WASHINGTON/RIO DE JANEIRO, Dec 2 (Reuters) – U.S. President Donald Trump ambushed Brazil and Argentina on Monday, announcing he would restore tariffs on U.S. steel and aluminum imports from the two countries in apparent retaliation for currency weakness he said was hurting U.S. farmers.
“Effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump wrote in an early morning tweet that sent officials from both countries scrambling for explanations from Washington. He added that Brazil and Argentina were “presiding over a massive devaluation of their currencies.”
In fact, the opposite is true: Both countries have actively been trying to strengthen their respective currencies against the dollar. The real and the peso have been buffeted by weakness partially linked to Trump’s trade battle with China.
U.S. farmers, who have been hit by the U.S.-China trade war, represent a key demographic for Trump ahead of the November 2020 election. They have watched in vain as the trade war has hurt the competitiveness of U.S. agricultural products, allowing their Brazilian and Argentine peers to get rich off China.
“For many Brazilians, this smells like revenge for their country’s soybean farmers bonanza – they have benefited enormously from the U.S.-China trade war by replacing U.S. soybeans sales into China,” said Kim Catechis, head of investment strategy at Martin Currie.
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