Trump Backs Down From Threat to Place Tariffs on Brazilian Steel

That same day, Brazilian authorities started calling the White House, the Commerce Department and the Treasury Department, as well as some lawmakers, to argue that Brazil does not manipulate its exchange rate.

The Brazil Steel Institute said in a statement at the time that it was shocked by the announcement and warned that the decision would hurt the American steel industry, which needs semifinished products exported by Brazil to operate its mills.

It is unclear if Mr. Trump has also backed off his threat to impose metal tariffs on Argentina.

The United States had initially exempted Brazil and Argentina from the tariffs Mr. Trump placed on global steel and aluminum in March 2018, as the countries continued to negotiate over trade terms. In May 2018, the United States announced that it had reached an agreement with both countries that would cap their metal shipments at a specific volume each year.

Mr. Trump and his advisers have lamented the negative effects of a strong dollar, which makes American goods more expensive to purchase overseas. Administration officials have accused a wide range of governments of manipulating their currencies, including China and the European Union.

The Treasury Department, which issues an official determination on which countries are currency manipulators, has not placed that label on Brazil or Argentina and neither country is on its list of nations that warrant monitoring. The most recent report, which was due in October, has yet to be released. Administration officials have not clarified when it will be published or the reason for the delay.

Economists say that the value of the Brazilian and Argentine currencies have recently fallen, but that the countries are not intentionally devaluing them, despite what Mr. Trump said. Instead, the two governments have actually been selling foreign currency and buying their own money to try to prop up its value.

Still, the falling value of both currencies has made Brazilian and Argentine products cheaper to purchase abroad — especially in China, where the president had been waging a protracted trade war.

Article source: https://www.nytimes.com/2019/12/21/business/brazil-trump-tariffs-steel.html?emc=rss&partner=rss