The US President Donald Trump has been recently hitting the headlines, all for the wrong reasons. This time he is being talked about for stirring new turmoil into the global economy and financial markets. Just as the world started to believe that the trade war between the US and China, that has been affecting the entire global economy is about the end, one tweet from Trump took the entire world upside down. Besides, announcing an array of aggressive moves, he took to his Twitter handle and said that the agreement between the US and Beijing might not happen before the 2022 election, which left the entire scenario at the same place where it was.
He also announced to impose tariffs on imports of Steel and Aluminum from Argentina and Brazil. Steel and Aluminum were among the exempted items from the worldwide tariffs until 2018. The Brazilian president, Jair Bolsonaro, is left dumbstruck after Trump took such a drastic decision and he has no clue as to what made Trump take such a hasty decision.
President Trump, in his Tweet on Monday, accused Brazil and Argentina of manipulating the value of their currency thereby causing harm to the US farmers by taking advantage of their cheap currencies. To combat this, the US president has decided to impose tariffs on Steel and Aluminum to devalue their currencies. However, the Brazilian President assured that nothing of this sort ever happened and that their currencies have fallen against the US dollars because their economies are weak as compared to the US economies.
Argentina has been under a huge economic crisis since President Trump took such a decision. Rampant inflation, poverty, and indebtedness are crippling the whole economy of the country, whereas Brazil is experiencing grappling unemployment, which is sending the country into a phase of unrecoverable recession. Not only this, the US is ratcheting trade hostilities with France as well. Trump is now accusing France that its new digital tax system is causing harm to the US tech companies and therefore, it may impose import duties on some of the French products as well.
Statistics show if Trump continues to rule on this new threat against Brazil and Argentina, their currencies will fall even further because the aggressive tariffs will hurt the exports of Steel and Aluminum. This will make the lives of US farmers more complex. All these are creating a scenario full of confusion and distrust among the investors as well as businesses in the US. Investments have already been delayed and economic growth has been sapped as businesses are lying in a cloud of confusion as to what will be Trump’s next step or who will be his next target.