Argentina eyes export gains from U.S. tariffs on Brazil but fears market oversupply

Representatives from Argentina’s industrial and business chambers reacted to the United States’ decision to impose 50% tariffs on Brazilian products with a mix of interest and concern—seeing both potential opportunities to increase exports to the U.S. and risks of increased competition from Brazilian goods in other markets, including Argentina itself.

“This could be an opportunity for Argentina if we manage to replace the products that Brazil supplies to the U.S. market,” Salvador Femenía, spokesperson for CAME (Argentine Confederation of Medium-Sized Enterprises), told CNN.

However, he noted that the situation could pose a problem for Argentine businesses if, due to geographic proximity and the country’s more open trade stance under President Javier Milei, Brazil begins diverting some of the products previously destined for the U.S. to Argentina.

“This is a concern we have. We are in a period of market liberalization, with many products from around the world entering Argentina. A lot of what we produce here is also made in Brazil,” he explained.

In practice, the confederation fears that more Brazilian goods could enter the Argentine market, affecting the country’s local production.

Another factor Femenía highlighted is the recent appreciation of the Argentine peso, which could make Brazilian products more competitive than Argentine ones in the local market.

Beef exports

Beef exporters are also closely watching U.S.-Brazil trade developments. According to CICCRA (Argentine Chamber of the Meat Industry and Trade), a reduced Brazilian presence—whose beef is cheaper than Argentina’s—could provide an opportunity to improve the prices fetched for Argentine meat in the U.S.

Currently, the U.S. is the third-largest destination for Argentine beef exports, accounting for just 5.6% of total shipments.

“If Brazil exits the U.S. market or significantly reduces its exports or raises costs, we have an opportunity to improve sales prices,” said CICCRA President Miguel Schiariti.

He added that this situation could open the door for increased sales to the U.S., but would require expanding Argentina’s cattle herd, which had been significantly reduced during Cristina Kirchner’s administration due to export restrictions and taxes on specific cuts of beef.

On the other hand, in exports to China—Argentina’s primary beef customer—the U.S.-Brazil tension could hurt Argentina. The greater presence of cheaper Brazilian meat would likely affect sales to the Asian giant, which currently accounts for 62.9% of Argentina’s beef exports.

“I can’t predict the future, but businesspeople I’ve spoken to believe that if Brazil redirects its beef exports from the U.S. to China, it could complicate things for us, because Brazilian prices are lower than what we’re currently charging,” he said.

Sector-by-sector assessment

Román Guajardo, president of the Industrial Union of the Rosario Region—one of Argentina’s major industrial hubs—said different sectors are still assessing the possible impacts of the executive order signed by Trump on Wednesday (30 July).

“In our region, which is one of the most industrialized in the country, some business leaders see this as an opportunity, while others view it as a threat,” he said.

On one hand, Guajardo explained, the concern stems from Brazil’s production surplus—lower-cost goods and larger volumes—that could be redirected from the U.S. to other markets, including Argentina, potentially outcompeting local producers with more attractive prices for consumers.

“This surplus has to go somewhere. So sectors with similar products to those Brazil exports are worried about the 50% tariff imposed by the U.S.,” he said.

However, some sectors view this as an opportunity for Argentina to sell products to the U.S. market that previously couldn’t compete with Brazil’s due to cost and scale.

Guajardo stressed that the dispute between the U.S. and Brazil is still in its early stages, and there is no certainty about the full scope of the measure ahead of its implementation on August 6.

“We are monitoring the situation and working with our members to evaluate case by case and understand the potential impacts,” he concluded.

Beyond the current moment

For Fabián Castillo, president of FECOBA (Federation of Commerce and Industry of Buenos Aires), the moment may be an opportunity for Argentina to expand its presence in the U.S. market with manufactured goods such as textiles, shoes, and furniture—products with higher added value.

“Argentina doesn’t yet have enough production capacity to supply a large consumer market like the U.S. This situation with Brazil could open our eyes to the need for more credit incentives for small and medium-sized enterprises, to acquire more modern equipment and increase our ability to meet this demand,” he explained.

Source: CNN

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