The Trump Administration’s trade policy took another unexpected turn following the President’s Monday morning tweets on December 2, 2019. President Trump announced his intention to re-impose steel and aluminum tariffs on Argentina and Brazil due to “massive devaluation of their currencies.” In March 2018, President Trump imposed 25% duties on all foreign steel imports and 10% duties on all aluminum imports, but spared key U.S. allies such as Brazil and Argentina by implementing an absolute quota on imports of steel and aluminum products from these two countries. Trump explained in his tweets “the Federal Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufacture[r]s & farmers to fairly export their goods.”
The move to restore steel and aluminum tariffs is likely to cause major tension between the trading partners. Census Bureau data indicates that Brazil accounts for nearly 11% of all steel imports to the U.S., which is the second most behind Canada. After hearing news of the tariffs, Brazilian President Bolsonaro stated in an interview that Trump will listen to his concerns because “our economy basically comes from commodities.”