Trump and his Latin American allies

As the US pivots its attention back to Latin America, Argentina and Brazil find themselves treated very differently under Donald Trump’s policy. Argentina benefits from massive American support, including a proposed $20 billion currency swap and bond purchases, while Brazil faces punitive 50% tariffs on exports like beef and coffee after convicting former president Jair Bolsonaro for attempting a coup. The contrast highlights a shift in Washington’s approach: economic logic is often sacrificed for political theatrics.

Trump’s backing of Argentina’s President Javier Milei, whose early economic reforms have cut inflation and improved fiscal balances, contrasts sharply with his attacks on Brazil’s judiciary. Bolsonaro’s prosecution, the first civilian court trial of a failed coup in Brazil’s history, has been met with US tariffs—measures that hurt American consumers more than Brazilian producers. Brazil is responding by diversifying exports toward Asia and BRICS partners, reducing reliance on the US market.

Meanwhile, Argentina quietly maintains strong ties with China despite Trump’s ideological favor. A recent grain tax holiday meant to help local farmers ended up diverting sales from American buyers to China, underlining how these policies can backfire. Both countries are navigating domestic political challenges ahead of elections: Milei faces legislative hurdles, while Lula’s popularity in Brazil is bolstered by opposition to American tariffs.

The broader lesson: treating Latin American economies as an ideological contest risks undermining US influence. Argentina and Brazil prioritize stability over ideology, and pragmatic alternatives from China and Europe are increasingly attractive. Until US policy separates personal affinity from economic reality, Washington may lose ground in its own hemisphere.

Marco Cacciati, bne Intellinews