Published: Mon, December 02, 2019
Global News | By Blake Casey

Trump says he will restore tariffs on Brazil, Argentina metal imports

Trump says he will restore tariffs on Brazil, Argentina metal imports

U.S. President Donald Trump said Monday he would restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, surprising officials in the two South American countries and prompting them to seek explanations.

Hours before he was set to depart Monday for a North Atlantic Treaty Organisation 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".

Trump accused both countries of manipulating their currencies to hurt United States farmers, and he paired his action with criticism of the Federal Reserve, notes Bloomberg, which sees the morning moves as significant. Trump said such devaluation "makes it very hard for our manufactures & farmers to fairly export their goods".

Brazil's President Jair Bolsonaro, an avowed Trump fan who has actively sought closer US ties, said in local radio interview that he did not think Trump's decision was a form of retaliation. He announced the actions in a tweet and in doing so, criticized the Fed for not devaluing the dollar by lowering rates and loosening policy.

Representatives for the Office of the U.S. Trade Representative could not be immediately reached for comment.

Both South American nations were among a group of USA allies that Trump had exempted from steel and aluminum tariffs in March 2018.

The president also said that the Federal Reserve should lower rates in order to devalue the US dollar, which would make USA products more competitive on the global market place.

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Both countries, especially Brazil, have been seen as American allies during the Trump presidency.

At its most recent meeting, in October, the Federal Reserve cut short-term interest rates for a third time this year to try to support the US economy.

He has also urged the US Central Bank to cut interest rates to weaken the dollar. A source familiar with Brasilia's reaction rejected the US claim of currency manipulation, noting the central bank was working to lift the real.

He also has earmarked almost $30 billion for farmers to help make up for their losses.

Trump imposed 25 percent tariffs on imported steel and 10 percent levies on aluminum imports in March 2018, citing national security concerns, though Brazil and Argentina were granted exemptions.

Domestic demand has slumped along with the energy sector as drillers pull back on purchases of steel pipe. It has laid off workers and shut down some of its blast furnaces.

Shares of USA steelmakers rose on Monday, with United States Steel Corp X.N up 3.0% at $13.52 in afternoon trading and AK Steel Holding AKS.N rising 5.8% to $2.92.

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