Some people might think that April Fool’s Day came one day late this year with the leader of the planet’s superpower declaring war on global trade worldwide last Wednesday, while here at home President Javier Milei spoke of the rights of self-determination corresponding to the Malvinas islanders. If people are to be judged by their friends and the company they keep (with the President flying up to the United States the following day), Milei should be deeply worried about having a friend like Donald Trump – both the harm to his own image and the disruption of his economic plan via a depletion of export dollars potentially outweighing any improvement in the terms of the upcoming agreement with the International Monetary Fund (IMF) obtained by Trump’s good offices. The trade wars of “Liberation Day” might make one almost miss the “cultural wars” hitherto fuelling the critics of both presidents. The White House announcements and the Malvinas controversy already leave enough on Milei´s plate from Wednesday without the Supreme Court uncertainties arising from Thursday’s Senate session.
Milei has yet to realise (or admit, if he does realise) that Trump is taking the United States into precisely the same direction from which he himself is struggling to pull out Argentina. It is still too early for an uncertain world to define whether Trump’s tariff orgy is negotiating bluff or whether he is serious – if he is serious, his data are not with fact-checkers having plenty of work ahead of them (if European Union tariffs average five percent, how come they are 39 percent for the United States?), apparently basing his “reciprocal tariffs” on taking whatever figure he has in mind for a country and doubling it for the perceived protectionism of that partner. The White House claims that auto tariffs alone will bring in US$6 trillion of revenue in the next decade but this will presumably feed into prices in a much shorter timeframe while repatriating car plants will take a few years. No country is self-sufficient in today’s world, not even a giant like the United States, and those repatriated factories will have costlier inputs. Yet rather than speculate about a reversible future, perhaps the strongest argument is to look to history and see how the Smoot-Hawley tariffs of 1930 plunged the world into a decade of depression.
And Argentina? Even if libertarians see the lowest rate of 10 percent as something to celebrate (apart from the 25 percent slapped on steel and aluminium), oil, beef, wine, fruits and multiple other products often coming from regional economies stand to suffer, costing the country vital export dollars when depleted Central Bank reserves are a sore point with the IMF. While exports are reduced by closure of the US market, many of the 185 countries thus blocked might increasingly start seeing an Argentina opening up to free trade as an attractive destination for their goods, thus accelerating soaring imports – early projections show last year’s bumper trade surplus of US$18 billion being halved this year but the fall could be even steeper than that. Argentina may not be immune from a mood of retaliatory protectionism in the rest of the world – Milei’s doctrinal devotion to the free market and his friendship with Trump are unlikely to lead him down that road but many voters might respond otherwise to the message pushed by some opposition sectors and the vested interests of protectionism in an election year.
Voter response is likewise a factor when weighing Milei´s bold Malvinas statements on the 43rd anniversary of the outbreak of the South Atlantic war. What Milei was trying to say in his convoluted way was that Argentina can win, regardless of whether the criterion is territorial sovereignty claims or the British argument of self-determination – the territorial argument has never been in dispute while the islanders could be induced to enter Argentina voluntarily if it could be transformed into a dynamic country attractive to them (use of the word “power” was misplaced here). But how many people are going to understand all that when it is so easy to dismiss the speech as a sell-out to the British stance? In this sense, an estranged Vice-President Victoria Villarruel may have been doing the President a favour with her stridently nationalistic speech down in Tierra del Fuego to cover the bets.
Liberation Day and Veteran’s Day here could potentially rewrite decades of history in the world and the South Atlantic but much remains to be seen.
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