Amid the trade war between the United States and China, the United States is increasing tariffs on multiple countries namely, Brazil, Argentina, and France. Levying tariffs on countries has served the purpose of protecting domestic industries and adding a source of income for the country; however, Trump administration has set distinguished grounds to impose tariffs on other countries.
Trump on Brazil and Argentina
In March 2018, Trump exempted Argentina, Brazil, and other countries from punitive metal tariffs stating that US trade officials would like to negotiate the trade terms. However, in May, he slid down a “take it or leave it” deal for Brazil that stated the impositions of 25% tariffs on steel and 10% tariffs on aluminum on national security grounds; however, he granted some exceptions.
Fast forward today, Trump said that he will levy tariffs on the imports of steel and aluminum justifying the reason in the form of a tweet. Trump tweeted, “Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers.” He added, “will restore the tariffs on all steel and aluminum that is shipped into the U.S.”
Brazil is the biggest exporter of steel and aluminum for the United States. In 2018, steel accounted for 3.8% of total good exports.
In response to Trump’s tariffs, Jair Bolsonaro, the President of Brazil, said, “Aluminum?” “I was in Washington last week, and I talked to a lot of people, and there was no sign whatsoever that there would be any kind of change,” he added.
It’s clear that Argentina and Brazil’s sluggish economy and weakening currency have prompted Trump to reverse the agreements.
Trump on France
On Monday, the United States trade officials proposed that they would levy 100% tariffs on $2.4 billion of imports from France. The imports include sparkling champagne, handbags, cheese, beauty products, and porcelainware. The decision comes after evaluating France’s digital tax services which can harm the United States’ tech companies.
According to digital tax, the French Government will charge a 3% tax on revenue earned by the companies from the digital services in the country. Countries such as Spain, Italy, and the United States are planning to carpet similar measures in their country.
“The USTR is focused on countering the growing protectionism of EU member states, which unfairly targets U.S. companies,” said Robert Lighthizer, the United States Trade Representative. The trade agency also stated that it will collect public comments on the proposed list of French goods till January.
The French digital taxes only targets the companies that have revenue of more than 25 million Euros ($27.86 million) and 750 million Euros ($830 million) worldwide.