White House opens new fronts in trade war, targeting Brazil, Argentina, and France
WASHINGTON - President Donald Trump revved up his global trade war on two fronts Monday, announcing tariffs on industrial metals from Brazil and Argentina while eyeing tariffs of up to 100 percent on dozens of popular French products.
The administration said the moves were necessary because U.S. trading partners were acting unfairly to disadvantage both the country's traditional economic pillars as well as its best hopes for future prosperity.
In a pre-dawn tweet, Trump said he was ordering new tariffs on steel and aluminum from Brazil and Argentina to counter what he called a "massive devaluation of their currencies" at the expense of American farmers. The unexpected announcement upends the Latin American countries' 2018 agreement with Trump to accept quotas on their shipments to the U.S. in place of the import taxes.
Hours later, Robert Lighthizer, the president's chief trade negotiator, released the results of a five-month investigation that concluded a French digital services tax discriminated against American Internet companies and should be met with tariffs of up to 100-percent on $2.4 billion in products such as cheese, yogurt, sparkling wine and makeup. The proposal, which awaits a presidential decision, threatens to intensify simmering trans-Atlantic trade friction, coming with Trump already accusing European car makers of enjoying government protection from American competition.
The French tax "discriminates against U.S. companies, is inconsistent with prevailing principles of international tax policy, and is unusually burdensome for affected U.S. companies," Lighthizer said in a statement.
Monday's protectionist flurry came as the president's "America First" trade policy remains bogged down at the negotiating table and on Capitol Hill less than a year before the 2020 election.
Even as the president flew to London for a North Atlantic Treaty Organization summit, all the essentials of Trumpian policymaking - bold action, debatable economics and sparse details - were on display back in Washington.
Fallout from the president's renewed embrace of tariffs could cloud prospects for future or ongoing talks with countries in Asia and Europe.
"It ought to make a whole lot of people nervous," said William Reinsch of the Center for Strategic and International Studies. "It kinda makes people wonder what's the point of negotiating if this is going to happen."
The administration's action against France is designed to create leverage for just such a negotiation. At issue is a 3 percent tax France introduced last year, which the administration says would unfairly target the American stars of the digital economy.
French lawmakers call the levy "Les GAFA" - an acronym for Google, Amazon, Facebook and Apple, companies that French officials accuse of paying insufficient taxes on revenues earned in France. (Amazon founder Jeff Bezos owns the Washington Post.)
Administration officials worry the French tax could set a precedent for other countries. Lighthizer said he may open investigations into similar taxes in Austria, Italy and Turkey.
Industry groups welcomed the recommendation with some, such as the Information Industry Technology Council, calling for both countries to work out a "lasting tax policy resolution" at the Organization for Economic Co-operation and Development.
"Today USTR is defending the internet, which is a great American export," said a statement from the Internet Association, an industry group.
Apart from the specifics of Monday's order, Trump's tweets amounted to a robust defense of his unconstrained use of import taxes.
"U.S. Markets are up as much as 21% since the announcement of Tariffs on 3/1/2018," Trump wrote in an apparent reference to the technology-heavy NASDAQ index. "And the U.S. is taking in massive amounts of money (and giving some to our farmers, who have been targeted by China)!"