Pablo Parola, secretary of foreign trade of the Association of Industrial Leaders of the Province of Buenos Aires (ADIBA) and advisor to Argentine and Brazilian companies, offers his analysis of the US tariffs on Argentinian and Brazilian steel and aluminium.
Possible Causes: US Elections and Relations with China
"Taking into account last year's agreement, which established a quota of 180,000 tons of duty-free imports to the US, the governments of Argentina and Brazil expressed surprise... as no one expected this," Parola said.
Parola added that, considering the tweet [of Donald Trump], one can conclude that the reasons for such a decision may include the upcoming US presidential election, China's relations with Mercosur and China's relations with Brazil:
"A joint response to this measure or threat is needed, as it puts two of Mercosur’s main aluminium and steel producers at risk. Therefore, this could unite us, despite ideological differences," he added.
Bet on Multilateralism as Way Out
Pablo Parola stressed that the statement of Argentina's Steel Industry Chamber, which expressed concern about the issue, was very vivid:
"Argentina has already managed to export to the US steel and aluminium worth $700 million. It cannot be ruled out that this could be a mechanism for negotiations on Argentina's debt to the International Monetary Fund," the expert explained.
The expert said that it would be right to bet on multilateralism to find concrete solutions, albeit Argentina and Brazil coming together would be based "more out of fear than out of love."
