United States President Donald Trump on Monday said he would restore tariffs on U.S. steel and aluminium imports from Brazil and Argentina, surprising the two South American countries' officials, who sought explanations.
"Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers", Trump wrote on Twitter.
This crisis will be a test for Brazil's president Jair Bolsonaro, often called "Trump of the Tropics", who boasts a close relationship with his USA counterpart. He announced the actions in a tweet and in doing so, criticized the Fed for not devaluing the dollar by lowering rates and loosening policy.More news: Mauricio Pochettino ready to get straight back to work after Tottenham sack
Representatives for the U.S. State Department and the Office of the U.S. Trade Representative did not immediately respond to a request for comment.
Across the country, farm bankruptcies have surged 24% since September 2018, a few months after U.S. trade disputes with China and other countries led to higher tariffs on key farm goods including soyabeans, cotton and dairy, according to analysis by the American Farm Bureau Federation.
Trump on Monday also urged the Federal Reserve to prevent countries from gaining an economic advantage by devaluing their currencies.
Both countries, especially Brazil, have been seen as American allies during the Trump presidency.More news: Kate Middleton, Prince William will appear especially on royal vacations
"Their economy is not comparable with ours; it's many times bigger". But it also signaled that it planned no further interest rate cuts absent clear evidence of a worsening US economic outlook. Their currencies have been buffeted by weakness that analysts partially attribute to Trump's larger trade battle with China. Brazilian President Jair Bolsonaro - who campaigned as a hardline anti-communist against China's invasion of the Brazilian economy - signed eight trade agreements with dictator Xi Jinping in October. Trump falsely claims China is paying the USA billions and billions of dollars in tariffs.
Trump imposed 25 percent tariffs on imported steel and 10 percent levies on aluminum imports in March 2018, citing national security concerns, though Brazil and Argentina were granted exemptions.
Shares of the Pittsburgh company are down 43% over the past year.
AP reporter Mauricio Savarese contributed to this story from Sao Paulo.More news: Pakistan rue not being better prepared for Australia conditions