Washington, Dec 3 | US President Donald Trump has said that he will immediately restore tariffs on all imports of steel and aluminium from Brazil and Argentina.
“Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers,” Efe news quoted the US President as saying in a tweet on Monday.
“Therefore, effective immediately, I will restore the Tariffs on all steel & aluminium that is shipped into the US from those countries,” he added.
In May 2018, the Argentine government announced that it would put limits on its aluminium and steel exports to the US in order to avoid the tariffs announced by Trump.
A few days later, the Brazilian government accepted an agreement with the US on quotas, under which it accepted a 10-per cent tariff on aluminium and limits on its steel sales.
The US President demanded the Federal Reserve to lower interest rates.
“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,” he said.
Monetary manipulation, according to Trump, “makes it very hard for our manufactures & farmers to fairly export their goods.”
“Lower Rates & Loosen – Fed!” the US President added.
“US Markets are up as much as 21 per cent since the announcement of Tariffs on 3/1/2018,” the US President said in another tweet, “and the US is taking in massive amounts of money (and giving some to our farmers, who have been targeted by China)!”
The currencies of Chile, Colombia and Brazil hit historic lows against the dollar last week due to political instability, pending reforms, popular demands for social equality and growing uncertainty due to a trade war with no truce in sight.
In Argentina, despite last year’s incessant devaluation, the dollar remained stable.
After three consecutive cutbacks, model interest rates in the US are currently between 1.5 and 1.75 per cent, while the Fed generally believes that further adjustments are unnecessary.
Last week in its report known as the “Beige Book,” the Fed indicated that the US economy maintained a “modest” growth between October and mid-November, and presents a generally “positive” perspective of inflation under control as the year ends.
For its part, the US Commerce Department reported last Friday that the economy grew at an annual rate of 2.1 per cent between July and September, two-tenths more than was estimated a month ago, and a tenth more than the 2 per cent growth in the previous quarter.
Private economists are more optimistic with regard to the progress of the US economy than in past months, above all in light of the outlook that the Trump government will reach an accord with China that puts an end to the trade war with that economic giant.
Optimism about a swift agreement that will eliminate the tariffs imposed by the two trade partners has led to stock market records being broken.
In September, Brazil’s Foreign Minister Ernesto Araujo said during a visit to Washington that his government and the US would soon reach a free trade agreement but gave no specific date when that would happen.
The Brazilian official said the governments of Trump and Jair Bolsonaro were negotiating “in generic terms” and that the goal was to determine quotas for the exchange of specific goods, such as meat and steel, so that later a deal can be reached that eliminates or substantially lowers tariffs.
According to the Office of the US Trade Representative (USTR), trade in goods and services between the US and Brazil added up to $103 billion in 2018.