South America nations are cautiously optimistic after former U.S. President Donald Trump unveiled new trade tariffs. While countries worldwide brace for impact, South America has largely escaped harsh penalties. Ten of the continent’s 12 nations were handed a relatively low 10% tariff rate. Even Guyana and Venezuela, initially facing 38% and 15% respectively, saw their rates eventually lowered to 10% after Trump paused elevated tariffs for 90 days.
In stark contrast, China faces a crippling 145% tariff, while Canada and Mexico still endure 25% tariffs on selected exports. Analysts argue that higher duties on China, Canada, and Mexico could make South American exports more attractive to U.S. and global markets. However, many caution against overly optimistic projections, warning that the global trading environment remains volatile.
South America’s commodity-rich economies, particularly Brazil and Argentina, could benefit from the shifting dynamics. Brazil, a top global exporter of soybeans and iron ore, may find new opportunities as China seeks alternatives to U.S. agricultural goods. During Trump’s first term, a similar situation boosted Brazilian soybean sales after China pivoted from U.S. suppliers.
Frederico D’Avila, a Brazilian farmer and former politician, told the media that Trump’s earlier trade policies were “excellent for Brazilian agriculture.” However, not all experts agree. Juan Carlos Hallak, professor at the University of Buenos Aires, noted that while trade patterns may shift, overall profits may not significantly increase as commodity prices are dictated globally, not bilaterally.
Other South American sectors are also eyeing potential gains. Brazil’s beef industry, for instance, is targeting Japan — a market that currently sources 40% of its beef from the U.S. Meanwhile, Brazilian coffee and footwear industries could capitalize if tariffs on Asian competitors like Vietnam and Indonesia are reinstated.
Still, risks persist. Even at 10%, tariffs could suppress U.S. demand for South American goods like oil, copper, and lithium. Furthermore, steel and aluminium exports from Brazil and Argentina face 25% duties, and concerns are mounting about market displacement from Chinese products.
Global commodity price volatility, partly triggered by U.S. tariff policies, is another serious threat. Chile and Peru, heavily reliant on copper exports, are particularly vulnerable. Eduardo Levy Yeyati, former chief economist at Argentina’s Central Bank, warned that while South America might enjoy short-term gains, the broader instability could deliver significant economic headwinds.
Moreover, experts caution that if South America substantially boosts exports either to the U.S. or China, it may find itself facing retaliatory measures from Washington. Trump’s ultimate aim, they stress, is to promote American production — not replace one set of imports with another.
As the region navigates this uncertain terrain, leaders like Uruguay’s new President Yamandú Orsi suggest that the shifting global landscape could also accelerate pending trade agreements, such as the long-delayed EU-Mercosur deal.
For now, South America’s fortunes remain closely tied to a precarious and unpredictable global trading system.
