WASHINGTON — President Donald Trump said Monday that he would impose tariffs on steel and aluminum from Brazil and Argentina, a move that would shatter previous agreements struck with those countries and widen a global trade war. Trump, in a message on Twitter, accused Brazil and Argentina of manipulating their currencies and hurting American farmers. “Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.” The Trump administration never imposed tariffs on Brazilian and Argentine metals, though it did force them to limit shipments to the United States under a quota system last year. The United States initially exempted Brazil, Argentina and other countries from the president’s sweeping metal tariffs in March 2018, with the United States saying it would continue negotiations with those countries to improve their trade terms. In May 2018, the United States announced that it had reached an agreement with the countries that would cap their metal shipments at a specific volume each year. It is unclear what prompted Trump to reverse those agreements. But last week the Brazilian currency, the real, fell to a record low against the dollar after the country’s economic minister signaled that he was not concerned about exchange-rate fluctuations.
Argentina’s peso has weakened with the country in the midst of an economic crisis.
Both economists and government officials have rejected the idea that Brazil and Argentina are manipulating their currencies. But those currency movements have made Brazilian and Argentine goods cheaper to purchase abroad, a dynamic that is particularly important for the agricultural sector and the U.S.-China trade war. As of Monday morning, neither the Office of the U.S. Trade Representative nor the Commerce Department had issued the formal notices that would put tariffs on Brazil and Argentina into effect. If they are imposed, the tariffs stand to do considerable damage to South America’s two biggest economies at a time when Argentina is in recession and Brazil confronts high unemployment and anemic growth. The announcement appeared to take the Brazilian and Argentine governments by surprise. “This was completely unexpected,” said Dante Sica, Argentina’s minister of production. “I was in Washington last week, and I talked to a lot of people, and there was no sign whatsoever that there would be any kind of change.” The Brazil Steel Institute, which represents the interest of steel exporters, said in a statement that it found the new tariffs “perplexing” and warned that it would harm companies in both countries.