Former World Bank economist Ted Bauman offers this take on President Donald Trump’s vow restore tariffs on all steel and aluminum shipped to the U.S. from Brazil and Argentina. His thoughts:

**President Trump has clearly never taken — or didn’t pass — Economics 101. He gets a failing grade on three counts in his latest tariff actions against Brazil and Argentina.

**First, both countries allowed their exchange rates to float freely on global markets. Unlike China, for example, they don’t manipulate their currencies to make their exports cheaper. The recent decline in the relative value of their currencies is due to negative sentiment towards their economies and political leadership, leading investors to withdraw capital, pushing down the value of those currencies. The president is punishing them for something that they are not doing.

**Second, this is precisely how free markets and floating exchange rates are supposed to work. When an economy with a high proportion of exports experiences problems, its currency depreciates, making its exports more attractive, helping the country return to stability. Interfering with this mechanism by slapping tariffs on every country whose currency depreciates is a recipe for global trading chaos.

**Third, President Trump says the Fed should intervene to fix this problem. But his prescription is to cut U.S. interest rates even further. That makes yields on U.S. treasury bonds unattractive. That’s why this year foreigners have dramatically cut back their purchases of U.S. treasuries. That’s causing two problems that could blow up in the president’s face. One is that U.S. banks are having to step into by all the excess treasuries at auction because of the federal government’s historically unprecedented budget deficits. That’s causing chaos in the repo market, forcing the Federal Reserve to hand out free money to Wall Street banks so that they can on-lend it to other financial institutions in the overnight market. The second is that it’s beginning to threaten the U.S. capital account with the rest of the world, as capital inflows decline.

**It’s almost as if the White House wants to crash the global economy.

During his 25-year career in South Africa, Ted Bauman served a variety of executive roles in the nonprofit sector, primarily as a fund manager for low-cost housing projects. One effort he helped found, Slum Dwellers International, has gone on to help over 14 million people in 35 different countries. During the 2000s, Ted worked as a consultant, researching and writing extensively on finance, housing, and urban planning issues for clients as diverse as the United Nations, the World Bank, the South African government and European grant-making agencies. In 2008, he returned to the U.S. where he served as Director of International Housing Programs for Habitat for Humanity International. He left in 2013 to work full-time as a researcher and writer. Ted graduated from the University of Cape Town in South Africa with postgraduate degrees in Economics and History. This is his website.