Trump to restore tariffs on Brazil, Argentina

US President Donald Trump. (Reuters)
Updated 02 December 2019

Trump to restore tariffs on Brazil, Argentina

  • Emerging market stocks and the highly sensitive Mexican peso slid to session lows following President Donald Trump’s vow

WASHINGTON: US President Donald Trump on Monday said he would immediately restore tariffs on US steel and aluminum imports from Brazil and Argentina, prompting at least one counterpart to vow talks with the Republican president.

Emerging market stocks and the highly sensitive Mexican peso slid to session lows following Trump’s vow, which came in an early morning post on Twitter that gave no other details on the planned trade action.

“Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the US from those countries,” Trump wrote.

Brazil’s President Jair Bolsonaro, an avowed Trump fan who has actively sought closer US ties, said he could speak directly with the American leader and that he would also discuss Trump’s declaration with Brazil’s economy minister.

Trump on Monday also urged the Federal Reserve to prevent countries from gaining an economic advantage by devaluing their currencies.

“The Federal Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar,” Trump tweeted. “Lower Rates & Loosen — Fed!”

Trump has repeatedly urged the US central bank to lower rates to below zero, arguing that negative rates in Europe and elsewhere give those countries a competitive advantage.

However, Fed policymakers have been reluctant to take the unorthodox policy steps tried by other global central banks. The US central bank’s policymaking committee holds its next meeting on Dec 10-11.


Lufthansa accepts tweaked demands by Brussels over state bailout

Updated 30 May 2020

Lufthansa accepts tweaked demands by Brussels over state bailout

  • Lufthansa and the rest of the airline sector have been hard hit by what is expected to be a protracted travel slump

BERLIN/FRANKFURT: Lufthansa’s management board has accepted a more favorable set of demands from the European Commission in exchange for approval of a $10 billion government bailout, the carrier said on Saturday, paving the way for its rescue.
The agreement comes after the airline’s supervisory board on Wednesday rejected an initial deal with Brussels including conditions that were significantly more painful.
Lufthansa and the rest of the airline sector have been hard hit by what is expected to be a protracted travel slump due to the coronavirus pandemic.
Under the latest agreement, Lufthansa said it will be obliged to transfer up to 24 takeoff and landing slots for up to four aircraft to one rival each at the Frankfurt and Munich airports.
This translates into three take-off and three landing rights per aircraft and day, it said, confirming what sources had earlier told Reuters.
“For one-and-a-half years, this option is only available to new competitors at the Frankfurt and Munich airports,” Lufthansa said, initially excluding budget carrier Ryanair. “If no new competitor makes use of this option, it will be extended to existing competitors at the respective airports.”
The previous deal had included forfeiting 72 slots used by 12 of 300 jets based at the Frankfurt and Munich airports, a source familiar with the matter said.
The slots, to be allocated in a bidding process, can be taken over only by a European peer that has not received any substantial state aid during the pandemic, Lufthansa said.
The Commission said once it has been officially notified by Germany on the aid package it will assess the issue as a matter of priority.
“(Lufthansa’s remedies will) enable a viable entry or expansion of activities by other airlines at these airports to the benefit of consumers and effective competition,” it said in a statement.
The airline’s supervisory board needs to approve the deal, Lufthansa said, adding it would convene an extraordinary general meeting to obtain shareholder approval for the bailout.
The largest German corporate rescue since the coronavirus crisis struck will see the government get a 20 percent stake in Lufthansa, which could rise to 25 percent plus one share in the event of a takeover attempt. A deal would also give the government two seats on Lufthansa’s supervisory board.
Rivals such as Franco-Dutch group Air France-KLM and US carriers American Airlines, United Airlines and Delta Air Lines are all seeking state aid due to the economic effects of the pandemic.
Germany, which has set up a $110 billion fund to take stakes in companies hit by the pandemic, said it plans to sell the Lufthansa stake by the end of 2023.
“The German government, Lufthansa and the European Commission have reached an important intermediate step in the aid negotiations,” the Economy Ministry said in a statement.
It said talks with the Commission over state aid would continue.