Bolsonaro’s rude awakening came from Trump’s unexpected tweets declaring that he was reimposing tariffs on steel and aluminum imported from Brazil and Argentina. By all accounts, the Latin American countries had not been informed about this beforehand, nor had they been given any indication such a move might be forthcoming. Taken by surprise outside the presidential residence, Bolsonaro said he would “call Trump,” adding that he has “an open channel with him.”
Bolsonaro will likely find himself in the same boat as others who thought their relationship with the president means more than it does. The list of former friends who are now public enemies is long and growing. Trump even dumps on staunch loyalists such as White House adviser Kellyanne Conway, whose husband, George Conway, virulently and publicly opposes her boss. Trump was asked about George Conway’s behavior on “Fox & Friends” last week and casually said “she must have done some bad things to him because that guy is crazy.”
Jair, if he can throw Kellyanne Conway under the bus, he has no problem putting tariffs on your companies.
That’s no way to treat a lady — or an ally. Bolsonaro’s Brazil has turned from a country often at odds with the United States to one of its firmest allies in the Southern Hemisphere. It is the eighth-largest economy in the world and is struggling to grow again after a serious recession from 2014-2016. It is in the U.S. interest to help Brazil grow and provide a counterweight to the populist and undemocratic socialism that always simmers just below the surface in Latin America.
Instead, Trump is treating Bolsonaro like he treats his senior staff with whom he has tired: Bad news comes via the morning tweet.
Trump again displays some of his signature qualities in this matter — in particular, his impulsiveness. Even his own staff doesn’t know what’s coming next. Markets and other nations that depend on the United States need some measure of predictability to plan accordingly. Rapid changes of policy unsettle these relationships and make it impossible to plan. Alternating between hugging and bullying his associates and business partners may have worked for Trump in his private and business lives, but they wreak havoc for the country in his public life.
Trump is also far too obsessed with the farm sector. In his tweet, he said he was reimposing tariffs because Brazil and Argentina were weakening their currencies, “which is not good for our farmers.” But what about the U.S. firms that import steel or aluminum from these countries, in part because they had been exempted from prior tariffs while steel and aluminum from China was not? They will now have a significant price hike in a key input material and might have to again switch their source countries, something that takes time and costs money. Don’t they deserve consideration, too?
This impulsiveness undercuts one of the main rationales for Trump’s tariffs, which is that they will encourage companies to reinvest in the United States for heavy manufacturing. Companies will do this only if they know they can obtain a solid return on their investments. If tariffs are the reason the United States becomes economically competitive again, then businesses need to know the tariffs will stay high for the foreseeable future. Putting tariffs on and taking them off at the drop of a hat won’t encourage U.S. manufacturing investment, and may do the opposite as companies decide that other nations offer a more stable environment — even with the threat of future tariffs.
Trump is flying to London today to meet with our 28 NATO allies. After this debacle, many world leaders are surely dreading his arrival, wondering whether a similar fate awaits them after he lands.