No Safety from “Tariff Man”: Trump Revives Tariffs on Metals

President Trump has revived tariffs on metals from Brazil and Argentina. The decision highlights risks to the U.S-China trade deal and shows that “no one is safe from the tariff man.”

Chris Kruger- Cowen analyst had a few more takeaways from the levies. Additionally, in his note to clients, he wrote that currency wars were “alive and well as Trump displayed ‘grievance policy-making 101’.”

The revived tariffs underscore issues arising at the World Trade Organization next week. Moreover, the appeals panel will cease to function beginning Dec. 11- rendering its dispute settlement system inoperative.

Brazil and Argentina’s actions, past tariffs threats on Mexican goods for immigrant issues, and Turkey for currency devaluation offer more examples of the deal default risk.

Krueger wrote in a note, “This is just one more arrow in the quiver for hawks in Beijing to try and shoot down a deal.”

According to Krueger, there was not even a pretense of national security with the tariffs. He said the action was ripe for retaliation. Moreover, he threatened to reshape currency relationships and rules in the foreign exchange markets.

Investors worried about Trump’s tariff wars

According to Adam Crisafulli from Vital Knowledge, the Brazil and Argentina tariffs reintroductions are relatively minor. But, investors worry about Trump’s understanding of global Forex markets and central bank policy that’s at best quite reductive.

“If Trump is about to embark on a campaign of tariffs aimed at countries accused of devaluing their currencies, there could be plenty more targets,” Crisafulli said.

He also noted that Trump was conscious of Nov 2020. He realizes the need to ensure a healthy economy for at least another 11 months.

It means  any trade initiatives “should stay minor.”