Argentina and US sign a major trade deal to slash tariffs and boost a political alliance

Argentina and US Sign Expansive Trade Deal, Cementing Milei’s Alliance with Trump

Argentina and the United States reached a significant trade agreement Thursday, eliminating hundreds of reciprocal tariffs in a move that advances President Javier Milei’s mission to integrate Argentina’s traditionally protectionist economy with global markets while supporting the Trump administration’s efforts to reduce food prices for American consumers.

The deal was signed in Washington by Argentine Foreign Minister Pablo Quirno and U.S. Trade Representative Jamieson Greer, making Argentina the first of four Latin American countries to finalize a framework agreement announced by the Trump administration last November.

For Milei, the agreement represents more than just economic opportunity—it underscores his strong ideological alignment with U.S. President Donald Trump. Argentina’s libertarian leader has dramatically reoriented his country’s foreign policy to match U.S. interests since taking office, making numerous trips to the United States and publicly supporting Trump’s policies in the Western Hemisphere.

“Today Argentina sent a clear signal to the world,” Quirno wrote on social media following the signing. “We are a reliable partner, open to trade and committed to clear rules, predictability and strategic cooperation.”

This diplomatic investment has yielded tangible benefits for Argentina. Last year, as market turbulence threatened to undermine Milei’s ambitious free-market reforms and deplete Argentina’s foreign currency reserves ahead of crucial midterm elections, Trump provided a $20 billion credit line. The financial support helped Milei avoid a currency devaluation and secure an electoral victory that boosted market confidence.

Under the new agreement, Argentina will eliminate trade barriers on more than 200 categories of U.S. goods, including chemicals, machinery, and medical devices. More sensitive imports such as vehicles, livestock, and dairy products will enter Argentina tariff-free under government-established quotas.

These concessions come at a challenging time for Argentine industries, which have long operated behind protective tariff walls. Domestic producers are already struggling with reduced sales as Milei opens the economy to competition, particularly from Chinese imports.

In exchange, the United States will remove tariffs on 1,675 Argentine products, potentially increasing Argentina’s export revenue by over $1 billion, according to the country’s Foreign Ministry. While the complete list of affected products remains unspecified, the White House indicated it includes “unavailable natural resources” and pharmaceutical ingredients.

Significantly, the U.S. will quadruple its lower-tariff imports of Argentine beef to 100,000 tons annually. However, Argentine steel and aluminum manufacturers expressed disappointment that the 50% U.S. import taxes on their products will only be “reviewed” rather than eliminated outright.

The increased beef imports could revive criticism from U.S. cattle producers and Republican lawmakers who objected when Trump first proposed boosting Argentine beef imports last October. Critics questioned the wisdom of increasing foreign competition for domestic ranchers, especially given that the two countries export many of the same agricultural commodities—soybeans, corn, wheat, meat, and oil.

The trade agreement also follows controversial U.S. purchases of Argentina’s dollar-denominated bonds and its depreciating currency, moves that sparked backlash from Trump’s political base. Some questioned why the U.S. would bail out a distant country with limited strategic importance, while Democratic lawmakers criticized what they saw as taxpayer money being used for political favors.

The controversy continues, with U.S. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, calling on Treasury Secretary Scott Bessent on Thursday to terminate the $20 billion support package.

For Milei, however, the agreement marks a significant step in his administration’s efforts to rebuild Argentina’s international economic credibility after years of defaults and isolation. As a chronically distressed economy with limited geopolitical influence, Argentina appears to be capitalizing on ideological alignment with the current U.S. administration to secure economic advantages in a relationship that has traditionally been marked by limited trade cooperation.