompted the resignation of the President’s economic adviser Gary Cohn.
But the White House has now said that Mexico, Canada and other countries may be spared.
A spokeswoman said exemptions would be made on a case by case basis, a reversal from the previous position that there would be none.
The shift in tone helped Asian markets make gains on Thursday, after jitters in recent days over the prospect of a trade war.
European leaders have already responded strongly to the threats from Washington – indicating that if the US goes ahead with its plans it will impose tariffs of its own on a range of goods.
On Wednesday, the European Commission upped the ante in the dispute, adding orange juice, peanut butter and cranberries to the list of products it could target – which already included jeans, bourbon whisky and Harley Davidson motorbikes.
China – initially seen as the main focus of the trade concerns behind Mr Trump’s policy – also later weighed in.
Foreign minister Wang Yi said choosing a trade war would be a “mistaken prescription” and that the outcome “will only be harmful”.
He said: “China would have to make a justified and necessary response.”
