Trump Surprise Tweet Restores Steel and Aluminum Tariffs

-edited

President Trump lashed out at Brazil and Argentina in a surprise Tweet today restoring metal tariffs.

This morning, Trump accused Argentina and Brazil of massive currency devaluation, saying such moves hurt U.S. farmers.

In response, U.S. Restores Steel, Aluminum Tariffs on Argentina and Brazil.

Economists disputed the notion that Brazil’s government is manipulating its currency. The Brazilian real did lose value against the dollar over the past few years, but it was due mainly to market forces, they said.

“Brazil has had a free-floating currency for a long time now, and that isn’t changing,” said economist Carlos Kawal, chief researcher at ASA Bank in São Paulo. “The real is weakening because interest rates are going down and the dollar is strengthening against emerging-market currencies.”

If anything, Brazil’s central bank is trying to beef up, not weaken, the real. As the currency’s decline gained speed last month, the bank sold more than $3 billion of Brazil’s large dollar reserves to put a floor under the real.

Trump an Economic Illiterate

Selling reserves to boost a currency is the wrong thing to do, but it makes a mockery of Trump's claim.

Tariffs will raise the price of steel hurting US car manufacturers still reeling over the GM strike and the trade war with China.

Trump is an economic illiterate and terrible negotiator as well.

How can anyone be in doubt?

Addendum

One of my readers accurately commented: "The notion that Argentina has displayed enough economic competence to manipulate its currency in any direction successfully is an odd one."

Mike "Mish" Shedlock

Comments (17)
No. 1-11
leicestersq
leicestersq

The notion that Argentina has displayed enough economic competence to manipulate it's currency in any direction successfully is an odd one.

2 Replies

Mish
Mish

Editor

That's a good point too

Stuki
Stuki

A side effect of being a permanent front runner in the basketcase race ever since WW2, is that you are also pretty easy to pick on. For example by aspiring runners up in that race, for domestic reasons....

Casual_Observer
Casual_Observer

LOL. No tweet from Trump can be considered a surprise anymore.

njbr
njbr

Currency moves be damned, it's to punish those suppliers that are replacing the US as a key supplier of China's agriculture needs.

Tony Bennett
Tony Bennett

"Trump is an economic illiterate and terrible negotiator as well."

...

yeah, well ... you didn't mention the other important points in the tweets ... playing to the farmers and forcing Powell's hand. DJT (probably) thinks tariffs helps HIM (damn the country) in 2020.

crazyworld
crazyworld

Sorry I disagree, it is time to react seriously because in fact the economic illiterates are at the roots of our present economic and financial disaster be it in USA or (worse) in Europe. They have always had short time maximizing profits views

We can go on and print more and more money in order to keep alive a lot of zombies companies, maintain a blowing pressure on real estate and Stock markets bubbles . In Europe they even speak about (printing) money for an universal minimum wage weather you work or not. In the meantime most people loose their job in the manufacturing and the industrial productions sectors because we are no more competitive. Our big compagnies and industrials grow richer and richer when more and more low price products are imported. "CHINA NO LONGER NEEDS US PARTS IN ITS PHONES "as Mich posted is a clue that our long term benefit in cost of living from extra low prices products imported will not last forever. When there will be nothing left to barter (if we remain unprotected) with countries where workers cost nothing compared to ours, our money will devaluate quickly. We will move to third world countries status (like Greece, Spain… before us)

Tony Bennett
Tony Bennett

“The real is weakening because interest rates are going down and the dollar is strengthening against emerging-market currencies.”

...

The strengthening $US is (for now) self reinforcing as Emerging Markets (and some developed) scramble to find $US as global economy slows to pay their debt priced in $US.

Defaults loom.

Greenmountain
Greenmountain

On the other side Trump loves to watch the stock market rise - and it generally has not disappointed him. But every time he increases tariffs it drops. Is this price he is willing to pay for Powell to drop rates?

Webej
Webej

Anybody who uses a currency other than the dollar is defying the rule of law. How dare they! It is nothing but an attempt to pre-empt the impact of American sanctions and a denial of American extra-territorial justice and law. As if there could be any sovereignty outside of the American State!

If their currency does anything than peg the dollar (no pun intended), it is currency manipulation. Stable-genius-went-to-Wharton-School-of-Business knows his business!

Lots of Americans cannot shed their dollar perspective. Looking out at the countries of Europe, they claim European economies have shrunk b/c their GDP in dollars was less than in 2008 when the Euro was almost €1,60. Never mind that in Euros they grew. How poor are people in Mozambique where a head of lettuce costs less than $0,02 and the rent is $12? They only earn $3 a day. So very poor.

Perhaps the Dems are right after all, and the franchise should be extended to all citizens of the world!

Zardoz
Zardoz

PLAY stupid games! WIN stupid prizes!

Sechel
Sechel

Argentina and Brazil are economic basket cases. He's just piling on. If his goal is being the final straw that collapses their economy he may win. Otherwise he's engaging in stupid policy once again. If Brazil and Argentina collapse the U.S. loses

GlennH
GlennH

this guy gets it!