On Monday, President of United States of America Donald Trump ambushed Brazil and Argentina. He announced a tariffs hike on US steel and aluminum imports from the two countries. The skyrocketing tariff hike shocked South American officials and left them scrambling for answers.
President Trump tweeted early morning saying that the tariffs will be “effective immediately.” He also stated reason for the move and said “Brazil and Argentina have been presiding over a massive devaluation of their currencies which is not good for our farmers.”
Ironically, the opposite is true. Both the countries have been trying to strengthen their respective currencies against the dollar. According to some analysts, the genesis of Trump’s decision may lie in the domestic political impact of his China trade war.
Presidential elections are approaching in the United States and the farmers represent a key demographic for Trump. Amidst this trade war, the competitiveness of U.S. agricultural products becomes really low resulting in profit and escalated business for their Brazilian and Argentine peers.
The head of investment strategy at Martin Currie Kim Catechis said that the trade war between U.S.-China reaped enormous benefits for “country’s soybean farmers”. The trade war between both the countries has resulted in “replacing U.S. soybeans sales into China.”
Representatives for the U.S. State Department and the Office of the U.S. Trade Representative did not respond to a request for comment yet. They did not issue any official statement in this regard.
Brazilian president, Jair Bolsonaro, an avowed Trump fan who has also sought closer ties with the US said he would call his US counterpart and seek mercy.
Bolsonaro said that “I don’t see this as retaliation.” Furthermore, he mentions that he is “going to call him so that he doesn’t penalize us … and I’m almost certain he’ll listen to us.”
On the other hand, Argentine Production Minister Dante Sica said the announcement was “unexpected.” Along with this, he was seeking talks with U.S. officials. Argentine will begin negotiations with the U.S. State Department said Argentina’s Foreign Ministry.