Trump to re­store steel tar­iffs on Brazil and Ar­gentina

The Guardian - - Financial - Do­minic Rushe

Donald Trump an­nounced yes­ter­day that he will re­store tar­iffs im­me­di­ately on all steel and alu­minium shipped into the United States from Brazil and Ar­gentina.

In a sur­prise move, Trump ac­cused the two coun­tries of de­valu­ing their cur­ren­cies and hurt­ing US farm­ers. It prompted a sell-off on Wall Street, with US stock mar­kets fall­ing on fears of ris­ing trade ten­sions.

“Brazil and Ar­gentina have been pre­sid­ing over a mas­sive de­val­u­a­tion of their cur­ren­cies, which is not good for our farm­ers,” Trump said in a tweet.

The an­nounce­ment came as a sym­bolic slap in the face for Brazil’s pres­i­dent, Jair Bol­sonaro, who has po­si­tioned him­self as Trump’s clos­est ally in the Amer­i­cas.

Bol­sonaro told Brazil’s Rá­dio Ita­ti­aia: “I’m go­ing to call him so that he doesn’t pe­nalise us … Our econ­omy ba­si­cally comes from com­modi­ties, it’s what we’ve got. I hope that he un­der­stands and that he doesn’t pe­nalise us with this, and I’m al­most cer­tain he’ll lis­ten to us.”

Brazil’s main steel in­dus­try body, In­sti­tuto Aço Brasil, said it was “per­plexed” by the de­ci­sion and ar­gued that the move would hurt US busi­nesses that use Brazil­ian steel.

Ar­gentina’s pro­duc­tion min­is­ter, Dante Sica, called Trump’s an­nounce­ment “un­ex­pected” and said he was seek­ing talks with US of­fi­cials.

The US’s long-run­ning trade war with China has ben­e­fited Ar­gentina and Brazil as China has bought more agri­cul­tural goods from the Latin Amer­i­can coun­tries in re­tal­i­a­tion. But both coun­tries are strug­gling eco­nom­i­cally. Brazil’s cur­rency, the real, hit a record low last week and un­em­ploy­ment is above 10%. In Ar­gentina in­fla­tion is above 50% and a third of the pop­u­la­tion live in poverty.

The news came af­ter a week in which it ap­peared that the White House was tem­per­ing its long-run­ning trade dis­putes in the lead-up to next year’s elec­tion. Trump ad­min­is­tra­tion of­fi­cials had hoped to sign a “phase one” deal with Bei­jing, re­mov­ing some tar­iffs, be­fore 15 December, when the US is due to im­pose an ad­di­tional 15% tar­iff on about $156bn (£121bn) of Chi­nese prod­ucts.

The com­merce sec­re­tary, Wilbur Ross, told Fox Busi­ness yes­ter­day that the new tar­iffs were still on the ta­ble. “If noth­ing hap­pens be­tween now and then, the pres­i­dent has made quite clear he’ll put the tar­iffs in,” he said.

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