With a 16% increase in exports and a 27% reduction in imports, Argentina achieves a trade surplus of $230 million with the United States in 2024. This marked the first time in nearly two decades that the South American nation has reversed its long-standing trade deficit with the world’s largest economy. Over the past few decades, Argentina has consistently maintained a trade deficit with the United States, with an annual average shortfall of approximately $2.7 billion.
Argentina Regains a Trade Surplus with the United States
Industrial manufactures and fuel-related products dominate Argentina’s exports to the United States, positioning the U.S. as the country’s second-largest export destination, surpassed only by Brazil. These two key sectors account for nearly 70% of Argentina’s total external sales. Among the primary goods exported to the United States are crude oil, gasoline, gold, aluminum, steel, lithium carbonate, wines, honey, beef, and seafood.
However, in a significant development for Argentina’s metallurgical industry, the U.S. government under President Donald Trump announced a 25% tariff on all aluminum and steel imports, a move expected to impact Argentine producers significantly. In 2023, Argentina exported aluminum to the United States valued at $505 million, with an annual average of $427 million between 2018 and 2023. Similarly, exports of cast iron, iron, and steel pipes to the U.S. reached $60 million in 2023, with a six-year average of $127 million between 2018 and 2024.
The Role of Argentina’s Provinces in U.S. Trade
At the provincial level, between 2018 and 2023, Chubut emerged as Argentina’s most commercially engaged province with the United States, directing 37% of its exports to the U.S. market. Additionally, provinces such as Neuquén, Santa Cruz, Misiones, Corrientes, Mendoza, Tucumán, and Tierra del Fuego, Antártida e Islas del Atlántico Sur each allocated over 20% of their shipments to the United States. In 2023 alone, the U.S. solidified its position as the principal trading partner for six provinces: Salta, Tucumán, Misiones, Corrientes, Río Negro, and Chubut.
Factors Behind the Newly Achieved Trade Surplus
Despite the positive trade balance, it is essential to recognize that Argentina achieved a trade surplus with the United States in 2024 primarily due to a contraction in imports rather than an unprecedented export surge. Approximately 73% of the surplus is attributed to reduced external purchases. This import decline was fueled by the expansion of domestic energy production and a deceleration in Argentina’s economic activity during the first half of the year.
The United States remains Argentina’s third-largest source of imports, accounting for 10% of the total in 2024. Over recent years, Argentina has worked to recover its imports of capital goods from the U.S. after hitting a low point in 2020. In 2024, purchases of capital goods from the United States increased by 7%, reaching their highest level in six years. In contrast, the importation of intermediate goods saw a 20% decline, settling 12% below the five-year average. Furthermore, the energy trade surplus contributed nearly 60% reduction in fuel and lubricant imports from the United States.
The Significance of U.S. Imports for Argentina’s Economy
Argentina relies heavily on imports from the United States for several key sectors of its economy. Among the most significant imported products are automobiles, automotive components, industrial machinery, pharmaceuticals, diesel fuel, capital goods components, tires, insecticides, fertilizers, and plastic-based manufactured goods. Given Argentina achieves a trade surplus primarily through reduced imports, the anticipated economic recovery in 2025 may lead to a resurgence in demand for these essential goods throughout the year.
U.S. Foreign Direct Investment in Argentina
Beyond trade, capital flows between Argentina and the United States play a crucial role in the bilateral economic relationship. The United States remains the largest foreign investor in Argentina, accounting for 18% of the country’s accumulated foreign direct investment (FDI) as of the first half of 2024. With an investment stock surpassing $30 billion, U.S. investment in Argentina has increased by 10% compared to 2023. This growth underscores the confidence that American businesses continue to have in Argentina’s economic potential despite the challenges posed by economic fluctuations and policy shifts.
Outlook for Argentina-U.S. Trade Relations
While achieving a trade surplus marks a notable milestone for Argentina, the sustainability of this balance remains uncertain. If Argentina’s economy rebounds in 2025 as projected, the rise in imports—particularly of capital and intermediate goods—could offset current surpluses. Additionally, ongoing trade policy changes in the United States, such as the recently imposed tariffs on aluminum and steel, may present new challenges for Argentina’s export sector.
However, Argentina achieves a trade surplus at a time when deeper economic cooperation with the United States could provide new investment opportunities. The strengthening trade and investment ties between the two nations signal potential for further collaboration. As Argentina navigates global trade dynamics and domestic economic reforms, its relationship with the United States will remain a critical pillar of its economic strategy.
Conclusion
Argentina achieved a trade surplus with the United States in 2024, marking a turning point in the economic relationship between the two nations. This development highlights the shifting dynamics of Argentina’s trade, primarily driven by a contraction in imports rather than a substantial export surge. While industrial manufactures and fuel-related products continue to anchor Argentina’s external sales, the trade surplus reflects structural changes in the country’s domestic production and economic conditions.
As Argentina achieves a trade surplus, it underscores the importance of maintaining balanced trade policies that support local industries while fostering international partnerships. However, the sustainability of this surplus remains uncertain significantly, as Argentina’s economy stabilizes and import demand for capital and intermediate goods rebounds. Given that Argentina achieves a trade surplus primarily through reduced imports, future trade balances will depend on economic recovery and strategic investments in key industries. U.S. foreign direct investment will be crucial in shaping Argentina’s long-term economic trajectory, reinforcing the deep-rooted economic ties between the two countries. As Argentina achieves a trade surplus after nearly two decades of deficits, policymakers must focus on fostering export growth and diversifying trade to sustain this newfound equilibrium in the years ahead.