Argentina, Brazil threatened with tariffs
Trump: Countries’ devaluing currency hurts US farmers
WASHINGTON — President Donald Trump on Monday accused Argentina and Brazil of hurting American farmers through currency manipulation and said he’ll slap tariffs on their steel and aluminum imports to retaliate.
Trump also called on America’s central bank to take action to prevent other countries from devaluing their currencies.
Both South American nations were among U.S. allies that Trump had exempted from steel and aluminum tariffs in March 2018. The president’s threat to reverse that decision and impose the metals tariffs on Argentina and Brazil is another example of his mercurial approach to trade policy.
Businesses have delayed investments, sapping economic growth, because they don’t know if the agreements Trump reaches with other countries will last or what countries or products he will target next.
Hours before he was to depart Monday for a NATO conference in London, Trump tweeted that “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.”
Hours later, Robert Lighthizer, the president’s chief trade negotiator, released the results of a fivemonth investigation that concluded a French digital services tax discriminated against American internet companies and should be met with tariffs of up to 100 percent on $2.4 billion in products such as cheese, yogurt, sparkling wine and makeup.
The proposal, which awaits a presidential decision, threatens to intensify simmering trans-Atlantic trade friction.
The French tax “discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies,” Lighthizer said in a statement.
Monday’s protectionist flurry came as the president’s “America First” trade policy remains bogged down at the negotiating table and on Capitol Hill less than a year before the 2020 election.
Argentina is mired in an economic crisis with rampant inflation, deep indebtedness, widespread poverty and a currency that has plunged under the leadership of President Mauricio Macri, who came to power in 2015 with promises to boost South America’s second-largest economy. Macri was defeated in elections in October and will leave office next week.
Brazil is grappling with stubborn double-digit unemployment, and its economy is headed toward its third straight year of 1% growth, following two years of deep recession.
Brazilian President Jair Bolsonaro said he has “an open channel” with the American president and might call him to discuss the tariffs.
Rubens Barbosa, a former Brazilian ambassador to Washington, told The Associated Press that Trump is “punishing Brazil’s government and companies without a specific cause.”
Both South American countries have benefited from the U.S. trade war with China. Argentina and Brazil have taken advantage of Chinese import taxes on U.S. farm products to export more agricultural goods to China.
Barbosa suggested Trump’s failure to respond to Bolsonaro’s attempts to improve ties could affect Brazil’s decision on whether to buy 5G wireless technology from China’s Huawei.
Trump has lobbied allies to avoid Huawei over worries its equipment might help Chinese electronic spying. The company denies that claim.
Trump said the U.S. Federal Reserve “should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies.”
The Washington Post contributed.