With a possible phase 1 deal between the US and China, US President Trump has started targeting other countries. Yesterday, President Trump announced that the US will impose tariffs on steel and aluminium imported from Argentina and Brazil due to ‘massive devaluation of their currencies’. China has substituted away from US soybeans by buying from Brazil and Argentina (US farm states are important for Trump’s re-election chances).
A bigger concern perhaps is that the US has proposed tariffs on roughly USD2.4bn on imported goods from France as a retaliation for France’s decision to implement a digital tax (and is now considering something similar against Austria, Italy and Turkey), see USTR press release. The hearing process will begin on 7 January 2020 and the proposed list of products includes wine, cheese, handbags and makeup, see the preliminary list here. France has so far declined to comment but French president Macron and US President Trump are expected to meet during the NATO leader meeting, which begins today. The Internet Association, which represents tech companies, are calling for a global solution on how to tax tech companies. The conflict with France also increases the risk that the US eventually imposes tariffs on imported cars from Europe.
