*

Tariff increases on steel, aluminum affect Canada and

Mexico

significantly

*

UK exempt from increased tariffs due to preliminary trade

deal

*

Trading partners urged to submit proposals to avoid

"Liberation

Day" tariffs

By Julia Payne, Jasper Ward

PARIS, June 4 (Reuters) - Washington doubled its tariffs

on steel and aluminum imports on Wednesday, when President

Donald Trump's administration also expects trading partners to

make "best offers" to avoid other punishing import levies from

taking effect in early July.

Maros Sefcovic, the trade negotiator for the European Union,

was due to meet U.S. Trade Representative Jamieson Greer in

Paris, with the 27-nation bloc set to make its case for cutting

or eliminating threatened tariffs on European imports.

Late on Tuesday, Trump signed an executive proclamation that

activates from Wednesday a hike in the tariffs on imported steel

and aluminum to 50% from the 25% rate introduced in March.

"We started at 25 and then after studying the data more,

realized that it was a big help, but more help is needed. And so

that is why the 50 is starting tomorrow," White House economic

adviser Kevin Hassett told a steel industry conference in

Washington on Tuesday. The increase came into effect at 12:01

a.m. (0401 GMT).

The increase applies to all trading partners except Britain,

the only country so far that has struck a preliminary trade

agreement with the U.S. during a 90-day pause on a wider array

of Trump tariffs. The rate for steel and aluminum imports from

the UK - which does not rank among the top exporters of either

metal to the U.S. - will remain at 25% until at least July 9.

The United States imports about a quarter of all its steel, and

Census Bureau data shows the increased levies will hit the

closest U.S. trading partners - Canada and Mexico - especially

hard. They rank No. 1 and 3, respectively, in steel shipment

volumes to the U.S.

Canada will be even more exposed to the aluminum levies

since it exports to the U.S. roughly twice as much as the rest

of the top 10 exporters' volumes combined. The U.S. gets about

half of its aluminum from foreign sources.

Prime Minister Mark Carney's office said Canada was "engaged

in intensive and live negotiations to have these and other

tariffs removed."

Mexico Economy Minister Marcelo Ebrard reiterated that the

tariffs were unsustainable and unfair, especially given that

Mexico imports more steel from the U.S. than it exports there.

The increase in the levies jolted the market for both metals

this week, especially for aluminum, which has seen price

premiums more than double this year. With little capacity to

increase domestic production, U.S. import volumes are likely to

be unaffected unless the price increases undercut demand.

'BEST OFFER' DUE DATE

Wednesday is also when the White House would like trading

partners to propose deals that might help them avoid Trump's

hefty "reciprocal" tariffs on imports across the board from

taking effect in five weeks.

U.S. officials have been in talks with a number of countries

since Trump announced a pause on those tariffs on April 9, but

so far only the UK deal has come to fruition. Even that pact,

which provided the basis for the carve out from the metals

tariffs, is more of a preliminary framework for more talks.

Reuters reported on Monday Washington was asking countries

to list their best proposals in a number of key areas, including

tariff and quota offers for U.S. products and plans to remedy

any non-tariff barriers.

In turn, the letter promises answers "within days" with an

indication of a "landing zone," including what tariff rates

countries can expect after the 90-day pause ends on July 8.

At issue for most trading partners is whether they retain

the current baseline rate of 10% on most exports to the U.S.

after that date, or something sharply higher in many cases.

Separately, alarm over China's hold on the critical minerals

market is growing as global automakers joined U.S. counterparts

to complain that its restrictions on exports of rare earth

alloys, mixtures and magnets could cause production delays.

China's decision in April to suspend exports of a wide range

of rare earths and related magnets has upended the supply chains

central to automakers, aerospace manufacturers, semiconductor

companies and military contractors around the world.

Uncertainty around U.S. trade policy is creating havoc for

businesses around the world. On Wednesday, French spirits group

Remy Cointreau abandoned its 2030 sales growth

ambitions, saying tariffs, slow U.S. sales and high uncertainty

could derail its plans for this financial year and beyond.

German engineering lobby group VDMA also blamed Trump's

tariff policies and the resulting market uncertainty for a 6%

drop in orders plant and equipment makers reported in May.

(Additional reporting by Alexandra Alper in Washington, Brendan

O'Boyle in Mexico City, Ismail Shakil in Ottawa, Kiyoshi

Takenaka and John Geddie in Tokyo; Writing by Dan Burns and Mark

John; Editing by Lincoln Feast, Stephen Coates and Tomasz

Janowski)