U.S. President Donald Trump announced on Monday he would immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, saying in a pair of tweets that the two countries "have been presiding over a massive devaluation of their currencies, which is not good for our farmers." Brazil's President Jair Bolsonaro, an avowed Trump fan who has actively sought closer U.S. ties, said he wanted to speak directly with Trump and that he would also discuss the American president's Twitter declaration with Brazil's economy minister.
Meanwhile, a spokesperson for Argentina's Foreign Ministry said it would begin negotiations with the U.S. State Department following the Trump tweet.
The Brazilian economy has just begun to show signs of recovery after flirting with a recession earlier this year.
Argentina is in recession and could be heading towards a default on government debt.
Following Trump's tweet, emerging market stocks and currencies, including the Brazilian Real and Mexican peso fell.
But shares of U.S. steel companies were on the rise.
Trump also urged the Federal Reserve to prevent countries from gaining an economic advantage by devaluing their currencies, adding "Lower Rates & Loosen - Fed!" Trump has repeatedly pressed the U.S. central bank to lower rates to below zero, arguing that negative rates in Europe and elsewhere give those countries a competitive advantage.
Trump's biggest beef has been with China.
The long-running trade war has upended factory floors and dented business sentiment.
And another round of tariffs on Chinese-made goods is set to go into effect later this month.