MNI POLICY: Trump Targets China And Farmers With Latam Tariffs

By Brooke Migdon

     WASHINGTON (MNI) - Donald Trump's imposing of tariffs on Brazil and

Argentina is really an extension of his bigger fight with China and a message to

factory and farm workers he needs in next year's presidential election, trade

experts said.

     Trump announced tariffs on steel and aluminum imports Monday and said he

was  cracking down on currency manipulation and practices harming American

farmers, after exempting the two nations last year from a national security

review. 

With Brazil and Argentina already in economic turmoil, the political gains for

Trump appear to outweigh the trade rationale, experts from the nonpartisan

Atlantic Council said on a conference call Tuesday. 

     "It's not about steel or aluminum, it's not about currency manipulation in

Argentina or Brazil," former Argentina international trade undersecretary Shunko

Rojas said on the call. "It's a message for the farmers; it's a message from

President Trump saying 'I'm fighting for you against China' and definitely has

to be read as part of the presidential campaign."

     Trump on Tuesday roiled financial markets by returning to angry comments

about China, saying they had manipulated the global economy for years and the

U.S. could never sign an "even" deal with them now. He also said

telecommunications giant Huawei presents a "tremendous security problem" for the

U.S., and he can wait out Chinese leaders who want a deal "very badly." That was

a turn from his officials in recent weeks touting a "phase one" trade deal.

     China is already responding, and in ways that blunt any other gains by U.S.

farmers and factory workers. State media signaled Monday the government could

impose sanctions on American companies in response to U.S. bills targeting

Chinese entities involved in alleged human rights abuses in Hong Kong and

China's Xinjiang territory.

     While U.S.-China relations fray, China and Brazil ties have strengthened in

recent months. Brazilian President Jair Bolsonaro and China's Xi Jinping

exchanged positive sentiments at the annual BRICS summit in Brasilia last month

and Huawei is likely to win a bid next year to build Brazil's fifth generation

mobile network. 

     Over the past year, China has relied more heavily on other countries, among

them Brazil and Argentina, for agricultural imports like livestock and soybeans.

     "If it all ended tomorrow and all the tariffs went away, it's going to take

quite a while to restore our trade relations with China," said Dale Moore,

executive vice president of the American Farm Bureau Federation. "Especially

because while this has been going on, China has been reaching out to other

countries."

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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