Implications of Argentina-USA Zero Tariff Frameworks

Argentine President Javier Milei has expressed intentions to negotiate a trade deal with the United States that could eliminate tariffs on certain exports, aligning with his libertarian free-market policies and his ideological affinity with U.S. President Donald Trump. Reports suggest that discussions have focused on achieving a zero-tariff framework for 50 Argentine export products, aiming to enhance bilateral trade. Currently, the U.S. has imposed a baseline 10% tariff on Argentine goods as part of a broader reciprocal tariff policy announced by Trump, effective April 5, 2025, with higher rates applied to other countries.

Argentina’s government views its placement in the minimum tariff bracket as a diplomatic success and is leveraging this position to push for an exemption or a full zero-tariff deal. Milei has highlighted progress in resolving trade barriers, with negotiations reportedly addressing regulatory adjustments to meet U.S. reciprocity demands. While no official agreement has been signed yet, the groundwork is being laid through high-level meetings, such as those between Argentine Foreign Minister Gerardo Wertheim and U.S. Secretary of State Marco Rubio, as well as Milei’s planned discussions with Trump.

Eliminating tariffs on key Argentine products—potentially including agricultural goods like beef, soybeans, and wine, or industrial items—would make them more competitive in the U.S. market. This could increase export revenues, critical for Argentina’s economy, which has been grappling with high inflation and foreign currency shortages. American consumers might see lower prices for Argentine imports, particularly in food and raw materials, enhancing purchasing power and diversifying supply chains away from other global suppliers.

A trade deal could encourage U.S. companies to invest in Argentina, drawn by cheaper access to the U.S. market and Milei’s pro-business reforms (e.g., deregulation, tax cuts). This could spur job creation and economic growth in Argentina. Argentina might reduce its trade deficit with the U.S. if exports surge, though this depends on whether the U.S. also gains tariff-free access to Argentina, potentially increasing American exports like machinery or tech goods. A zero-tariff deal would signal a deepening alliance between Milei and Trump, rooted in shared ideological principles like free-market capitalism and anti-socialism. This could elevate Argentina’s geopolitical standing as a favored U.S. partner in

For Milei, securing this deal would bolster his domestic credibility, proving his unconventional approach delivers results. For Trump, it could showcase his “America First” policy adapting to strategic partnerships, countering criticism of isolationism. Argentina’s pursuit of a bilateral deal risks straining relations with Mercosur partners (Brazil, Paraguay, Uruguay), who may see it as a violation of the bloc’s common external tariff rules. This could lead to diplomatic friction or even Argentina’s exit from Mercosur, a move Milei has hinted at favoring. A U.S.-Argentina deal might pressure other Latin American countries to seek similar arrangements, potentially reshaping regional trade patterns. Brazil, a Mercosur heavyweight, could view this as a competitive threat, prompting counter-negotiations.

Argentina’s pivot toward the U.S. could weaken China’s economic foothold in the region, where Beijing has been a major buyer of Argentine commodities and an investor in infrastructure. This aligns with U.S. efforts to counter Chinese dominance in the Global South. If successful, this could inspire Trump to pursue zero-tariff deals with other ideologically aligned nations, shifting U.S. trade policy from broad tariffs to selective partnerships. However, it might also provoke retaliatory tariffs from excluded countries.

Risks and Uncertainties

Regulatory alignment, U.S. Congressional approval (if required), and Mercosur’s response could delay or derail the deal. Argentina’s economic instability might also undermine its capacity to sustain increased trade. If the deal heavily favors U.S. exports or specific Argentine sectors (e.g., agribusiness), it could exacerbate inequality within Argentina or strain U.S. domestic industries facing cheaper imports. The agreement’s longevity could hinge on Milei and Trump remaining in power, as successors might not prioritize or honor it. A zero-tariff pact could turbocharge Argentina’s economy and cement a strategic U.S. partnership, but it risks regional backlash and depends on navigating complex trade-offs.

If successful, this could mark a significant shift in trade relations, potentially making Argentina the first country to secure a zero-tariff arrangement with the U.S. under Trump’s administration. However, challenges remain, including Argentina’s obligations under Mercosur, which restricts individual members from negotiating bilateral free trade agreements outside the bloc. For now, the zero-tariff goal remains aspirational pending formal ratification and resolution of these regional constraints.