Argentina and United States Sign Trade Agreement
Argentina and the United States signed a trade agreement on Thursday aimed at easing restrictions on goods and reducing tariffs between the two nations. The deal supports President Javier Milei's objective to liberalize Argentina's economy and the Trump administration's stated goal of lowering food prices for American consumers.
Agreement Details
The agreement, signed in Washington by Argentine Foreign Minister Pablo Quirno and U.S. Trade Representative Jamieson Greer, finalized a framework deal announced by the Trump administration last November.
Argentina's Concessions
Argentina will remove trade barriers on over 200 categories of U.S. goods, including chemicals, machinery, and medical devices. Additionally, imports of vehicles, live cattle, and dairy products will enter Argentina tariff-free under government quotas.
U.S. Concessions
The U.S. will eliminate reciprocal tariffs on 1,675 Argentine products, which Argentina's Foreign Ministry estimates could increase its government export revenue by over $1 billion. This list includes "unavailable natural resources" and ingredients for pharmaceutical goods, following Argentina's commitment to improve intellectual property protections. The U.S. will also review its 50% taxes on Argentine steel and aluminum imports, though outright elimination was not included.
Beef Imports
The U.S. will quadruple the current amount of Argentine beef imported at a lower tariff rate, increasing it to 100,000 tons annually.
Economic and Political Context
The agreement is seen as a reflection of President Milei's ideological alignment with U.S. President Donald Trump. Milei has made multiple visits to the U.S. since taking office and has adjusted Argentina's foreign policy to align with the U.S.
In the past year, Trump provided Argentina with a $20 billion credit line amid market volatility threatening Milei's economic reforms. This assistance reportedly helped Milei avoid a currency devaluation and contributed to his decisive victory in a midterm election.
Reactions and Criticisms
Argentine Foreign Minister Pablo Quirno described the agreement as a significant step for Argentina's alliance with the U.S. and for Milei's efforts to enhance the nation's international reputation. He stated that:
Argentina is signaling itself as a "reliable partner, open to trade and committed to clear rules, predictability and strategic cooperation."
However, aspects of the deal have drawn criticism:
- Argentine Industries: Domestic producers in Argentina have expressed concerns about competing with American manufacturers, especially following an influx of Chinese products due to Milei's economic liberalization.
- U.S. Agricultural Sector: The increased import of Argentine beef has reignited criticism from U.S. cattle ranchers and Republican lawmakers who previously voiced opposition to similar proposals aimed at lowering prices.
- Past Financial Aid: Previous financial support from the U.S. to Argentina, including the $20 billion credit line and purchases of bonds, faced backlash from both Trump's base and Democratic lawmakers, who questioned the expenditure on a country not traditionally a strong trade partner. Senator Elizabeth Warren reportedly appealed to Treasury Secretary Scott Bessent to end the $20 billion bailout.