President Donald Trump on Monday reinstated tariffs on steel and aluminum from Brazil and Argentina, citing the negative impact of currency devaluation in those countries on American farmers.
"Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers," Trump wrote in an early morning tweet that marked the first time he has connected tariffs to foreign currency. "Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.
Brazil and Argentina both received waivers last August that exempted them from the 25 percent steel tariffs and 10 percent aluminum tariffs that the White House introduced in May 2018. Those tariffs, implemented under the guise of national security measures, prompted outrage from America’s closest allies and major trading partners.
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“Their economy is not comparable with ours, it’s many times bigger. I don’t see this as retaliation,” said Brazil’s President Jair Bolsonaro, who has touted his friendship with Trump, in an interview on Monday, according to Reuters. “I’m going to call him so that he doesn’t penalize 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 told Brazil’s Radio Itatiaia.
In a series of tweets, Trump also noted Monday that the stock market is up "as much as 21% since the announcement of Tariffs on 3/1/2018 - and the U.S. is taking in massive amounts of money (and giving some to our farmers, who have been targeted by China)!"
He also repeated his desire for the Federal Reserve to lower rates, blaming the central bank for making it "very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen - Fed!"
Trump has repeatedly pushed for lower rates, and has even promoted a negative rate, which is traditionally only implemented in times of severe economic distress.
The Fed has sliced rates three times so far this year in response to a slowing global economy.
Some economists note that tariffs fail to distinguish between America's trade allies and countries such as China, which the U.S. has accused of illegal trade practices, and with whom Trump has been embroiled in a monthslong retaliatory tariff spat.