Trade Cases

Trump Walks Back Threat of Steel Tariffs on Brazil

December 22, 2019

President Trump is walking back his decision to impose tariffs on steel and aluminum imports from Brazil. After accusing Brazil and Argentina earlier this month of currency manipulation that is harming U.S. farmers, and threatening immediate tariffs in retaliation, Trump now says he will not follow through on his threat.

Brazilian President Jair Bolsonaro said Trump assured him in a phone call on Friday that Brazil’s aluminum and steel will not be overtaxed. Bolsonaro said the 15-minute call was cordial and respectful.

In a live Facebook announcement after the call, Bolsonaro said, “I was pleased to receive a call from President Trump, a 15-minute conversation. I understood what he wanted and intended to do and gave my arguments to him. He became convinced of my arguments and decided to tell us all that our steel and aluminum will not be overcharged. That way our policy remains the best possible.”

Trump confirmed on Twitter that he had a “great call” with the Brazilian president and discussed “many subjects including trade.”

The surprise announcement by Trump on Dec. 2 shook financial markets causing the Dow Jones to plummet 326 points as investors worried that a new trade war was about to begin. Brazil and Argentina were exempted from Section 232 tariffs after a quota deal was made with the countries in May 2018.

No official order was ever issued following Trump’s December threat and it is unclear whether the steel and aluminum tariffs will potentially be imposed on Argentina.