Market Spooked After Trump Threatens To Restore Steel And Aluminum Tariffs On South American Countries

Not surprising whatsoever that President Trump is starting the new week on the wrong foot by threatening several South American countries with a return of steel and aluminum tariffs. 

Trump alleges that Brazil and Argentina have been conducting “massive devaluation of their currencies,” which are harming US farmers. 

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. The Federal….

— Donald J. Trump (@realDonaldTrump) December 2, 2019

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Trump then scapegoats Powell for this mess and demands “Lower Rates & Lossen – Fed!” 

…..Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen – Fed!

— Donald J. Trump (@realDonaldTrump) December 2, 2019

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China is signing trade deals with Brazil and Argentina for agriculture products. We’ve noted this on several occasions. Trump is troubled with these developments and is willing to deepen the trade war as China is buying agriculture products elsewhere. 

Nevertheless, overnight, AXIOS reported that the US-China trade deal was now “stalled because of the Hong Kong legislation.” Likely, a phase one deal might not be seen until next year. 

E-mini S&P500, Nasdaq, and Rusell 2000 futures are sliding on Trump’s tweets.