U.S. President Donald Trump said he would impose tariffs on Argentina and Brazil, accusing those countries of hurting American farmers through currency manipulation.
Trump tweeted Monday that he would place tariffs on steel and aluminum imports from the two South American countries, surprising officials there.
“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,” he wrote.
The two South American countries were among a group of nations that Trump had exempted from these tariffs in March 2018, after they agreed to quotas.
Brazil's government said in a statement it was already in discussions with Washington. President Jair Bolsonaro, who has expressed strong support for Trump, said in a local radio interview Monday that he would call Trump and that he believed the U.S. president would listen to Brazil’s concerns.
Argentina’s production minister, Dante Sica, called Trump's announcement "unexpected" and said he would seek talks with U.S. officials.
Argentina and Brazil have benefited from the U.S. trade war with China, by increasing exports of agricultural goods to China.
They also face domestic economic struggles. Argentina is suffering from high inflation and deep indebtedness, while Brazil has double-digit inflation and had only 1% growth this year. Argentina's economic problems have led to a decline in the peso.
In his tweets, Trump called on the U.S. central bank to take action to prevent other countries from devaluing their currencies.
.....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!— Donald J. Trump (@realDonaldTrump) December 2, 2019
He said devaluation makes it very hard for U.S. manufacturers and farmers "to fairly export their goods."
Share prices of steel manufacturers in the United States rose Monday on the news of the new tariffs on the steel and aluminum imports from Argentina and Brazil.
Brazil's main steel industry body, Instituto Aco Brasil, said that it was "perplexed" by Trump’s decision and said the Brazilian government was not artificially devaluing its real currency.