In the trade dispute, US President Donald Trump has set new goals. Trump announced on Twitter to punish Argentine and Brazilian steel with punitive tariffs. The tariffs would be reintroduced "immediately", wrote the US President. He justified the step with the "massive" devaluation of the national currencies of the two South American countries. This is "not good for our farmers". The US is competing with the two countries for certain agricultural products, such as soya and corn.
..... Reserve should also act like 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. Lower Rates & Loosen - Fed!- Donald J. Trump (@realDonaldTrump) December 2, 2019
Trump also renewed his criticism of the US Federal Reserve. It should cut interest rates and ease its monetary policy, "so that countries - of which there are many - can no longer benefit from the strong dollar by further depreciating their currencies." In the past, Trump also accused the European Central Bank (ECB) of intentionally weakening the euro.
To blame Argentina and Brazil for a targeted devaluation of their currencies is at least questionable. Argentina has been in a serious economic crisis for two years. Since the beginning of 2018, the peso has lost more than two-thirds of its value. In October, a new president was elected. Argentina had taken action in the summer against the devaluation of its currency.
The Brazilian Real has also suffered for a long time from the country's economic problems. The Brazilian central bank had intervened only a few days ago directly on the foreign exchange market.