Opportunities for Mercosur? What does the Brazil-US alliance leave behind?

In a key week for international MEAT trade, Argentine trader Fausto Brighenti welcomed President Javier Milei's announcement to reduce beef EXPORT duties  , while noting that the ultimate goal should remain the complete abolition of the tax. "This is a very welcome measure in the context of a favorable period for livestock production in Argentina. It's a very positive gesture for the entire chain," he said on the radio station Valor Agregado, broadcast on the Carve channel.

The president's announcement at Expo Palermo 2025 confirmed a reduction in the export tax from 6.75% to 5%. This figure, while lower than expected, is still a relief. "We expected a zero rate, but this 1.75% should be included in the export price of steers. That is, about 100 Argentine pesos per kilogram, which will increase competitiveness," Brighenti explained.

As he explained, this change means a 26% increase in the export sector's competitiveness. "We're heading in the right direction. The government is controlling the pace, but the message is clear: the intention is to benefit the sector. Now we must ensure that the law becomes law, and that no official can change these rights without Congressional approval," he emphasized.

Tensions between Brazil and the United States

Alongside the domestic situation, the attention of international trade is focused on the looming tariff conflict between Brazil and   the United States  . A few days before August 1, an additional 50% tariff could be applied to Brazilian out-of-quota exports, bringing the tax rate to 86.4%. "There's a lot of noise in the market. CHINA has slowed its growth, the United States is biding its time, and if the volumes the United States currently imports from Brazil are freed up, China could absorb them, but at the cost of lower prices," he warned.

Brighenti recalled that Brazil exported approximately 250,000 tons of beef to the US in 2024. If Brazil had not exported, these volumes could have significantly impacted global prices . " Brazil has significant export potential and is very diversified: China, Japan , Indonesia, the Philippines, and Southeast Asia in general. it will export this beef, but this could impact prices," he explained.

Added to this are expectations surrounding China's decision on a "protective quota"—a possible global quota that, if implemented, would ensure a first-come, first-served basis. "If China introduces a 'first-come, first-served' quota, Brazil could quickly fill it, displacing other players," he stated.

An opportunity for Mercosur?

If Brazil loses competitiveness in the US market, a window of opportunity could open for Argentina, Uruguay, and Paraguay. "The US needs to import meat for hamburger production, and the quota expansion Argentina is negotiating could cover some of this demand. Any product that Uruguay or Paraguay can sell will be gratefully received," he emphasized.

However, Brighenti warned of the "short-list effect": "What Brazil doesn't sell in the US, it will sell elsewhere. If it floods China and prices fall, the improvement in one market could be offset in another. For example, in Argentina, China carries more weight than the US."

Another key aspect of the medium-term outlook will be the signing of a protocol on offal exports from Argentina to China, scheduled for the second half of the year. "This will create enormous competition. The US is one of the main suppliers of offal to China, and if we don't participate in this process, another excellent opportunity will open up for us," he stated.

Despite the volatile and geopolitically uncertain environment, Briguente stated that 2025 will be a favorable year for the livestock and meat industries. "Demand exceeds supply, and this is reflected in high prices. We must be mindful of the opportunities created by these global changes and know how to take advantage of them," he concluded.