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.

Image:The European Union could target US orange juice exports in the dispute

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.

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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."

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