President Donald Trump expressed his intention to address a new trade front after significant improvement was made with Chinese trade relations, as well as forward progress achieved with the U.S.-Mexico-Canada Agreement (USMCA). While in London for the 70th-anniversary summit of the North Atlantic Treaty Organization (NATO), President Trump spoke to the potential of increasing tariffs on several products from Brazil, Argentina, and France.
The Trump administration is reportedly considering increasing tariffs on French items such as cheeses, sparkling wines, and other products to as much as 100 percent. The potential increase would be implemented as a response to a recent French tax on digital services, which U.S. officials believe to be a barrier to trade. Similar tariff action has also been considered in Austria, Italy, and Turkey where similar taxes on online economic activity have been enacted.
Another trade front is also being considered in Brazil and Argentina, with the potential for reestablishing tariffs on steel and aluminum. President Trump said in a Tweet that the two Latin American countries “have been presiding over a massive devaluation of their currencies. which is not good for our farmers.” There is some concern that the increase could exacerbate the issue, increasing the attractiveness of agricultural products from both countries. President Trump also noted that import taxes may also be levied on products coming from Germany and other NATO members who are not believed to be adequately participating in the alliance.
The prospect of opening new trade fronts was announced just prior to the latest development with the USMCA and the first phase of a trade agreement with China. After more than a two-year formal negotiation process, USMCA is moving towards final approval with a significant number of agricultural groups are urging U.S. officials to get the agreement ratified before the end of the year. Progress was also made recently with Chinese and U.S. officials working out an initial trade deal, with expectations for further negotiations moving forward.