Economic rebound revives Brazilian exports to Argentina

The slight economic improvement achieved by President Javier Milei’s government, along with the — to some extent artificial — appreciation of the peso, has helped revive Brazilian exports to Argentina. This trend offers relief to Brazil’s external sector, which has been hit by falling commodity prices and uncertainty in trade relations with the United States.

Brazilian exports to the world’s largest economy had been growing in recent years — though still far behind China — but are now expected to take a hit with the increasingly likely implementation of a 50% tariff on Brazilian goods announced by President Donald Trump. Although Brazil’s export profile to both the U.S. and Argentina includes fewer commodities and more high-value-added goods, economists are divided on whether Argentina could absorb part of the production typically destined for the U.S. market.

From January to June, exports to Argentina totaled US$9.12 billion, a 55.4% increase over the same period in 2024, according to data compiled by the Foreign Trade Secretariat (Secex) of the Ministry of Development, Industry, Trade, and Services (MDIC). This secures Argentina’s position as Brazil’s third-largest export destination, a spot that had been threatened in 2024 by the Netherlands.

See below the Brazilian exports to Argentina from 2022 to 2025. The chart was created using DataLiner data:

Brazilian Exports to Argentina | 2022 – 2025 | TEU

Source: DataLiner (Click here to request a demo)

According to Gabriela Faria, an economist at Tendências Consultoria, the recovery in Argentine demand has been noticeable since late last year. “The export profile remains similar: passenger vehicles, vehicle parts and accessories, industrial goods, electrical machinery, and other manufacturing-related items like plastics,” she explained.

In value terms, the category of motor vehicles, tractors, cycles, and other land vehicles, including parts and accessories, led the way with a 121.8% increase in the first half of the year compared to the same period in 2024, according to Secex data.

The National Association of Automotive Vehicle Manufacturers (Anfavea) reported that vehicle exports to Argentina rose 59.8% in the first six months of the year to 264,000 units. Argentina’s share of total exports nearly doubled from 34% to 60% — the highest level since 2018 (68%).

“The Argentine peso appreciated significantly during this period, which hurt the competitiveness of locally produced goods. Since the automakers operating in both countries are the same, there’s a strategic preference for exporting from Brazil, even to Argentina itself,” said Lia Valls, coordinator of the Foreign Trade Indicator (Icomex) at FGV Ibre.

Since Javier Milei took office in December 2023, the peso has appreciated 54.8% in nominal terms. Meanwhile, his economic shock policies are beginning to show results. After contracting 1.7% in 2024, Argentina’s GDP grew 0.8% in the first quarter compared to the previous quarter and 5.8% year-over-year.

Analysts say Argentina’s rebound in imports was driven mainly by a surge in household consumption and investment, which also contributed to a 42.8% increase in overall imports during the period.

Another factor favoring Brazilian exporters has been the removal of non-tariff barriers, such as import licenses and payment restrictions, noted former Foreign Trade Secretary and BMJ consulting partner Welber Barral.

“It used to be extremely complicated. I once had a client tell me they had been waiting 12 months for Argentina’s central bank to authorize a payment,” he recalled.

That situation has changed, he added. Complaints have dwindled, and the economic recovery has renewed interest from Brazilian companies looking to invest in the neighboring country. Barral cited the recent approval of the Large Investment Incentive Regime (RIGI), which aims to provide security for foreign investors along with tax, customs, and exchange benefits, as a driver of increased interest — especially among agriculture and mining firms.

Another sector benefiting from this recovery has been the machinery industry. According to the industry association Abimaq, sales to Argentina increased by 55.3% in the first half of the year, totaling US$760.2 million.

“All sectors saw growth in Argentine demand, except for machinery used in oil and renewable energy,” noted Patricia Gomes, Abimaq’s executive director for foreign markets.

Argentina is the second-largest buyer of Abimaq’s represented sector, accounting for 13.4% of exports, behind only the U.S. Gomes considers the signs positive, but urges caution when forecasting further growth.

“Today’s environment is different. There’s more competition, especially from Asian countries. And the global scenario doesn’t help, since this sector is very sensitive to economic confidence,” she said.

For Livio Ribeiro, partner at consulting firm BRGC and researcher at FGV Ibre, the rebound in sales to Argentina is mainly due to a weak comparison base. “Last year was catastrophic in terms of economic growth. This year, with a better business environment and a functioning price system, the economy is finally getting back on track,” he said. Sales to Argentina remain far below their most recent peak in 2011, when Brazil exported US$22.7 billion to the country.

Nonetheless, Argentina’s recovery could help Brazil redirect exports that would otherwise go to the U.S., should Trump’s proposed tariffs come into effect.

“It’s not the same export basket — the U.S. buys a lot of aircraft, for instance, which Argentina won’t. But both countries import manufactured goods and engage heavily in intra-firm trade. That’s very different from Brazil’s average export profile, which is dominated by commodities,” Ribeiro explained. “So Argentina is a better candidate than other partners for this redirection.”

Gomes of Abimaq is more skeptical. “It’s a natural market since it’s part of Mercosur. Companies that are just starting to export often look to South America and Argentina. But it’s not a quick or easy shift,” she said. “Many firms are U.S.-owned and manufacture in Brazil with an eye on the U.S. market. On top of that, buyers often have strict technical requirements, making the process more difficult.”

Barral also sees limited potential. “For many products Brazil exports to the U.S. — fruits, grains, meat — we compete with Argentina. And the Argentine market is much smaller than the American one,” he summarized.

Source: Valor Econômico

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