2025 – The changing US trade relations with Argentina and Brazil

When the Trump administration linked political and trade agendas into a policy platform, global trading relationships were changed overnight. And nowhere is that more evident than with the Latin American nations of Argentina and Brazil.

$20 billion dollars’ worth of questions. The trading relationship between the United States and Latin America and the Caribbean (LAC) has always been complicated. That’s understandable. Latin America is a very large [7.412 million miles/sq with over 669 million people with a $7.31 trillion GDP large] and complicated place.

The US relationship [both in trade and politics] with the region’s 33 nations has with successive US administrations been met with a fair amount of mistrust.

Still trade relations are about people. And the recent decision by President Trump to authorize a $20 billion exchange-rate stabilization agreement for Argentina is a backdrop to a shift in the US approach to relations with LAC nations.

On October 14, 2025, Argentine President Javier Milei visited the White House to meet with President Trump shortly after it was announced that a $20 billion bailout had been extended to Argentina. The agreement to bail out Argentina, triggered questions from both the President’s supporters and Democrats. The President’s supporters asking how $20 billion for Argentina put America First while the Democrats are asking how does the government have an extra $20 billion to spend on Argentina when it can’t find enough money to fund programs like the Affordable Care Act? A key issue in the ongoing US Government shutdown wrangle.

The President said that the bailout, in which the US would exchange US dollars for Argentine pesos to buoy the failing currency, was contingent on Milei’s party winning the upcoming legislative elections — which is far from a sure thing. And besides the agreed bailout, the US Treasury Secretary has said that the administration is working on securing another $20 billion for Argentina through private banks and sovereign wealth funds.

And if one can ignore the political motivations behind the bailout for both DC and Buenos Aires, there is still the simple question of will it work? Will $20 billion or even $40 billion not only stabilize the Argentine peso but alleviate the underlying causes for the repeated financial calamities that Argentina has endured over the last three decades. Over the years the IMF and World Bank have bailed out Argentina from various financial catastrophes and now with the US stepping into the role, will the results be any better?

The China Question

This isn’t Argentina’s first monetary crisis nor is it likely to be the last which begs the question of why bailout Argentina? Strategically, the administration views Melei as a key ally in the region. And with China’s growing involvement in Argentina, (and virtually all of Latin America) developing strong allies is a policy key for the administration. In Argentina’s case, the country has lithium, and rare earth reserves also squarely placing the country in the middle of the ongoing trade war between the US and China, as China has a near monopoly on rare-earth processing and recently tightened restrictions on rare-earth exports.

Argentina also adds another layer of complication to the geopolitical tension between the US and China, as the country has become one of the top suppliers of soybeans (along with neighboring Brazil) to China. And China has directly stated that it won’t buy US soybeans until the tariff issue is resolved. And in this tit-for-tat exchange, President Trump has stated that on November 1st a 100% tariff would be placed on all Chinese exports to the US, should no resolution be made at the upcoming meetings (which are at this writing tentatively agreed upon.) In the meantime, the US soybean exports (along with corn) are having difficulty finding new markets for their exports. US farmers would like to see the administration apply leverage — $20 billion worth — to cut Argentine soybean exports to China in an effort to pave the way for US export sales. A move that is unlikely to happen, as China has made its position clear on US soybean imports. And even if Argentina was to reduce their soybean sales to China, Brazil, the region’s largest producer, would likely pick up the slack. US ranchers are also upset with the President’s suggestion that the US should import more beef from Argentina to help reduce high beef prices in the US [see AJOT.com Oct 21, 2025, Trump plan to import Argentine beef angers US farmers]. Although Argentina’s imports to the US would likely be small versus demand and have a negligible impact on prices, given all the difficulties facing US farmers, the idea of bringing in foreign beef to lower prices is unpalatable.

Of course, if Milei’s La Libertad Avanza (LLA), (The Freedom Advances) party does lose then another US policy reset will likely be in order.

Brazil-US: Tariffs, Two Presidents and 2026

There is a saying nothing happens in a vacuum and that is very true in the case of US relations with Brazil and Argentina. Brazil, which has the largest economy in Latin America [Mexico by virtue of the USMCA being placed in North America] has been both a trading partner and competitor to the US. On August 6th President Trump imposed an additional 40% on the existing 10% tariff on Brazilian exports to the US. The executive order (EO) that spawned the hike asserted that the tariff was a response to Brazil’s treatment and prosecution stemming from election-related conspiracies (described in Brazil as a military coup) of former Brazilian President Jair Bolsonaro, who Trump considers an ally, during the 2022 election. Additionally, the USTR launched a 301investigation into Brazil engaging in unfair trade practices and treatment against US companies. In July the administration upped the ante when the US Treasury Department invoked the Global Magnitsky Act to impose sanctions and visa restrictions on Brazilian Supreme Court Justice Alexandre de Moraes, who oversaw Bolsonaro’s trial and other justices involved in the case. Through the process Brazilian President Lula and President Trump have regularly exchanged barbs but the relationship may be moving from near boiling-over to just simmering.

On October 6th, 2025, the two sparring presidents, Trump and Lula, shared a video call exchange which was described as a “very good telephone call” by President Trump. Lula reportedly viewed the meeting as a chance to turn down the heated rhetoric and move the relations between the two largest American democracies back on to a more civilized track. And from President Trump’s perspective the discussion (according to the Social Truth platform) “was mostly focused on the economy, and trade between our two countries.”

And there is a lot to talk about — starting with China.

To begin with the United States has traditionally run a trade surplus with Brazil, something the US doesn’t do with many major economic nations. Considering the main tenet of the Trump administration’s foreign trade agenda is reducing the trade imbalance by deploying tariffs, this makes Brazil’s 50% tariff rate significant policy outlier — a fact that Lula is well aware of and a key talking point with Trump.

The US goods exports to Brazil in 2024 were $49.1 billion up, 10.3% over 2023 while US goods imports from Brazil in 2024 totaled $42.3 billion up, 8.4% over 2023.

But beyond the positive trade numbers, the Trump administration is also aware that Brazil itself has historically maintained higher tariffs on US import duties than the US has on Brazil’s exports… until now. And another aggravating point for the administration is that while $49.1 billion in exports to Brazil is good for a surplus, Brazil imported an estimated $70 billion from China in 2024. And on the Brazilian export side the comparison is even more lopsided as the US imported 42.3 billion in 2024 while China imported an estimated $116.14 billion in Brazilian goods.

Overall, China’s share of Brazilian exports has risen from 2.6% in 2000 to 28.5% in 2024, having peaked at 33.5% in 2020. Over the same period the US share of Brazil’s exports has gone from 22.4% in 2000 to 12.1% in 2024, peaking in 2002 at 25.7% and never rising over 20% after 2004.

And it isn’t just trade. In 2024 China’s investment in Brazil hit $4.2 billion, making the Latin American country the third largest recipient of Chinese investment. However, for now the US still remains Brazil’s top investor at $8.5 billion but China’s influence is beginning to fill the review mirror.

Lula and Trump are expected to meet at the ASEAN summit on October 26-28, 2025, in Kula Lumpur, Malaysia. The Brazilian President has also offered to travel to the US and invited President Trump to the UN Climate Summit (November 6-21) in Belem, Brazil.

Both presidents have a lot to talk about, and each have important elections coming up in 2026 — a presidential election for Lula in October and the November midterms for President Trump in November — and the lead up to these elections might hold the key to how trade relations between the two nations are worked out in 2025.