The US could displace Argentina from one of its main export markets.

The United States has taken a major step toward reducing its bloated trade deficit with Vietnam. it has done so through a trade offensive that, while not directed against Argentina, is indirectly harming it.

The signing of memoranda of understanding (MOUs) by American companies to EXPORT their goods to this Asian country threatens the positions of domestic exporters, who consider Vietnam one of the main buyers of corn and soybean meal.

The news was confirmed this week by the Vietnamese Ministry of Agriculture, which reported that an official delegation visited Iowa and other Midwestern states to close preliminary agreements worth up to $2 billion for the purchase of wheat, corn, DDG (an ethanol byproduct used in animal feed), and soybean meal. In Iowa alone, companies covered by the memorandums of understanding expect to generate $800 million in sales over five years.

While these agreements are not binding, they represent a strong political and commercial gesture and fit into the context of broader bilateral negotiations, providing a starting point for direct competition with Argentina in a key overseas market.

Key market under threat

According to a report from the Rosario Stock Exchange (BCR), Argentina is by far the main supplier of corn and soybean meal to Vietnam. Over the past five years (2019-2023), more than 50% of the corn and 65% of the soybean meal imported by the country came from Argentina. Meanwhile, over the same period, Vietnam accounted for an average of 17% of the dollars earned from Argentine corn exports and 15% of the dollars earned from soybean meal.

Argentina is the main supplier of corn and soybean meal to Vietnam, with a share of over 50% and 65% respectively (Shutterstock)

Combined, sales of both products in Vietnam have averaged US$2.67 billion over the past five years, cementing its position as the largest single destination for these agro-industrial commodities.

The potential emergence of the United States as a direct supplier in this market poses a specific risk to these relations. Although the current US share of Vietnam's corn and soybean meal imports does not exceed 5%, the momentum of the agreements could change this balance in the short term, especially if a bilateral trade agreement materializes.

Business accounts

The US goods trade deficit with Vietnam reached $123.5 billion in 2024 , an 18.1% increase from the previous year, according to official data. Therefore, the Trump administration pressured several Southeast Asian countries, including Vietnam, with reciprocal tariffs to force them to initiate trade negotiations. Although these measures have been temporarily suspended, they still pose a threat.

Vietnam, for its part, has incentives to avoid these tariffs. Its economy is heavily export- oriented , and the United States is its primary trading partner: in 2024, 28% of its overseas sales will go to the US market, significantly higher than its second-largest destination,   CHINA   (20%). One in four containers leaving Vietnam's port is destined for the United States (Shutterstock)

The memorandums signed with American companies are a clear gesture of goodwill on the part of Vietnam, part of a broader strategy to maintain its export model and avoid retaliatory trade measures.

Argentina is in alarm

For Argentina, this move could have negative consequences at a sensitive time for foreign exchange generation. The potential loss of market share in its primary agricultural market would not only impact the export sector but could also reduce DOLLAR flows amid high external revenue needs.

"Vietnam's interest in reaching an agreement, like other Asian countries, and the United States' desire to expand its agricultural exports as a demonstration of support for its primary sector are creating a new competitive environment," the BCR report warns. Southeast Asian countries are the main destinations for Argentine agricultural exports.

The authors add that pressure from Midwestern agricultural states on US trade policy also plays a key role: having played a major role in Trump's victory, these sectors expect the government to take concrete measures to address their stagnant international sales.

Furthermore, other Asian markets where Argentina also has a strong presence, such as Malaysia, Indonesia, and South Korea  , have begun exploring similar avenues. All three countries suffered tariffs similar to those imposed on Vietnam during the Trump presidency and have also begun negotiations to expand their purchases from the United States.