Buenos Aires Times

economy TRUMP'S PROTECTIONISM HITS ARGENTINE FIRMS

Braun details plan to win exemption over US steel, aluminium tariffs

Commerce Secretary Miguel Braun admits situation for Argentina is "complicated," but says government will "produce the best arguments to defend our companies and the interests of our workers."

Tuesday 13 March, 2018
Argentina's Ambassador the United States Fernando Oris de Roa and Commerce Secretary Miguel Braun.
Argentina's Ambassador the United States Fernando Oris de Roa and Commerce Secretary Miguel Braun. Foto:Santiago del Carril

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Still reeling from the President Donald Trump’s move last week to slap tariffs on steel and aluminium imports to the United States, President Mauricio Macri’s government is preparing to lay out Argentina’s case for an exemption from duties – though officials concede the situation is “complicated,” with just two weeks to go before a final decision will be made.

Miguel Braun, the high-ranking commerce secretary sent by Macri to oversee efforts in Washington, explained the severity of the Trump administration’s move to introduce duties on foreign imports of steel and aluminium. 
The move could affect as much as seven percent of Argentina’s total exports, Braun said.

“The situation is complicated because the US hasn’t yet defined how this process will be carried out,” said Braun at an evening press conference at the Argentine Embassy in Washington DC, at which the Times was present. 

“But we’ve come here to have meetings with the USTR (United States Trade Representative), the White House, and [the] Commerce Department to understand how this process will work and to produce the best arguments to defend our companies and the interests of our workers,” the Commerce Secretary explained, speaking alongside Argentina’s newly appointed Ambassador to the United States, Fernando Oris de Roa.

Although Braun recognised the difficulties Argentina faced in getting the US to alter its position, the commerce secretary said he had arranged a series of high-ranking meetings with officials from the top level at the US government, with the aim of advocating for Argentine steel and Aluminum business interests.

The key, he told those gathered, was to understand the process fully in order to maximise the chances of Argentina and its firms winning an exemption.

Swift reaction

The government’s reaction to Trump’s decision has been swift. In the immediate aftermath, the Foreign Ministry said it would “engage in dialogue with corresponding authorities in the United States to secure an exception from those tariffs so Argentina can export both products.”

On Friday, President Macri spoke with President Trump on the phone, in order to argue Argentina’s case and to express concern over the potential adverse effect these measures would have on the country’s industry, requesting a potential exemption from duties. Trump promised Macri he would evaluation the decision. So far, Mexico and Canada have been exempted from tariffs, as well Australia, while other US allies are also lobbying for the same privileges.

At a press conference during which he unveiled the decree authorising the duties, Trump cited national security interests as among his reasons for putting the protectionists measures in place. Argentina is preparing to counter that argument.

“Our fundamental argument is that Argentina aluminum and steel production doesn’t represent a threat to US national security interests,” said Braun.

Ambassador Oris de Roa highlighted how existing close cooperation between Argentine and US security organisations would help them in this regard. 

“The commitment that Argentina has with the Southern Command, will be one of the important contributions to this argument,” he said. 

Firms

The two Argentine companies that will be most affected by Trump’s tariffs are the Aluar aluminum smelter and the Techint steel-producing firm. 

“This will primarily affect our aluminum industry, as a greater percentage of that production is exported to the US,” Braun said.

Aluminum represented an estimated 7.2 percent of Argentine exports to the United States in 2015 at a value of US$320 million, according to the MIT Observatory of Economic Complexity. According to the Abeceb consultancy firm’s recent figures, Argentina exported US$493 million in aluminum to the US last year. Techint, however, has invested US$1.8 billion dollars in building a seamless steel pipe production plant in Texas, which was only inaugurated in Texas. There has been speculation that this may alter the conversation.

Over a year into the Trump administration, however, Argentina's trade deficit with the US has widened considerably and this latest move means the situation may still get worse. Last year, the US, hitherto the destination of 90 percent of Argentina’s biodiesel exports, imposed countervailing duties of up to 64.17 percent and averaging 57 percent on the fuel, all but halting all US-bound shipments dead in their tracks. 

Despite the friendly relationship between Macri and Trump, Washington has yet to offer any major trade concessions in Argentina’s favour.

“While we will discuss other trade issues, the truth is our urgent priority is this one because this is a decision that will be made in the next two weeks,” said Braun.

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