The measure also affects Brazil Source: AFP
WASHINGTON.- Unexpectedly and without warning, the president of the United States, Donald Trump, announced on Twitter that he will raise tariffs on imports of steel and aluminum from Argentina and Brazil, a blow to the economy in the midst of the crisis that banished the agreement sealed just a year and a half ago by the government of Mauricio Macri to preserve metallurgical exports.
With his mind set on the elections next year, when he will seek his re-election, Trump justified the decision in the renewed strength of the dollar, the advantages left by the devaluation of the peso and the real for Argentina and Brazil in recent months, and the need to protect the country's farmers, one of the pillars of its "base" in several crucial states of the country, who have suffered losses from their trade war with China.RELATED
"Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, and with immediate validity, I will restore the
tariffs on all steel and aluminum sent to the United States from those countries, "Trump announced on Twitter.
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. The Federal …. & – Donald J. Trump (@realDonaldTrump)
December 2, 2019
Concerned about the strength of the dollar, the president urged the Federal Reserve (Fed, in jargon) to prevent countries from "taking advantage" depreciating their currencies, and also insisted that the Fed should lower the interest rate to boost the economy. "Lower rates and relieve, Fed!", The president closed in his message on Twitter.
Trump's decision struck and took by surprise two strategic Washington allies in Latin America, and again showed the way in which Trump subordinates foreign policy to his internal political needs. The move took the two leaders with whom he has a better relationship in Latin America, Mauricio Macri, whom he called "my friend" and has known for more than 30 years, and Jair Bolsonaro, nicknamed "the Trump of the tropics" totally off guard.
Macri and Bolsonaro had worried about building a close bond with the White House. The movement of the Republican president arrived in the epilogue of the government of Macri, with eight days left before Alberto Fernández took office. The Foreign Ministry said it will negotiate a solution, a task that will remain for the next government, and that it could become the first test for the bilateral relationship of the Fernández presidency.
Despite the good link, the Argentine government learned about Trump's decision on Twitter. The same happened with companies. The decision ruined the agreement signed in May 2018, when Trump pledged to maintain a quota of steel and aluminum imports exempt from the new tariffs. At the time, the Macri government considered that agreement "an achievement." Brazil also had a quota, as did other countries, such as South Korea. Before tariffs and quota, Argentina sold steel and aluminum for about US $ 700 million annually to the United States.
"It's unexpected for everyone, for us, for Brazil and for the private sector," he said.
the Minister of Production and Labor, Dante Sica. .
Now, in the prelude to a complicated election year, Trump once again imposes a protectionist stocks seeking to favor the metallurgical industry and farmers. The president needs to shield the support of his coalition in the crucial states of Iowa, Wisconsin, Michigan Ohio and Pennsylvania, struck by his trade war with China. The unknown: what benefit can Trump get from Argentina and Brazil to improve the situation of American farmers, hit by that trade war?
The US Secretary of Commerce, Wilbur Ross, said in an interview with the Fox network that Trump could revive tariffs on China if the signing of the first step of the trade agreement between the two powers is moderated. When asked about tariffs on Brazil and Argentina, Ross said: "Even our friends have to live according to the rules."
The official said he believed Trump was concerned about the impact of currency devaluation was a "fair factor" to be considered. "He felt he had to do something about it," he said, about Trump.
Monica de Bolle, senior economist at the Peterson Institute for International Economics, told
THE NATION that the decision has nothing to do with Argentina or Brazil, but with the recent strength of the dollar, and Trump's need to send a signal to his base at the start of the presidential campaign. Farmers in the United States have suffered a severe setback with the trade war with China, and are one of the pillars of the trump coalition. De Bolle said Trump may be looking to pressure Argentina and Brazil to export less to China, and thus benefit American farmers.
"It's all political, there is no economic reasoning for this," said De Bolle.
Benjamin Gedan, director of the Argentina Project at the Woodrow Wilson Center, rooted Trump's move in US domestic politics rather than in the bilateral relationship with Argentina or Brazil, or in China, whose progress in the region worries Washington.
"This administration has always prioritized economic protectionism, even at the expense of valuable international relations. It could be said that Bolsonaro is President Trump's favorite Latin American leader, but that did not protect him from these measures," Gedan said.
"In many ways, the United States no longer has a foreign policy," he added. "Clearly, the president of exit in Argentina has no influence on the relationship, and the president-elect is badly positioned to request favorable treatment, which Macri got the last time the White House threatened a similar action. But, ultimately instance, this is about internal politics, "he closed.
Trump has always used U.S. import tariffs to achieve political or economic goals. This year, for example, Trump forced the government of Andrés Manuel López Obrador to deploy an offensive against caravans of immigrants from Central America with a threat of import tariffs from Mexico.