How is the trade relationship between Argentina and Brazil today: US$31 billion at stake and the impact of the diplomatic conflict

Brazil is Argentina’s main trading partner since 1991. The relationship had moments of tension in the last 50 years, as in the ’60s and ’70s due to differences over the nuclear arms race and the Itaipú dam. Starting in 1985, with the signing of the agreements between the former presidents Raúl Alfonsín and José Sarney A commercial integration process began that deepened with the signing of the Mercosur Treaty of 1991, led by Carlos Menem y Fernando Collor de Mello.

In 2025, the commercial exchange between both countries, of US$31,195 millionset a record in 13 years. The highest historical figure was US$ 39.616 million in 2011, when the leaders were Cristina Kirchner and the current Brazilian president Lula Da Silva.

In the first half of 2026, the exchange touched US$14 billion. And in June, he registered a deficit for Argentina of US$ 241 millionwith exports by US$ 1,176 million and imports by US$ 1,417 millionaccording to the latest Indec report.

Brazil is the number one destination for national exports. Representa 13% of the total shipments and 69% of those who go to Mercosur. In 2025, they will reach US$12,771 million. Vehicles, plastics, oil and derivatives, chemicals and petrochemicals, wheat, frozen pre-fried potatoes and aluminum They are the goods that Argentina sells the most.

Meanwhile, imports from the neighboring country added US$18,424 million in 2025. They focus on vehicles, tires, auto parts, fertilizers, agricultural inputs, capital goods and pharmaceutical products.

Brazil is ranked fourth in foreign direct investment in Argentinabehind the United States, Spain and the Netherlands, with 8% of the stock, according to the Rosario Stock Exchange.

The companies They ruled out the interruption of their activities and the development of projects. “The focus is on strengthening ties. Political situations change, but the commercial, industrial and energy relationship takes decades construction and depends on predictability, not the situation. They are strategic partners, with enormous mutual interest in continuing to deepen that relationship,” stated the Argentine-Brazilian Chamber of Commerce, Industry and Services (chambers).

In the automotive industry, for 35 years, Argentina and Brazil maintain the Economic Complementation Agreement No. 14 (ACE 14), which facilitates the exchange of vehicles without tariffs and is one of the keys to productive integration between the two countries. It will be valid until June 2029 and in the sector There is uncertainty with this climate about its renewal, although they hope it will be extendedonce the tension is released.

According to the consultant Abeceb, Vehicle exports to Brazil fell 23.3% year-on-year in the first half and those of engines and other parts fell 16,4%. The case was different for cargo vehicles, which rose 21,5%.

In that sense, beyond the fact that an escalation could affect the dynamics of Mercosur because Argentina and Brazil, as the two main economies of the bloc, drive the negotiations and the agenda, For the moment, it would be limited to the diplomatic and ideological.

“If it does not scale, trade will not be interrupted. It is contained by the relationship of the sectors, the actors and the agreements. “Brazil is our main buyer of industrial products, almost the only one,” he said. Diego Guelarformer Argentine ambassador to Brazil.

“Today, we are below the record of almost $40 billion in 2011, but Brazil continues to be the main seller and buyer. Importers and exporters will eventually express their claims, for now they are not affected,” he highlighted. Juan Pablo Lohléformer Argentine ambassador to Brazil.

“We are at a high level of tension, as has not been seen for a long time, but I do not see a disruption or restrictive measures on trade or investment“We have to see how the conflict evolves,” he considered. Marcelo Elizondoexpert in foreign trade.