China displaced Brazil as the main trading partner for the first time in almost three years: what were the causes?

He INDEC reported this Monday that China concentrated 15.9% of total exports and 25.2% of imports, which represented a bilateral exchange of US$3,109 million. Meanwhile, Brazil accounted for 14.4% of sales and 23.9% of purchases, equivalent to an exchange of US$2,892 million.

The causes of Chinese advance in commercial exchange

Firstly, China’s advance as a partner largely responded to an extraordinary year-on-year increase of 201.7% in our exports, mainly derived from the temporary removal of withholdings. This generated a boost in sales of soybeans and their derivatives, which have the country in question as their main destination.

In a report published during the day, the consulting firm Abeceb highlighted this factor as fundamental, although he also stressed the relevance of 31.3% increase in imports from the East, “which reached their highest level in the entire historical series mainly due to purchases of consumer goods in the semi-durable and durable segments”.

On the other hand, it is also decisive growing deficit of the automotive sector. While imports of Asian cars increase, exports to Brazil fall, precisely due to the boom in Chinese vehicles that is being observed in the country presided over by Lula Da Silva.

“The automotive sector’s deficit continues to widen, more than doubling in the last year (from US$338 million to US$818 million). This increase is mainly explained by an increase in imports, driven because The entire quota of hybrid electric vehicles that could be imported at 0% tariffs was completed. Chinese brands, with special emphasis on BYD, were the ones that absorbed most of the import quota“Abeceb explained in detail.

For its part, Daniel Schteingartdirector of Sustainable Productive Development at Fundar, highlighted the rise that China has been having as a trading partner in the entire region for years now. On the other hand, he added that “the weakening of Argentine industrial exports, which are mainly directed to other countries on the continent, are falling, in part, because China has been displacing us from those markets”.

While China becomes the main trading partner, Milei seeks to close an agreement with the US

In this way, China is once again the main trading partner, just at a time when Javier Milei’s government is negotiating an agreement with the USwhose announcement seems to be imminent. According to what is reported from Casa Rosada, the pact would include a long list of products, some of them “key”, without tariffs on the part of both countries and a patent benefit for North American laboratories, among other points.

While the local ruling party seeks to obtain support to contain exchange pressures and give certainty to future debt payments, in the US the management of Donald Trump intends to make Argentina his main ally in the regionon the condition that his country has priority over China when bringing investments and imported products.

According to the Interdisciplinary Institute of Political Economy (IIEP) of the UBA, If Argentina manages to reduce exports to the US, which currently have 10%, to zero, the gain could represent some US$457 million.(7% of total sales to that country). Most of these additional dollars would be contributed by the sales of processed foods (such as wine), machinery and equipment, meat and fish.

The figure could be much higher if the agreement includes aluminuma product that today is subject to a 50% surcharge. This would benefit, for example, Aluar, whose turnover depends on more than 70% of its sales abroad.

Currently, the US completes the podium of trading partners, behind China and Brazil. However, it is worth emphasizing that The exchange with the Asian country is usually much more complementarywhile with the North American there is greater competition, an issue that is particularly important in soybean cultivation.