Trump is expected to impose tariffs on steel and aluminum imports this week, a move certain to affect South Korean steel producers. The exact timing was unclear as the tariff documentation had to be drafted and go through a variety of reviews, a process that takes days, an administration official said.
The S&P 500 Index reversed losses of as much as 0.6 per cent after hedge fund billionaire Ray Dalio called Mr Trump's threat of a trade war "political show".
The World Trade Organisation (WTO) has warned that U.S. president Donald Trump is risking an economically damaging trade war if he goes ahead with plans to impose steep tariffs on steel and aluminium imports.
They are "safeguard" tariffs, a kind of emergency shield erected to stop a sudden, unforeseen and damaging import surge that could seriously damage a particular industry.
The news has played well to workers in the USA steel and aluminium industries, which are largely concentrated in the Midwest "rust belt".
The statement from the top Republican in the House comes as the Trump administration is arguing that the tariffs are needed to preserve American steel and aluminum and warning that North American neighbors Canada and Mexico will not get any relief unless they agree to a fair trade deal.
The tariffs would also hit other US allies - Britain, Germany, South Korea, Turkey and Japan.
Trump's tweet helped push the Canadian dollar down to $C1.2988 to the United States dollar, the lowest level since July 7, 2017.More news: China says it does not want a trade war with the US
Mr Trump, who has long railed against what he deems unfair trade practices by China and others, said he planned to levy penalties of 25% on imported steel and 10% on aluminium imports from next week.
On Thursday, President Trump shocked global markets by announcing steep tariffs on imported steel and aluminum. "May's office says she noted that multilateral action was the only way to resolve the problem of global overcapacity".
One steel industry source said Mr. Navarro's idea is to allow companies or industries to petition the US government to have their products exempted from tariffs if they can show that including them is hurting USA business or consumers.
He believes that the price of steel and aluminum prices will go up and in turn US -made products will also be more expensive for both consumers in America and around the world. Over the weekend, Trump advisers gave no indication that any countries would be excluded from the tariffs.
At the NAFTA talks in Mexico City, negotiators agreed on two more topic areas and discussed details of Canada's idea to redraw the way regional content for cars is measured.
It now looks impossible for negotiators to meet their goal of getting an agreement by the end of this month, especially amid the prospect of escalating trade tensions from the steel dispute. They laugh at what fools our leaders have been.
Tim Phillips, president of the Koch Brothers-backed Americans for Prosperity, noted that Trump narrowly won in Iowa and Wisconsin, two heavily rural states that could suffer if countries impose retaliatory tariffs on American agricultural goods.