Argentina: US Trade Framework Advances Milei’s Vision of a Commoditized Argentina

What happened: The Trump administration announced a framework trade deal with Argentina after bailing out the Milei administration ahead of the October midterms.

Why it matters: The agreement encourages investment in natural resources from US firms but will likely trigger pushback from the manufacturing sector.

What happens next: The final deal will take months to finalize; lobbying on both sides will seek to influence the outcome.

On 13 November, the White House announced a framework agreement with Argentina on reciprocal trade and investment. The deal comes a month after the US Treasury Department intervened heavily in Argentina’s foreign exchange market to prop up the peso and avert a devaluation in the run-up to the 26 October midterm elections, which President Javier Milei’s La Libertad Avanza party won by a larger-than-expected margin.

So far, this is a victory for Trump. The US got many more trade concessions from Argentina than the other way around, as the Trump administration sought to counter the internal criticism it received for the $20bn currency swap that Economy Minister Luis Caputo agreed with his US Treasury Secretary Scott Bessent.

It will take weeks — or even months — to finalize the text. Milei will likely sign the framework agreement with Trump in early December, when he travels to Washington, DC, to attend the draw of the 2026 World Cup (Argentina is the reigning champion). The different chapters will be announced and implemented in installments.

For Argentina, the agreement gears toward the commoditization of the economy that Milei has been pushing since he took office in December 2023. The US receives preferential access to high-value manufactured goods, including medicines, chemicals, machinery, information technology products, medical devices, and motor vehicles. Argentina will benefit from lower tariffs on “certain unavailable natural resources,” with critical minerals specifically mentioned.

The initial understanding also has a chapter on investment cooperation, but the details have not been made public. Horizon Engage contacts in the negotiating teams say the focus will be on critical minerals, building on an MoU the two countries signed in August 2024 to share information and expand bilateral investment in the supply chain.

Milei envisions a country that relies almost exclusively on farming, energy, mining and services to make ends meet. This agreement goes in that direction, and resource-rich provincial governors welcomed it, even one governed by a member of the Peronist opposition, Catamarca’s Raul Jalil (see Featured Personality).

By contrast, his fellow Peronist Axel Kicillof, governor of Buenos Aires province, said the agreement will hurt the province, which is a manufacturing hub and home to most of the country’s SMEs.

As details of the agreement become available, there will be pushback from some sectors. One to watch is manufacturing, which employs one in every four Argentines working in the private sector.

On 13 November, the UIA manufacturing association held its annual conference in Buenos Aires and warned against the Milei vision of a commoditized Argentina. Paolo Rocca, head of the Techint Group conglomerate, said that Argentina cannot rely solely on natural resources. Rocca has interests in both manufacturing and energy, and is also expanding into mining. He has a lot of lobbying power.

In our view, the trade and investment agreement is a positive development, but its implementation will be slow. Its ultimate impact will depend on both the fine print and the development of bilateral relations once Trump and Milei are no longer in charge.

Energy and mining Investors will get easier and cheaper access to machinery and inputs for their operations, which should reduce overall costs. Meanwhile, the benefits for US investors vis-à-vis other nationalities that might arise from the investment provisions of the agreement are, at least in the short term, offset by the RIGI investment program introduced by the Milei administration in 2024, which offers benefits for 30 years to those who apply.