Trump Slaps Tariffs on Brazil, Argentina metals – and French Champagne
Brazil and Argentina are taking actions that are “not good for our farmers,” said President Trump on Monday, announcing high tariffs on steel and aluminum imports from the South American nations.
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Trump, who announced the tariffs on social media, said the weakening Brazilian real and Argentina peso adversely affect U.S. manufacturing and agricultural exports, making American-made goods more expensive.
In a separate trade action, the Trump administration proposed additional import duties of up to 100% on various types of French cheese and sparkling wine, responding to a French tax on digital services it deemed to be unreasonable and discriminatory. Trump had previously slapped 25% tariffs on a range of European imports, including French wine and cheese.
The Sino-U.S. trade war might have figured in the metals tariffs, since China bought huge amounts of soybeans from Brazil, the world’s largest exporter of the oilseed, after retaliatory tariffs made U.S. soybeans uncompetitive. Beijing also opened the way for imports of soymeal from Argentina, the No. 1 exporter of that soy product.
“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,” tweeted Trump. The tariffs of 25% on steel and 10% on aluminum will replace import quotas on the metals.
Neither Brazil nor Argentina was on the Treasury’s watch list of currency manipulators, said Vox. Both are undergoing economic turmoil. Brazilian President Jair Bolsonaro, a Trump fan who recently opened the door to U.S. wheat imports, said he would try to call Trump and try and talk him out of the tariffs.
“Our steel companies will be very happy and our farmers will be very happy,” Trump told reporters at the White House.
Some trade experts said Trump may intend to peel away Brazil and Argentina as sources of farm goods to China, reported the Washington Post. The president was noncommittal when asked if a deal with China was possible this year. “The Chinese are always negotiating…We’ll see what happens,” he said.
As for the new proposed tariffs on French goods, U.S. trade representative Robert Lighthizer said the administration might investigate digital service taxes in Austria, Italy, and Turkey, too. Lighthizer said his office “is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies, whether through digital services taxes or other efforts that target leading U.S. digital services companies.”
France threatened a “strong” EU response.
Meanwhile, the chairman of the Senate Finance Committee said “by all accounts, a deal is close on USMCA,” the successor to NAFTA, but time is running out for action. “If a deal cannot be reached by the end of this week, I do not see how USMCA can be ratified in 2019,” said chairman Chuck Grassley, Iowa Republican. “As it is, the window of opportunity for 2019 is extremely tight.” House Democrats have pressed the administration for stronger labor, environment, pharmaceutical, and enforcement provisions in the United States-Mexico-Canada Agreement.
Although the tariff payments to farmers were designed to soften the blow of the trade war, they “did not appear to prevent the loss of any House seats” in the 2018 elections, said three analysts who studied voting patterns. Voter support for Republicans declined in areas “most exposed to the retaliatory tariffs, and this was only partially offset by the summer 2018 agricultural subsidies.” In a blog, they said the trade war “may be responsible for five (of the 40 total) House seats lost by Republicans.”