Reuters
- President Trump announced on Monday that he's imposing new steel and aluminum tariffs on Brazil and Argentina.
- It's a stunning move that opens new fronts and widening his global trade war into two of the largest economies in South America.
- In a tweet, Trump blamed both nations for devaluing their currencies and hurting American farmers in the process.
- Economists, though, reject the idea that Argentina and Brazil have tried artificially weakening their currency.
- Some have said the President Trump is trying to dig himself out of a hole in the trade war with China instead, seeking to pressure Buenos Aires and Brasilia into limiting their cooperation with Beijing as it buys more of their goods.
- Visit Business Insider's homepage for more stories.
President Trump announced on Monday that he's imposing new steel aluminum tariffs on Brazil and Argentina. It's a stunning move that opens new fronts and widening his global trade war into two of the largest economies in South America.
In a tweet, Trump blamed both nations for devaluing their currencies, and hurting American farmers in the process.
Weaker currencies would make Argentine and Brazilian goods cheaper on international markets compared to US farm goods.
Economists, though, reject the idea that Argentina and Brazil have tried artificially weakening their currency. And they weren't highlighted on an annual Treasury Department report released in May which officially designates nations as currency manipulators.
Some have said the President Trump is trying to dig himself out of a hole in the trade war with China instead, seeking to pressure Buenos Aires and Brasilia into limiting their cooperation with Beijing as it buys more of their goods.
"I don't think this has a whole lot to do with steel; this is a China issue," Fernando Cutz, a Western Hemisphere expert at The Cohen Group, told the Washington Post. "If USTR wants to maximize a trade deal with China, they need to put pressure on China. But if China figures out how to replace the U.S. markets with Brazil and Argentina, that's not creating pressure."
As China rolled back purchases of US agricultural products over the past year, they've bought more pork, soybeans, and other goods from other countries.
Brazil has been a big winner from the trade war, particularly their soybean farmers. According to a US Department of Agriculture released earlier this year, Brazil's share of the Chinese soybean market surged to 77% in a period ending this February.
That's in stark comparison to the United States, which which saw its portion of the market plummet to 4% from around 30% in 2018.
Back in September, Argentina inked a deal with China allowing its farmers to export soymeal starting next year, a decision Beijing had long balked at even though it was the top of purchaser of Argentine soybeans, Reuters reported.
The loss of export markets creates significant hurdles for US farmers trying to regain them, according to Matt McAlvanah, the spokesperson for Farmers for Free Trade, a pro-trade advocacy group.
McAlvanah previously told Business Insider: "It's very difficult to regain markets farmers have spent decades cultivating. These relationships are built over time, they're built on trust - and when they go away overnight, they don't come back overnight."
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, 2019Share of China's Soybean Imports (U.S. down dramatically, Brazil up substantially, Argentina rising): {@theterminal chart link: https://t.co/ySjG7G6eIn } pic.twitter.com/dQO4nLoKRz
- Michael McDonough (@M_McDonough) December 2, 2019