Trump’s trade war tantrum returns with new tariffs

This week the US president unleashed surprise tariffs on Brazilian and Argentine steel imports.


"Mount Tariff erupts again", says The Wall Street Journal. Just when you think that US president Trump's trade war antics have gone dormant, "there he goes again".

This week the US president unleashed surprise tariffs on Brazilian and Argentine steel imports. He also proposed up to 100% levies on $2.4bn of French imports of cheese, wine and luxury goods in retaliation for a digital services tax that Washington says disproportionately targets US firms. The announcement sent stockmarkets plunging. America's S&P 500 had its worst day in almost eight weeks on Monday, while the FTSE 100 slid to a six-week low on Tuesday.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

The steel levies are "ludicrous", says John Authers on Bloomberg. Donald Trump says that they are in retaliation for the weakness of the Brazilian and Argentine currencies, which is hurting US farm exports. But "it is absurd to complain that Argentina, a nation with inflation of more than 50%" that is emerging from a serious economic crisis, has a weak currency.

The most likely explanation is that the president simply doesn't know what he is talking about. But it is also just possible that people in his administration are looking to punish two key beneficiaries of China's hunt for new agricultural suppliers. It also increases the pressure on the US Federal Reserve to cut interest rates yet again.

Advertisement - Article continues below

With next year's election approaching, most traders thought Trump would shelve his trade antics, says The New York Times's DealBook. But his decision to spread tariff mayhem across two new continents shows that "no one is safe". Trump alternates between the "id and ego" of "Dow Man vs. Tariff Man", Chris Krueger of Cowen Washington Research Group tells Tory Newmyer in The Washington Post. The upshot? Don't bet on "Christmas calm" in the markets, says Newmyer.




How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019

Why Wall Street has got the US economy wrong again

The hiring slowdown does not signal recession for the US economy. Growth is just moving down a gear, says Brian Pellegrini.
25 Oct 2019

Brace yourself – the global economy might be healthier than it looks

Investors have been worried about a global recession since the start of the year. But the latest indicators suggest things might not be so bad. John S…
2 Apr 2019

The US economic downturn: it’s only a matter of time

With the US economy facing headwinds from trade wars to slowing global growth, talk of a recession is picking up.
22 Feb 2019

Most Popular

UK Economy

Britain has a new chancellor – get ready for a major spending splurge

The departure of Sajid Javid as chancellor and the appointment of Rishi Sunak marks a change in the style of our politics. John Stepek explains what's…
14 Feb 2020

Money Minute Friday 14 February: The latest from RBS, Britain's state-owned bank

Today's Money Minute previews results from RBS – Britain’s state-owned bank – and from pharma giant AstraZeneca.
14 Feb 2020
Silver and other precious metals

You should all own some silver. Just don’t expect it to make you rich

Silver is cool, beautiful and immensely useful. But for investors it's the most frustrating of metals. Dominic Frisby explains why you should own some…
12 Feb 2020

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019