President Donald Trump on Monday said he would restore tariffs on steel and aluminum imported from Brazil and Argentina, accusing both countries of devaluing their currency and hurting U.S. farmers.
The president also said that the Federal Reserve should lower rates in order to devalue the U.S. dollar, which would make U.S. products more competitive on the global market place.
Both South American nations were among a group of U.S. allies that Trump had exempted from steel and aluminum tariffs in March 2018.
Hours before he was set to depart Monday for a NATO conference in London, Trump tweeted that “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.”
Brazil is grappling with stubborn double-digit unemployment, and its economy is headed toward its third straight year of roughly 1% growth, following two years of deep recession.
Brazil has also been moving closer to China in recent months, as extensively reported by Breitbart News. Brazilian President Jair Bolsonaro – who campaigned as a hardline anti-communist against China’s invasion of the Brazilian economy – signed eight trade agreements with dictator Xi Jinping in October.
Bolsonaro, speaking in Brazil in October, told reporters that “Brazil needs China, and China needs Brazil” and urged Chinese companies to invest in his country.
Argentina is mired in an economic crisis with rampant inflation, deep indebtedness, widespread poverty and a currency that has plunged under the leadership of President Mauricio Macri, who came to power in 2015 with promises to boost South America’s second-largest economy. Macri was defeated in elections in October and will leave office next week.
Trump said the U.S. 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.” Trump said such devaluation “makes it very hard for our manufactures & farmers to fairly export their goods.
“Lower Rates & Loosen – Fed!” he admonished the central bank.
Trump has repeatedly criticized Fed chairman Jerome Powell for not cutting interest rates as much as the Republican president would like. Fed officials believe that the U.S. economy should grow around 1.8 percent a year, near its current pace, while Trump believes the U.S. economy should be growing much faster.
At its most recent meeting, in October, the Federal Reserve cut short-term interest rates for a third time this year to try to support the U.S. economy. But it also signaled that it planned no further interest rate cuts absent clear evidence of a worsening U.S. economic outlook.
Trump’s trade war with China hurt U.S. farmers after Beijing retaliated when the president imposed levies on hundreds of billions of dollars of Chinese-made goods. Trump falsely claims China is paying the U.S. billions and billions of dollars in tariffs.
He also has earmarked nearly $30 billion for farmers to help make up for their losses.
–The Associated Press contributed to this report.
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