Trump to reimpose tariffs on Argentine and Brazilian metal exports

Trump blamed currency devaluations in both countries for the move.

In a tweet on Monday morning, he stated: "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 US from those countries."

The US introduced tariffs of 25.0% on imported steel and 10.0% on aluminium in March 2018, but exemptions were then granted to the two Latin American countries.

Since then, however, both countries had seen their currencies fall heavily amid political unrest, interest rate cuts and wider weakness across emerging market currencies. Argentina was also battling a heavy debt burden.

The Brazilian real reached a record low against the dollar last week, and shed another 0.5% following Trump’s tweet, to reach 4.2420 by 1230 GMT. Year-to-date meanwhile, the Argentinian peso had shed nearly 60% of its value against the greenback and was trading at 59.92 as of 1230 GMT.

Trump also tweeted that the 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. This makes it very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen – Fed!”

The Federal Reserve has cut rates three times this year, and its key interest rate is now between 1.5% and 1.75%.

But Trump wanted the central bank to go further, arguing that negative interest rates elsewhere in the world were unfairly disadvantaging America. The European Central Bank’s deposit rate stood at -0.5%.

Policymakers at the Fed were next set to meet on 10 and 11 December.