Ahead of a midnight deadline, it's still unclear whether President Trump will open a European front in his trade war.
The backdrop: Temporary exemptions from steel and aluminum tariffs granted to the EU, Mexico, Canada, Australia, Argentina and Brazil expire at 12:01am.
The big picture: Trump's trade war isn't just about China. He made pointed references to trade deficits during a visit from German Chancellor Angela Merkel on Friday, then traveled to Michigan over the weekend and claimed the EU was "formed to take advantage of the U.S."
- The trend, from Axios' Erica Pandey: The U.S. trade deficit with the EU ballooned from $17 billion in 1997 to $151.4 billion in 2017, and the driving force was German manufacturing. Last year, the U.S. bought $117.7 billion worth of imports from Germany — 27% of total imports from the EU.
- The latest: Treasury Secretary Steven Mnuchin told Fox Business in an interview that aired this morning that no final decisions had been made. Commerce Secretary Wilbur Ross told Bloomberg some, but not all, of the countries would get relief from tariffs. Axios' Jonathan Swan reports that internal debates were still raging in the White House as of yesterday.
Why it matters: This not only could roil relations with America's closest allies, it has massive economic implications. The countries in question account for half of U.S. steel imports, and a big chunk of U.S. trade. Germany, France and the U.K. have all said they'll respond forcefully if the tariffs do come into force.
Go deeper: Erica's piece on the stakes of trade war with Europe.