President Trump is abruptly reimposing tariffs on steel and aluminum imported from Brazil and Argentina.
Trump announced the move in a pair of tweets Monday, saying he was acting in response to “massive devaluation” of the two countries’ currencies. Brazil and Argentina had been exempted from Trump’s 25% tariff on imported steel and his 10% tariff on imported aluminum since May of last year.
Brazil is a major supplier of imported steel to the U.S. The declining value of currencies from Brazil and Argentina has given their exports an advantage in international markets, which Trump said is bad for U.S. farmers.
During the global trade war, China has cut back on purchases of U.S. farm goods such as soybeans, and turned to South America for alternative supplies.
In his tweets, Trump also called on the Federal Reserve to cut interest rates further in hopes of weakening the dollar, which would give a lift to U.S. exports.
“Lower Rates & Loosen,” Trump wrote, arguing that a strong dollar “makes it very hard for our manufacturers & farmers to fairly export their goods.”
While interest rates do affect the value of the dollar, the Federal Reserve has not traditionally been guided by that. Instead, the central bank aims for stable prices and maximum employment, leaving currency policy to the Treasury Department.
Trump has repeatedly urged the Fed to cut interest rates. The central bank has cut rates three times since July, by a total of 0.75%. Fed officials are widely expected to leave rates unchanged when they meet next week.
Trump originally imposed the steel and aluminum tariffs in March of 2018, relying on authority from a seldom-used law from the 1960s, designed to protect domestic industries deemed vital to national defense.
The move did give a temporary lift to American steel and aluminum makers. However, it also raised prices for U.S. companies that use the metals. Since then, steel prices have fallen amid slumping demand. U.S. Steel announced layoffs this fall and posted a third-quarter loss of $35 million.