FinGurú - U.S.-Argentina Trade: Its Present and Future by Lautaro López

Argentina and the United States: political affinity, economic reforms and the challenge of bilateral trade

The relationship between Argentina and the United States has gone through different cycles over time. From historical coincidences, such as having been colonies that fought for their independence, to tensions marked by geopolitical contexts, such as the Cold War, the bilateral link has always been marked by a mixture of pragmatism, ideology and mutual convenience.

Nowadays, with an Argentine government headed by Javier Milei and a marked admiration for U.S. conservative figures such as Donald Trump, the political harmony has facilitated a rapprochement between the two nations. This rapprochement is not limited to the symbolic. Structural economic reforms in Argentina, together with signs of support from U.S. officials, are shaping a scenario of greater cooperation, although still tied to regulatory, commercial and institutional challenges.

A new stage: ideology, trust and necessity

Javier Milei has publicly expressed his affinity with Donald Trump. In various international forums such as the CPAC (Conservative Political Action Conference) he stated that both represent a threat to "the party of the state", aligning himself with a discourse that questions state interventionism. This ideological coincidence has been read from Washington as an opportunity to strengthen ties with a partner that shares free market values and strategic alignment in the face of China's geopolitical advance in Latin America.

In this context, U.S. Treasury Secretary Scott Bessent visited Buenos Aires on April 15, 2025. His statement was categorical: he expressed full support for the structural reforms promoted by Milei, praised the new exchange rate regime and announced the opening of formal talks for a reciprocal trade agreement. However, he made it clear that the United States will not grant a direct credit. Instead, he insisted that Argentina must accumulate reserves and consolidate a solid macroeconomy to avoid new external dependencies, particularly with Beijing.

Macroeconomic Context: Reforms, Inflation and Positive Signals

In economic terms, the Argentine government achieved some important milestones in the first months of 2025. Monthly inflation fell to 1.5 percent in May, the lowest in more than five years. At the same time, the peso remained stable in the interbank market, within a floating band that did not come under significant pressure.

This scenario was favored by the agreement with the International Monetary Fund, which included a US$20 billion credit. To this was added additional financing of US$22 billion from the World Bank and the Inter-American Development Bank. These resources facilitated the transition to a new exchange rate system and made it possible to partially lift the exchange restrictions, enabling individuals to buy dollars, although companies still face restrictions.

The financial support was interpreted as a sign of confidence on the part of multilateral organizations and, in effect, helped strengthen the country's negotiating position vis-à-vis new economic players, such as the United States.

Bilateral trade: recent progress, potential sectors and historical obstacles

During 2024, the United States consolidated its position as the third largest foreign direct investor in Argentina, with a stock of close to US$ 30 billion. At the same time, trade exchange reached 12 billion dollars per year, with an unusual surplus of 148 million dollars for Argentina, the first in almost two decades. This result was the result of a combination of a 30 percent drop in imports and a 16 percent increase in exports.

Among the most dynamic sectors were hydrocarbons and chemical products, which accounted for 36 percent of total exports to the United States. Agro-industrial products such as meat, honey, lemons and wines, which together accounted for US$989 million, or 17 percent of the total, were also consolidated.

Despite these figures, bilateral trade still faces obstacles. Argentina imposes an average tariff of 6.2 percent on imports from the United States, while the other country applies 2.5 percent. This is in addition to specific tariffs inherited from the Trump administration, such as the 25 percent applied to Argentine aluminum and steel, which affects exports for approximately US$600 million annually.

Free trade? Political intent versus regulatory structure

One of the goals of the current Argentine government is to reach a free trade agreement with the United States. However, such an agreement faces several challenges, both internal and external. First, Mercosur's current rules prevent its member countries from negotiating trade agreements independently, so Argentina would have to disassociate itself from the bloc or force a structural reform that does not seem politically feasible today. Secondly, the U.S. Congress has not yet given any concrete signs of real interest in moving forward with a treaty of this nature with Argentina, at least in the short term.

Donald Trump's own rhetoric also introduces ambiguities. In public statements, the former president expressed that the United States maintains a deficit with Argentina and that it is not willing to make exceptions in terms of tariffs. This makes it clear that, although there is personal sympathy and some ideological coincidence between leaders, the road to a formal treaty is long, technical and depends on broader factors than political affinities.

The future of Trump/Milei trade

In terms of economic growth and domestic consumption, both the IMF and the OECD expect Argentina's Gross Domestic Product to grow between 5.2 % and 5.5 % in 2025, thanks to the recovery of consumption and the rebound in private investment. In addition, a Reuters poll revealed that economic activity grew 6.4 % year-on-year in March, marking its fifth consecutive month of expansion. If these trends continue, Argentina could consolidate a more stable macroeconomic environment within the next 12 months, which would strengthen its position vis-à-vis the White House to move forward with deeper trade agreements and attract U.S. investment in sectors such as energy, mining and technology.

On the other hand, the Argentine energy sector projects strong growth with the expectation of an $8 billion trade surplus by 2025, driven by increased extraction in Vaca Muerta and the arrival of investments from companies such as Vista Energy, Shell and Chevron. Simultaneously, the local business climate shows caution: a survey of 1,700 executives reveals that 49% foresee a "good or very good" relationship with the US, while the remaining 51% estimate a neutral or negative view. These numbers suggest that, although there is expectation in the private sector for the opportunities arising from the ideological and economic rapprochement, there are also uncertainties linked to changes in tariff policies and the real depth of the expected agreements.