Companies in the Region Develop Express Tactics While the Tariff Extension Lasts
by the El Reportero wire services
The 90-day tariff pause ordered by US President Donald Trump is being taken advantage of by companies in major Latin American economies trying to build up inventories to weather the impact of the trade war. The partial truce has provided them with a critical window to readjust their operations.
“Companies are rushing to import everything they can,” said Alejandro Arroyo Welbers, director of Programs in International Trade and Regional Economies at Argentina’s Universidad Austral, as quoted by Bloomberg on Tuesday. He even stated that the ports of Shanghai, Ningbo, Shenzhen, and Qingdao in China are “totally congested,” as was observed in 2021, when they were overflowing with products to overcome the disruptions to supply chains caused by the COVID-19 pandemic.
This accelerated growth reflects the urgency of importers to take advantage of the 90 days in which Trump reduced tariffs on Chinese imports, as well as the Asian giant’s counter-response. This dynamic not only impacts large corporations but also medium- and small-sized Latin American businesses that depend on imported technological inputs, machinery, and intermediate products to sustain their production chains.
For example, Mexican companies not covered by the US-Mexico-Canada Agreement (USMCA) have opted to import strategic inputs and also to advance exports before they are subject to tariffs. This behavior not only demonstrates business agility, but also a structural concern about possible future restrictions, which could translate into high costs and a loss of international competitiveness.
Furthermore, Brazilian, Chilean, and Colombian companies have begun to review their bilateral agreements with Asia, and several have resumed previously paused trade negotiations, given the possibility of the trade war escalating further.
Looking to Europe?
The 8th Ibero-American Congress of the Business Council Alliance for Ibero-America (Ceapi) was recently held in Seville, Spain. It was agreed that, amid the dispute between the US and China, a window of opportunity has opened to strengthen ties between Latin America and Europe.
In a manifesto entitled “More Ibero-America, a global strategy in a multipolar world,” they proposed integrating into global value chains and strengthening legal security to attract investment, develop their own technology, and reduce dependence on unstable trading powers.
“Latin America has all the potential to be a protagonist in the new global order,” concluded the VIII Congress of the CEAPI, encouraging the public and private sectors to adopt a more strategic vision.
These measures are being taken amid the uncertainty caused by Trump, who is using the “carrot and stick” approach. Meanwhile, companies are analyzing possible scenarios, seeking alternative suppliers, and adapting their logistics models to withstand unexpected economic shocks, trusting that agility and diversification will be their best defenses.
