Metal tariffs set by Trump, spins up Brazil and Argentina

US President Donald Trump on Monday said he would restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, surprising officials in the two South American countries and urging them to seek explanations.

Emerging market stocks and the highly sensitive Mexican peso slumped to sessions following Trump’s pledge, which came in an early-morning Twitter post that did not provide further details on the planned trading action.

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

“Brazil and Argentina have been leading a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore Tariffs on all Steel & Aluminum shipped to the US by them places, “he wrote.

Brazilian President Jair Bolsonaro, a keen Trump fan who has been actively seeking American connection, said in a local radio interview that he did not think

decision was a form of retaliation. However, he also expressed hope that Trump will show mercy for Brazil’s commodity-based economy.

“I’m going to call him so he doesn’t penalize us,” Bolsonaro said. “Our economy basically comes from commodities, that’s what we have. I hope he understands and that he doesn’t punish us with that, and I’m almost sure he’ll listen to us.”

Argentine Production Minister Dante Sica said Trump’s announcement was “unexpected” and that he was seeking talks with U.S. counterparts. In addition, the Argentine Foreign Ministry said it would begin negotiations with the US State Department.

Trump on Monday also urged the Federal Reserve to prevent countries from gaining an economic advantage by devaluing their currencies.

“The Federal Reserve must also act so that countries, of which there are many, no longer take advantage of our strong dollar,” the tweet wrote. “Lower Rates and Release – Fed!”

Trump has repeatedly urged the U.S. central bank to cut rates to below zero, arguing that negative rates in Europe and elsewhere give these countries a competitive advantage.

However, Fed policymakers have been reluctant to take the unorthodox policy steps proven by other global central banks. The US central bank’s policy-making committee holds its next meeting on December 10-11./

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