[Source/Observer Network, Chen Sijia] Trump's indiscriminate use of tariffs increases the risk of a global economic recession. This time, even the "MAGA superstar" is not following him.
"President Milei of Argentina is a superstar in the MAGA universe, but he is going against Trump on trade policies." The Wall Street Journal reported on April 20 that while President Trump insisted on starting a "tariff war," Milei did the opposite, continuously relaxing tariffs and import restrictions, causing the quantity of goods imported from China and other countries to surge in Argentina.
Milei has always been a supporter of Trump, imitating Trump's measures in many fields, such as befriending American billionaire Musk, cutting government spending, and announcing that Argentina would withdraw from the World Health Organization. During the 2023 election period, Milei also made derogatory remarks about China, calling it an "assassin" and claiming he would sever ties with China.
The report said that these measures earned Milei praise from American conservatives, making him almost a "shining star" in Trump's MAGA universe. However, on trade policy, Milei is going against Trump. While Trump insisted on increasing tariffs, the Argentine government relaxed tariffs and import restrictions, leading to a surge in imports.
Milei recently canceled the requirement for electronics importers to prove product safety and removed import restrictions on products such as tires, cement, and elevators. In February this year, Argentina's import volume increased by more than 40%, reaching nearly $6 billion, with significant growth in imports from the U.S., Europe, and Brazil, and Chinese imports doubling.
Dock area in Buenos Aires Province, Argentina, Agence France-Presse
Jonathan Hauman, a salesperson in Buenos Aires, the capital of Argentina, said: "Chinese mobile phones are now the new trend; they are really great and cheaper."
The Wall Street Journal reported that supermarkets in Argentina are now selling Italian noodles, Brazilian instant coffee, Greek olives, and American canned goods, with some prices being half of those of local Argentine brands. These affordable foreign goods have been welcomed by the Argentine public. Local resident Mariela Manfredi said: "If domestic products are more expensive, perhaps they should start lowering their prices."
Although Argentina still imposes high tariffs on many goods, restricts dollar transactions, and taxes agricultural exports, Milei has implemented a series of measures to weaken protectionist economic policies. In terms of trade policy, Milei is almost moving in the opposite direction of Trump, whose trade policies are more similar to those of Milei's political rivals, the Peronist politicians in Argentina.
The report pointed out that in the 1930s, to cope with the Great Depression, Argentina began implementing an isolationist economic policy, attempting to build a "self-sufficient" economy. Therefore, Argentina has long maintained some of the strictest trade restrictions in South America. In 2023, Argentina's imports accounted for 14% of its GDP, less than half of that of neighboring Chile.
Juan Gonzalez, a university student in Buenos Aires, said: "It seems very strange to me that Milei strongly supports Trump. Trump's protectionism aligns more closely with Peronists, while Milei strongly opposes Peronist economic policies."
Argentine President Milei, Visual China
Milei previously claimed that opening up Argentina's market would create more companies capable of production, reduce their reliance on state subsidies, and enhance their export capabilities. However, some Argentine enterprises expressed concerns, stating that cheaper imported goods might impact the local manufacturing industry.
Daniel Rosato, head of a small industrial enterprise association in Argentina, bluntly stated: "Competing with China is impossible."
The Wall Street Journal noted that the surge in imports has put even greater pressure on the already strained foreign exchange reserves of Argentina's central bank, as the demand for dollars from companies importing foreign goods has rapidly increased.
Economists also worry that Trump's tariff policies increase the risk of a global economic recession, which could threaten Argentina's economic recovery. Dante Sica, former Minister of Production and Labor of Argentina, said: "It's like landing a plane on a sunny day, only to suddenly encounter a storm, making the landing much more difficult."
Although Milei frequently hyped the "China threat" during his campaign, his attitude toward China softened after taking office. On April 10th, the Central Bank of Argentina released a statement saying that both China and Argentina agreed to extend part of the amount of their local currency swap agreement for another 12 months until June 2026. According to the statement, the extended amount is worth 35 billion RMB (5 billion USD).
Associated Press commented that using Renminbi instead of US dollars for payment provides breathing room for Argentina's increasingly depleted foreign exchange reserves, thus supporting the volatile peso. This helps troubled Argentine businesses pay for Chinese imports and makes Chinese enterprises easier to invest in Argentina.
China has been Argentina's second largest trading partner and largest source of imports for years. Argentina is China's sixth largest trading partner in Latin America, sixth largest export market, and fifth largest source of imports. Statistics show that the bilateral trade scale between China and Argentina reached 17.399 billion USD (approximately 126.16 billion RMB) in 2023.
In January, Milei stated at the World Economic Forum Annual Meeting in Davos in 2025 that Argentina intends to strengthen commercial ties with China. "We believe that Argentina and China have complementary economies, and we have a lot we can do together — they are excellent trading partners. Our goal is to deepen business ties."
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Original source: https://www.toutiao.com/article/7495612433088791092/
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