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Trump's tweet hints at metal tariffs; Brazil and Argentina express concerns

Jair Bolsonaro, an avowed Trump fan who has sought closer US ties, said in local radio interview that he would call his US counterpart, who he was confident would listen to Brazil's concerns

Reuters  |  Washington 

Donald Trump speaking at Economic Club. Photo: Reuters
Donald Trump | Photo: Reuters

US President on Monday said he would restore tariffs on US steel and aluminum imports from Brazil and Argentina, surprising officials in the two South American countries who sought explanations.

Emerging market stocks and the highly sensitive Mexican peso slid to session lows following Trump's early morning post on Twitter that gave no details on the plan.

Representatives for the Office of the US Trade Representative could not be reached for comment.

"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 US from those countries," Trump wrote.

Brazil's President Jair Bolsonaro, an avowed Trump fan who has sought closer US ties, said in local radio interview that he would call his US counterpart, who he was confident would listen to Brazil's concerns.

"Their economy is not comparable with ours, it's many times bigger. I don't see this as retaliation," Bolsonaro said in a radio interview with Brazil's Radio Itatiaia.

"I'm going to call him so that he doesn't penalize us ... Our economy basically comes from commodities, it's what we've got. I hope that he understands ...and I'm almost certain he'll listen to us," he said.

Argentine Production Minister Dante Sica said Trump's announcement was "unexpected" and he was seeking talks with US officials. Additionally, Argentina's Foreign Ministry said it will begin negotiations with the US State Department.

Trump's tweet also urged the Federal Reserve to lower interest rates so countries "no longer take advantage of our strong dollar. Lower Rates & Loosen - Fed!"

Trump has repeatedly urged the US central bank to lower rates to below zero, but Fed policymakers have been reluctant. Fed policy makers hold their next meeting on Dec 10-11.

Pre-market shares in US steelmakers rose on Monday, with United States Steel Corp up 1.2% and AK Steel Holding rising 2.5% before the bell.

In Brazil, steelmakers fell sharply as the market opened but quickly reversed losses. Shares in Brazil's Cia Siderurgica Nacional SA, Usiminas and Gerdau SA were up 1.5%, 1.4% and 0.5% in mid-morning trade, respectively.

Brazil's benchmark Bovespa equities index was up 0.9%. The country's currency, the real, initially fell around 0.5% at the open, nearer to last week's record low. But it recovered to trade stronger at 4.2230 per dollar.

First Published: Mon, December 02 2019. 20:20 IST
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