Trump says he will reimpose steel and aluminum tariffs on Brazil and Argentina, opening new trade war fronts

The White House says the two nations are “presiding over a massive devaluation of their currencies. which is not good for our farmers.”

President Trump said he would impose tariffs, effective immediately, on all steel and aluminum shipped into the United States from Brazil and Argentina.

“Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers,” Trump said in Monday morning tweet. He then directed his attention to the Federal Reserve, saying the central bank should “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 [manufacturers] & farmers to fairly export their goods. Lower Rates & Loosen — Fed!”

The surprise announcement came after it appeared as though the White House was preparing to dial back its adversarial trade approach in the lead up to next year’s election. The administration appeared close to a deal with House Democrats to revamp the North American Free Trade Agreement, and tensions with China had eased in recent weeks.

The tariffs took aim at one of the most vital industries in Brazil at a particularly vulnerable economic time. Unemployment is above 10 percent and the economy has stalled. The steel industry, long one of the country’s economic engines, has been looking increasingly wobbly as well, slashing growth projections earlier this year.

Brazilian steel exports to the U.S. accounted for roughly $2.6 billion last year — making the U.S. one of Brazil’s biggest markets for steel — and analysts expected the tariffs to be painful.

In Argentina, where steel and aluminum exports account for roughly $700 million, the unexpected economic news comes at a time when the country is undergoing a transition of power. If the tariffs persist, they will be one of the earliest diplomatic tests to face the incoming presidency of Alberto Fernández, a leftist politician who will take office in a little less than a week. Argentina’s troubles have impacted Brazil’s economy, though it’s unclear what actions triggered the announcement from Trump.