US President Donald Trump has said he will restore tariffs on steel and aluminium imports from Brazil and Argentina in the latest salvo of his global trade war.
The President tweeted: “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.”
Global stock markets dropped after Trump’s announcement. The FTSE 100, which had been around half a per cent higher, was down 0.53 per cent by 3.30pm while Germany’s Dax index was 1.69 per cent lower.
In the US, the Nasdaq index fell 1.14 per cent while the S&P 500 dropped 0.71 per cent. US markets were also shaken by worse-than-expected manufacturing data.
Trump’s decision ends the exemptions both countries secured from levies in May 2018, when the US President slapped tariffs of 25 per cent on steel and 10 per cent on aluminium on countries around the world.
The South American countries are the latest to draw Trump’s ire over their falling currencies. The US labelled China a currency manipulator in August, and in June, Trump accused the Eurozone of deliberately devaluing its currency to gain a trade advantage.
Over the last year, the Argentine peso has shed more than 30 per cent of its value against the dollar, amid a political and economic crisis over the country’s large debts. Meanwhile, the Brazilian real has dropped almost nine per cent this year, drawing Trump’s ire.
Trump also demanded that the US Federal Reserve “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,” he said. “Lower Rates & Loosen – Fed!”
The tariffs come as a blow to Brazilian president Jair Bolsonaro, who has made an effort to be friendly with Trump. Brazil is the third-biggest exporter of steel to the US, meaning the tariffs could hurt the economy.