Donald Trump’s victory and how it affects Argentina

Furthermore, from the ideological There is a libertarian position towards a pro-North American policy based on an exacerbated orientation towards the market and the private sector, with minimal state intervention and an opening of all commercial ties, a direction of foreign policy translated into submission to North American decisions and against globalism.

That said, what brings us here is not a political question but an economic question. And for that, you have to go to the data.

How Donald Trump’s victory affects Argentina

USA It is the third destination of national exports, behind Brazil and Chilewith 7.1% of the total exported for September of the current while it is the third origin of our imports, accounting for 8.5%, only surpassed by Brazil and China respectively, with a negative trade balance of less than 500 million dollars.

According to the report on export complexes for the first half of 2024 from Indec, USA It was the destination of almost 3 billion dollars of Argentine exports, of which 34% belongs to the oil-petrochemical complex and 250 million are aluminum. Here the question that brings us is how Trump’s tariff policy would be articulated in this scenario. The main export products are crude oils oil, gold, gasoline, wines, meats, lithium carbonate, honey and lemons.

Part of the application of these tariffs would contemplate these sectors, added to soybeans and other export sectors that Argentina trades with the global giant, from a position of small economic partner. For the United States we are a non-relevant actor commercially speaking, while it is a protagonist on the podium of the Argentine trade balance. What will be the impact in provincial terms for the provinces that produce crude oil, meat, aluminum and gold is one of my main doubts in this new scenario and how they affect the projects in terms of Vaca Muerta and lithium and copper in the northwest of the country . There would be just over 40 billion investments projected for the next 10 years in these strategic sectors that would not necessarily be affected but we can think that Trump’s policy could have an impact to some degree.

Do Donald Trump’s policies benefit Argentina?

I believe that Donald Trump’s policies can be counterproductive for our country. They focus on lowering internal taxes and raising tariffs, on strong protectionism and on an increase in the fiscal deficit, which could bring higher rates or, failing that, stop the cut that the FED was beginning to promote, it will be become more restrictive by trying to keep the economy stable to prevent inflation from returning, one of the reasons for the working class to vote Republican.

There are encouraging numbers from the protectionist sector that indicate that a universal base tariff of 10% combined with an internal tax cut and high rates to avoid inflationary escalation, would give just over 700 billion dollars more to the American GDP and almost 3 million of jobs, something significant and that would not require much effort.

This Wednesday the Argentine market responded positively to Trump’s victory. The Merval was above 4%, the global ones above 1%. It is understandable that we think that in the short term, closeness due to the renegotiation with the IMF, closeness in international politics and other complexes will help us. But it also complicates us due to the strengthening of the dollar via the rate, the falling prices of commodities and the positioning in terms of our commercial proximity to China. The international fervor is understandable in terms of a reduction in the role of the State in the incentive in the economy and in its role in well-being and in the provision of services, although locally there are hints beyond the “pro-market” moniker and the commitment for economic growth at any cost although keeping an eye on inflation.

I think there are two issues that the Argentine market should not overlook: International markets could be defunded to give relevance to Europe and the United States will lean towards less multilateralism, a lesser global agenda and less impact.

We are in a macro system that brought a very important social impact with an international context that could have helped. The victory of donald trump It brings up a series of questions that with the economic progress we will be able to begin to clarify. If international politics prevails and from there, Argentina has benefits, it is a good start. I wouldn’t take it for granted.