Donald Trump is to slap tariffs on imports of steel and aluminium from Brazil and Argentina after accusing the countries of currency manipulation.
The US president said, “Brazil and Argentina have been presiding over a massive devaluation of their currencies. Which is not good for our farmers.”
Both Latin American countries have seen their currencies tumble over the past two years. The Brazilian real slumped to a record low against the US dollar last week, and is down nearly 10 per cent this year amid a series of interest rate cuts, rising political tensions and wider emerging market weakness.
The country’s finance minister appeared to welcome a drop in the currency last Monday: “I’m not worried about the high dollar,” Paulo Guedes said. “On the contrary, I think it is absolutely understandable.”
In Argentina, the peso has lost nearly 60 per cent of its value against the dollar in 2019, amid capital controls and market jitters over populist politics and the country’s debt burden.
Mr Trump also repeated his call for the Federal Reserve to weaken the dollar to boost the US economy.
“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 manufactures & farmers to fairly export their goods,” he said.
Returning to his regular push for lower interest rates, the president added: “Lower rates & loosen - Fed!” – Copyright The Financial Times Limited 2019
