Global trade tensions show no signs of easing, but two Latin American nations could stand to gain from the escalating situation. US President Donald Trump announced plans to impose reciprocal tariffs on goods from countries that have hit American products with levies.
Trump stated, “THREE GREAT WEEKS, PERHAPS THE BEST EVER, BUT TODAY IS THE BIG ONE: RECIPROCAL TARIFFS.” He is set to hold a news conference later today to discuss the matter.
Earlier this week, Trump approved tariffs on all steel and aluminum imports, as well as additional duties on Chinese imports and 25% levies on Canadian and Mexican products. However, these charges were suspended for 30 days.
Many experts have warned that trade wars could lead to economic pressure for everyone involved. But Bank of America believes Brazil and Argentina may be the beneficiaries of US tariffs imposed on China, Canada, and Mexico.
The bank notes that China is likely to increase soybean imports from South America, with Brazil being a prime alternative to Mexico and Canada for corn imports. This could lead to increased planting areas in Brazil, resulting in strong growth in the agribusiness sector.
Brazil’s stock market has outperformed the US benchmark so far this year, while Argentina’s Merval Index is still up 43% over the past six months despite a recent decline. For investors looking to gain exposure to these markets, two ETFs are available: iShares MSCI Brazil (EWZ) and Global X MSCI Argentina (ARGT).
Additionally, Baird has initiated research coverage of turbine maker GE Vernova with an outperform rating, forecasting over 20% upside due to rising demand for energy generation solutions.
Source: https://www.cnbc.com/2025/02/13/argentina-and-brazil-to-benefit-from-us-tariffs-bank-of-america-thinks-so.html