Trump's metals tariff tweet roils Brazil and Argentina

Nellie Chapman
December 4, 2019

In Argentina, investors are on the sidelines waiting for a new direction to the economy, which will be set by president-elect Alberto Fernandez when he takes office next week. Lighthizer said his office "is focused on countering the growing protectionism of European Union member states, which unfairly targets US companies, whether through digital services taxes or other efforts that target leading USA digital services companies". In the first 10 months of the year, Brazil has shipped $25.5 billion in farm products including soybeans and pork to China.

Navarro called SEIA "a loose confederation of Chinese solar companies seeking to destroy American solar manufacturing jobs and USA solar installers that want cheap Chinese panels and don't care how many American jobs are destroyed by China's heavily subsidized industry".

Both Brazil and Argentina were exempted from 25 percent steel tariffs past year. And deepening bilateral relations benefited both countries, particularly Brazil.

The US imported almost 169,000 tons of steel from Argentina previous year, representing more than $220 million in trade. "So they really have had a significant impact on total steel imports".

President Donald Trump imposed the four-year tariff program on imported panels in early 2018, starting at 30% and dropping by five percentage points each year.

After a brief spike in steel prices, US steel producers have struggled since the Trump administration put tariffs into place a year ago.

Trump announced his decision to restore the metals tariffs on imports from Brazil and Argentina with an early morning tweet. "Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the US from those countries", tweeted Trump.

He has also urged the US Central Bank to cut interest rates to weaken the dollar.

Federal Reserve to act, "so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies". "Because it is very unfair to our manufacturers and very unfair to our farmers".

Trump has repeatedly urged the US central bank to lower rates to below zero, arguing that negative rates in Europe and elsewhere give those countries a competitive advantage.

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Trump has been implementing or threatening tariffs against a number of countries in an attempt he describes as rebalancing an unfair global trade imbalance.

Argentina's production ministry said the country has exported around $520 million in steel and aluminum to the United States so far this year after exporting $700 million in 2018.

"He uses tariffs as central to his strategy", he said, adding that through tariffs, Trump wants to preserve his electoral standing in states, particularly in the upper Midwest, where there has been intensive production of steel and aluminum.

Jair Bolsonaro was sworn in as the country's president in January.

"I'll talk to Paulo Guedes now".

"They're starting to tax other people's products so, therefore, we go and tax them", Mr Trump said yesterday, ahead of a North Atlantic Treaty Organisation summit in London.

In a pre-dawn tweet on Monday, Mr Trump said he was ordering new tariffs on steel and aluminium from Brazil and Argentina to counter what he called a "massive devaluation of their currencies" at the expense of American farmers. The administration reached an agreement with both countries to cap their metal shipments to the United States under a quota system.

The president started by announcing steel tariffs on Brazil and Argentina. But it also signaled that it planned no further interest rate cuts absent clear evidence of a worsening USA economic outlook.

"The news is marginally favorable for USA steelmakers and marginally negative for Brazil", a Citi report said.

Brazil's Steel Institute said it was perplexed by Trump's decision.

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