Three weeks after he slammed Brazil and Argentina for actions “not good for our farmers,” President Trump reversed his decision to impose high tariffs on steel and aluminum imported from the South American nations, said Brazilian President Jair Bolsonaro on social media over the weekend. “The relationship between the United States and Brazil has never been Stronger!” tweeted Trump on the same day.
Separately, Trump said the “phase one” agreement to de-escalate the Sino-U.S. trade war would be signed shortly. He did not specify a date.
Brazil and Argentina are U.S. rivals on the world agricultural market. Brazil is the world’s largest soybean exporter and Argentina is global leader in soybean meal exports. China ramped up purchases of Brazilian soybeans when retaliatory tariffs made U.S. soybeans too expensive. In recent months, China, which prefers to import soybeans for crushing, opened the way to soymeal from Argentina.
Bolsonaro, who has been described as the Trump of South America, said on Facebook that he spoke to Trump on Friday and “he decided not to make good on his plan to impose tariffs on our steel/aluminum,” according to a translation by the New York Times. “Our commercial relations and friendship are getting stronger and stronger.”
On Twitter, Trump said, “Just had a great call with the President of Brazil, @JairBolsonaro. We discussed many subjects including Trade. The relationship between the United States and Brazil has never been Stronger!”
The cordial remarks were a dramatic contrast to Trump’s Dec. 2 announcement “Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” tweeted Trump. The tariffs of 25 percent on steel and 10 percent on aluminum would replace import quotas on the metals.
But White House economic adviser Larry Kudlow said on Dec. 10 that the administration might not go forward with the tariffs. He spoke at a Wall Street Journal forum.
There was no immediate word if Trump also would discard the threatened tariffs on Argentina, said the Times.
Trump and Chinese President Xi Jinping said separately over the weekend that they hoped to sign soon the “phase one” agreement, which would call for large Chinese purchases of U.S. farm exports and for the Trump administration to forgo a new round of tariffs. There is a debate among analysts whether the U.S. goal of up to $50 billion a year in farm sales to China is attainable, considering exports are forecast at $11 billion this year. Before the trade war, they averaged $21 billion annually.
“Had a very good talk with President Xi of China concerning our giant Trade Deal. China has already started large scale purchases of agricultural product & more. Formal signing being arranged. Also talked about North Korea, where we are working with China, & Hong Kong (progress!),” said Trump on Twitter.
Xi told a Chinese news agency that the “first-phase economic and trade agreement reached between the U.S. and China is a good thing for the U.S., China, and the entire world,” reported CNBC. The Xinhua agency also quoted Xi as saying, “Both the U.S. and Chinese markets and the world have responded very positively to this. The U.S. is willing to maintain close communication with China and strive to sign and implement it as soon as possible.””
Chinese purchased 126,000 tonnes of U.S. soybeans worth nearly $43 million for delivery during the marketing year that opened on Sept. 1, said the USDA at the end of last week. It was the first major sale to China since 585,000 tonnes of soybeans worth $199 million on Dec. 11. This year’s soybean crop totaled 3.55 billion bushels, or 96.6 million tonnes.