SAO PAULO — Brazilian President Jair Bolsonaro’s U.S.-focused foreign policy efforts suffered a severe setback on Monday when his American counterpart Donald Trump pledged to impose tariffs on steel and aluminum on the South American nation.
Trump initially leveled the threat by Twitter while accusing Brazil and neighboring Argentina, governed by U.S. allies Bolsonaro and Mauricio Macri, of manipulating their currencies and hurting American farmers.
Brazil’s vice president denied the accusation, but Bolsonaro, who openly admires Trump, was reticent; the far-right politician said he could call Trump “if needed.”
Argentina’s production and labor minister, Dante Sica, said Trump’s announcement caught policymakers by surprise.
Both South American nations were among a group of U.S. allies that Trump exempted from steel and aluminum tariffs in March 2018. The American president’s threat to reverse that decision and impose the metals tariffs on Argentina and Brazil is another example of his mercurial approach to trade policy.
He also called on America’s central bank to act to prevent other countries from devaluing their currencies.
“Brazil has really discounted. If you take a look at what’s happened with their currency, they’ve devalued their currency very substantially by 10 percent. Argentina also,” Trump said shortly before departing for a NATO conference in London. He did not provide specifics on the tariffs.
The stakes are high for Bolsonaro, who has made his relationship with Trump a cornerstone of his diplomacy and is called by both friends and foes “the Trump of the tropics.”
While feuding publicly with other Western leaders, including the presidents of Germany and France, Bolsonaro has made several concessions to Trump in the expectation of reaping benefits. He has exempted American tourists from visas to visit Brazil, allowed the U.S. to launch satellites from Brazil and made it easier for Brazilians to buy American wheat and ethanol.
In exchange, he received tepid U.S. support for Brazil’s bid to enter the Organization for Economic Cooperation and Development, while Argentina has received full endorsement for membership.
Brazil is grappling with stubborn double-digit unemployment, and its economy is headed toward its third straight year of roughly 1 percent growth, following two years of deep recession.