China displaces Brazil as Argentina's main trading partner: analysis of a historic change

An unexpected turn in Argentina's foreign trade contradicts the official discourse and marks a milestone in regional economic relations

In a move that few anticipated at the beginning of Javier Milei's administration, China has managed to displace Brazil as Argentina's main trading partner, marking a turning point in the country's recent economic history. This change, first registered in September 2024 and consolidated in October of the same year, represents a political paradox that exposes the distance between presidential rhetoric and economic reality.

The time for change

The milestone came in September 2024, when the Asian giant surpassed the Brazilian neighbor in total trade with Argentina. Argentine exports to China tripled that month, reaching record figures driven mainly by extraordinary sales of soybeans. Simultaneously, imports from the Asian country reached 1,816 million dollars, the highest level in the entire historical series.

This transformation is especially relevant considering that Brazil had maintained its leadership position for decades, supported by geographical proximity, Mercosur membership and significant productive integration, especially in the automotive sector.

A political paradox

China's rise as a major trading partner is particularly striking when considering the campaign speech of President Milei, who in 2023 had emphatically declared: "Not only am I not going to do business with China, I am not going to do business with any communists." However, economic reality imposed a different narrative.

According to official INDEC data, in October 2024 China consolidated its leadership with Argentine exports of 1,166 million dollars (a year-on-year increase of 241.4%) and imports of 1,862 million dollars (increase of 33.7%). In that same period, the United States was relegated to fourth place, also surpassed by Brazil and the European Union.

The engines of exchange

On the Argentine side

Trade with China is characterized by a marked concentration in primary products and manufactures of agricultural origin. The main export items include:

• Soy beans and their derivatives (oil and flour)
• Frozen beef (accounting for 78.8% of the sector's exports)
• Lithium carbonate
• Fish products (squid, shrimp and prawns)
• Barley and sorghum in grain

The meat sector deserves special attention: China has become the destination of 78.8% of Argentine beef exports in November 2024, absorbing most of the exportable balance in a context of local drought and domestic market without absorption capacity.

On the Chinese side

China's insertion in the Argentine economy is characterized by products with greater added value and diversification:

• Capital goods and machinery
• Automotive Parts & Accessories
• Technological components (phone parts, transmission equipment)
• Consumer Semi-Durables and Durable Goods
• Miscellaneous industrial inputs

This asymmetry reproduces an unequal trade pattern: while Argentina provides raw materials, China exports finished products and intermediate goods with higher added value.

The international context

Brazil's displacement responds to multiple geopolitical and economic factors:

Sino-U.S. Trade War: Tariff tensions between Washington and Beijing placed Argentine soybeans in an advantageous competitive position, especially after the temporary elimination of withholdings implemented by the Argentine government in September.

Need for foreign currency: Pressed by the urgency to obtain dollars, Milei's government implemented a temporary special regime to eliminate withholdings that generated a 201.7% year-on-year increase in exports to China in September.

Anticipation of changes: The increase in imports was favored by business decisions to bring forward purchases in the face of a possible change in the exchange rate regime after the elimination of the clamp.

The cost of dependency

The trade balance with China reveals an unbalanced relationship. In 2024, the trade deficit reached $5.616 billion, the largest recorded with any trading partner. This gap is explained by the differential between what Argentina manages to sell (mainly commodities with falling prices) and what it must buy (technology and value-added goods).

Miguel Ponce, an economist specializing in foreign trade, warns about the risks of this situation: "Argentina should not privilege ideological issues over concrete interests. It is very difficult for us to displace China from our trading partners. There is a need to de-ideologize our diplomatic ties so as not to continue damaging our trade and economic relations."

Strategic implications

Chinese dominance poses several structural challenges:

Economic vulnerability: Excessive concentration in a single market exposes Argentina to political decisions by Beijing. Any change in Chinese import policies could have devastating effects on key sectors such as agriculture.

Financial dependence: Beyond trade, Argentina has significant financial commitments to China, including the currency swap for 5,000 million dollars plus interest of 6%, whose eventual demand for payment by Beijing would increase the deficit of net reserves by 50%.

Regional impact: Provinces such as Catamarca, La Pampa and Entre Ríos, with high dependence on exports to China, are particularly exposed to any fluctuation in the bilateral relationship.

New opportunities

Not everything is negative in this commercial link. In March 2025, the Argentine government agreed with Chinese Customs to reopen poultry meat exports (closed since 2023 due to avian influenza) and to enable new products such as nuts (walnuts, pecans, almonds, hazelnuts and pistachios) and gallstones for medicinal use.

These openings represent opportunities for regional economies and could allow for greater diversification of the export basket, although they will hardly alter the basic structure of trade.

Future prospects

The displacement of Brazil by China as Argentina's main trading partner does not seem to be temporary. Projections indicate that this trend could deepen by 2025, especially considering:

• China's Growing Demand for Animal Proteins and Oilseeds
• Argentina's need to maintain a steady flow of foreign currency
• China's investments in infrastructure and technology in the country
• The global geopolitical context that favors supplier diversification

For Brazil, this shift represents a warning sign about the need to strengthen trade ties within Mercosur. For Argentina, the challenge is to pragmatically manage this strategic relationship without compromising market diversification or sovereignty in political decisions.

Conclusion

China's rise as Argentina's main trading partner marks an unprecedented chapter in the country's economic history. Beyond political statements and ideological alignments, the Asian giant's influence on Argentina's foreign trade is a reality that transcends governments and discourses.

The question that remains open is whether Argentina will succeed in turning this relationship into an opportunity for development with greater added value, or whether it will deepen its role as a supplier of raw materials in an increasingly polarized global economy. The answer to this question will define not only the future of the bilateral relationship, but also the model of international insertion that Argentina will build in the coming decades.

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