With the world’s attention drawn to the US-China trade dispute and a potential resolution on the sidelines of the G20 Leaders Summit, Argentina yesterday underlined its intention to deepen financial ties with both nations.
On the first day of the summit, however, Argentina was moved to push back on a remark made by White House Press Secretary Sarah Huckabee Sanders, suggesting that Argentina sides with the United States in its trade war with China.
Sanders said Friday that Presidents Donald Trump and Mauricio Macri had “reiterated their shared commitment” to face challenges that include “predatory Chinese economic activity” during a morning meeting on the sidelines of the Buenos Aires summit.
However, a senior Argentine official, speaking anonymously, told The Associated Press that the “adjective used by Sanders is too strong and doesn’t reflect” Argentina’s relationship with Beijing.
Foreign Minister Jorge Faurie later indicated that he “didn’t think that there had been a reference in those terms.”
The pushback came after Macri had hosted Trump at the Casa Rosada pre-summit for breakfast.
To much fanfare, the government signed a “Framework to Strengthen Infrastructure Investment and Energy Cooperation” with the United States Friday morning. The agreement is part of the so-called America Crece, a US initiative aimed at expanding opportunities in energy trade, investment and finance and spurring economic growth for both countries.
“This framework should help catalyze private sector capital for investments across the energy value chain, including upstream energy production, power generation, transmission, and distribution,” said US Treasury Secretary Steven Mnuchin. “Energy is a key driver of economic development. It is a great step forward for the United States and Argentina.”
The two countries committed to support investments in infrastructure and development of the energy sector; adopt cleaner energy sources like natural gas and renewable energy, and enhance energy efficiency and smart-grid technology usage.
US trade with Argentina totalled an estimated US$26.3 billion in 2017, while the goods and services trade surplus was US$10.9 billion, according to the US Office of Trade Representative.
In contrast, China is Latin America’s second-largest trading partner, and Latin America is the second destination for Chinese exports, according to the Economic Commission for Latin America and the Caribbean (CEPAL). In 2017, trade between both parties reached US$270 billion.
“Argentina continues to have excellent relationships with both countries,” said Marisa Bircher, the nation’s international trade secretary, said at a G20 briefing on Thursday. “Both the US and China trust Argentina and we are looking to increase trade and investments with both.”
Hanging over the summit in Buenos Aires is the trade dispute between US President Trump and Chinese President Xi Jinping, who have imposed tariffs on hundreds of billions of dollars on each other’s imports.
The leaders will meet on the sidelines at a high-stakes dinner in Buenos Aires on Saturday to attempt to resolve differences. Beijing hopes to persuade Trump to abandon plans to hike tariffs on US$200 billion of Chinese goods to 25 percent in January, from 10 percent at present.
The US-China escalating trade war has recently generated a change in the grain trade – and Argentina has found itself in the middle of the conflict. The country recently raced to the top of the list of US soybean importers, buying 1.3 million metric tons from September to November, according to the US Department of Agriculture.
Since May, US beans have in fact fallen by 15 percent as a consequence of China’s tariffs, which came in retaliation for Trump’s duties on Chinese steel and aluminum. The tariffs have virtually halted purchases of US soybeans that last year totaled US$12 billion, leaving US farmers and grains merchants with huge inventories of soybeans.
Argentina’s increased purchases from the US have, in turn, allowed it to sell more of its own soybeans to China, which needs other suppliers now that its purchases of the crops from the US have virtually ended.