United States President Donald Trump on Monday said he would restore tariffs on US steel and aluminium imports from Brazil and Argentina, surprising the two South American countries’ officials, who sought explanations.
“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,” Trump tweeted.
Emerging market stocks and the highly sensitive Mexican peso slid to session lows following Trump’s early morning Twitter post, which gave no details on the plan.
Brazilian President Jair Bolsonaro, an avowed Trump fan who has sought closer US ties, said in a local radio interview that he would call his US counterpart, who he was confident would listen to Brazil’s concerns.
“Their economy is not comparable with ours; it’s many times bigger. I don’t see this as retaliation,” Bolsonaro said in a radio interview with Brazil’s Radio 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 I’m almost certain he’ll listen to us,” he said.
Argentine Production Minister Dante Sica said Trump’s announcement was “unexpected” and he was seeking talks with US officials. Additionally, Argentina’s Foreign Ministry said it will begin negotiations with the US Department of State.
Trump’s tweet also urged the Federal Reserve to lower interest rates so countries “no longer take advantage of our strong dollar. Lower Rates & Loosen Fed!”
Trump has repeatedly urged the US central bank to lower rates to below zero, but Fed policymakers – who hold their next meeting on December 10-11 have been reluctant.
In Brazil, stocks for steelmakers fell sharply as the market opened but quickly reversed their losses.
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Shares in Brazil’s Gerdau SA, Usiminas and Cia Siderurgica Nacional SA were up 0.5 percent, 1.4 percent and 1.5 percent in mid-morning trade, respectively.
Brazil’s benchmark Bovespa equities index was up 0.9 percent. The country’s currency, the real, initially fell around 0.5 percent at the open, nearer to last week’s record low. But it recovered to trade stronger at 4.2230 per US dollar.
US President Trump on Monday said he would restore tariffs on steel and aluminum imports from Brazil and Argentina, saying both nations have been devaluing their currencies.