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Trump launches his trade war, with reprieves for Mexico & Canada

Donald Trump
Donald Trump during a meeting on March 6. Photo: Andrew Harrer-Pool/Getty Images

President Trump signed two proclamations today that go into effect on March 23, one imposing a 25% tariff on steel and the other a 10% tariff on aluminum. The president confirmed that Canada and Mexico are exempt from the tariff increases, citing national security agreements — specifically ongoing NAFTA negotiations. He called the existing taxes an economic and national security "disaster" adding, "we're finally taking action to correct."

The big picture: This will still meet fierce opposition from free traders and large sections of the business community. But it’s not nearly so bad as it originally appeared. Trump initially wanted to impose these tariffs on everyone with no exceptions and no room for exclusions. There’s now plenty of wiggle room.

A factor that influenced Trump: In his conversations with Canadian leader Justin Trudeau he became convinced that he could use the threat of steel and aluminum tariffs as leverage to get a better deal in the NAFTA negotiations, according to sources with direct knowledge. Trump’s team viewed Canada as a bigger problem than Mexico in these negotiations and given Canada sells so much of those metals to the US, Trump saw an opportunity to squeeze them. (Whether it works is an open question.)

The details: The proclamations will be "flexible," allowing the U.S. to address security relationships in an "ironclad way" to defend its steel and aluminum industries, said a senior administration official. Trump explained that they will show "great flexibility and cooperation towards [nations] who are really friends of ours both on a trade basis and on a military basis." The administration is open to allowing some countries to negotiate for exemptions on a "case-by-case" basis, pending separate, bilateral agreements.

What's next: Countries have threatened to protest the increased tariffs, with the EU warning of "tit-for-tat" tariffs of 25% on $3.5 billion worth of American products. We could see an international trade war looming with subsequent hits to the U.S. and global economies.

Haley Britzky 1 hour ago
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DOJ eyeing tool to allow access to encrypted data on smartphones

Deputy Attorney General Rod Rosenstein.
Deputy Attorney General Rod Rosenstein. Photo: Win McNamee / Getty Images

The Justice Department is in "a preliminary stage" of discussions about requiring tech companies building "tools into smartphones and other devices" that would allow law enforcement investigators to access encrypted data, the New York Times reports.

Why it matters: This has been on the FBI's mind since 2010, and last month the White House "circulated a memo...outlining ways to think about solving the problem," officials told the Times. Both FBI Director Christopher Wray, and Deputy Attorney General Rod Rosenstein, support finding ways for law enforcement to access data without compromising devices security.

Haley Britzky 1 hour ago
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Media tycoon Barry Diller talks #MeToo

 IAC & Expedia, Inc. Chairman & Senior Executive Barry Diller
IAC & Expedia, Inc. Chairman & Senior Executive Barry Diller. Photo: Cindy Ord / Getty Images for Yahoo

Barry Diller, chairman of mega-media and Internet company IAC, told the New York Times he thinks "all men are guilty," when it comes to "the spectrum" of the #MeToo movement.

"I hope in the future for some form of reconciliation. Because I think all men are guilty. I’m not talking about rape and pillage. I’m not talking about Harveyesque. I’m talking about all of the spectrum. From an aggressive flirt. Or even just a flirty-flirt that has one sour note in it. Or what I think every man was guilty of, some form of omission in attitude, in his views."

Why it matters: The #MeToo movement has rocked Hollywood and the media industry. Diller told the Times he sees the effects of this "in our companies, where the relationships between people are changing."