Milei's unusual reaction to tariffs

Buenos AiresAmid a state of alert due to a foreseeable global recession following Donald Trump's trade war announcements, the Argentine government continues to prioritize a bilateral relationship with the United States: critics consider it an attitude of submission, while those who support it consider it an infallible strategy to "make Argentina great again" through "the... Last Thursday, Milei was invited to collect an award at President Trump's Mar-a-Lago residence, as part of the American Patriot gala organized by the Make America Clean Again Foundation, and on what is now his ninth trip to the United States since his presidency. "Argentina will move forward to readjust the regulations so that we meet the requirements of the reciprocal tariff proposal prepared by President Donald Trump," he said in his speech, after having celebrated the fact that his country had received the lowest tariffs, at 10%.

Presidential spokesman Manuel Adorni – who will be a candidate in the legislative elections for the City of Buenos Aires on February 18 May–, went so far as to say in a press conference that “Trump is not a protectionist,” but rather “does geopolitics” with tariffs. Meanwhile, Argentine stocks on Wall Street have fallen by up to 7% and the Country Risk index – the index that measures the risk of investing in Argentina – has risen to 960 points, its highest value since last November. The drop in the price of a barrel of oil is also affecting Argentine producers, such as YPF and Vista, whose shares have accumulated a 35% drop in the first months of 2025. As for the blue dollar –the parallel currency on the informal market, which measures the precise value of the Argentine peso on the international market– has shot up 35 pesos this Monday, registering the largest single-day increase this year and opening a gap of 25% against the official dollar.

"Tariffs are likely to have an impact on prices," says economist Hernán Letcher in the newspaper ARA, who estimates that this will be reflected in the April data, "in addition to reducing the possibility of large [foreign] investments that the government had promoted." Regarding the gap in economic policy between Milei and Trump, the expert is clear: "Milei does exactly the opposite of Trump in terms of protecting the domestic market and national industry: she lowers tariffs, not raises them," and highlights the defense that libertarian leaders have made in recent days "to try to explain the supposed empathy."

Meanwhile, the Argentine ultra-liberal has agreed to a new loan with the International Monetary Fund (IMF) worth $20 billion. The details of the agreement are still pending, but it is expected to be finalized soon. The announcement has angered the opposition due to bad memories of the last time Argentina went into debt with the credit institution. That was in 2018, under the government of Mauricio Macri and Economy Minister Luis Caputo, who is holding the position again under Milei. The $57 billion bailout at the time was mismanaged and made Argentina the organization's largest debtor, still with a $40 billion negative balance. Milei also insists that she hopes to move forward with a free trade agreement with the United States, a plan that would jeopardize the dynamics of Mercosur, the trade bloc formed by Argentina, Brazil, Uruguay, Paraguay, and Bolivia. In this case, Letcher says, "Argentina would be the worst hit, because with Brazil, our main trading partner, we have taken a path of complementarity that we don't have with the United States." He adds: "Brazil has more tools to defend itself in such a challenging global context."

Tariffs in the region

Brazil, Colombia, Chile, and Peru have also been hit with 10% tariffs. Lula da Silva responded forcefully against "any attempt to impose a protectionism that no longer has a place in this world" and clarified that he would take "all possible measures" against the tariffs, in a joint defense of multilateralism and free trade. As for Gustavo Petro's Foreign Minister, Laura Sarabia, she reacted calmly to the announcement, avoiding interpreting it as a punishment for Colombia or Petro, who tends to strike a confrontational tone with Trump. The official emphasized that they would work to "protect Colombian industry and Colombian exporters." For his part, Chilean President Gabriel Boric lamented the unilateral nature of the decision but sought to convey reassurance by announcing that the Chilean government had anticipated measures of this type. He also noted that the tariffs did not affect copper or lumber, key raw materials in bilateral trade with the United States.