The White House has been emitting tariff threats in the direction of France, Brazil and Argentina.
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Good morning. David Meyer here in Berlin, filling in for Alan.
Facing intense political pressure back home, President Trump is going on the trade offensive again, on multiple fronts.
One story involves the threat of 100% tariffs on various French imports, from champagne to porcelain. This is to do with the French revenue tax on digital giants, most of which are of course American.
French President Emmanuel Macron thought he had an agreement with the U.S. about this, that would see the French tax vanish (with already-paid taxes reimbursed) once international agreement is reached on the digital services taxation issue. But no.
If the U.S. follows through on the threat early next year, the response will come from the wider European Union, as trade is (unlike tax) an EU-level rather than national issue—there’s also the fact that Spain, Italy and others are mulling similar digital taxes.
Add that to the threatened U.S. tariffs on European cars, and the likelihood of the U.S. imposing wide-ranging tariffs on European goods over the Airbus subsidies dispute, and there does seem to be an almighty confrontation brewing.
Meanwhile, Trump is also preparing to hit Brazil and Argentina with steel and aluminum tariffs, on the basis that their weakening currencies make their agricultural exports overly competitive with American food.
Neither Brazil nor Argentina is particularly happy about their depreciating currencies—their governments are scrambling to shore them up. But it appears the U.S., perhaps also irked by the two countries’ farm exports filling the space left by the drop in U.S. exports to China, sees the situation as a threat.
Politically speaking, this is particularly problematic for the far-right Brazilian President Jair Bolsonaro, who has made much of his affinity with Trump. But it could be a vote-winner for the American president, whose base largely resides in rural states.
It’s all a lot of action, considering that the administration does not yet have much to show for its existing trade offensives. More news below.
David Meyer
@superglaze
david.meyer@fortune.com
