Argentina Opened Its Doors. Why Is Brazil the One Losing?

Argentina and Brazil share a border, a customs union, and what is close to one car industry split across two countries. For years, Brazil was the first name on Argentina's list of suppliers, the default answer. Then Argentina started opening its economy, and something odd showed up in the customs declarations. From January to September 2026, China sold Argentina more than Brazil did in seven of the nine months, against three of nine in the same months of 2025. You might expect that to be a story about China selling a lot more. It is not. China barely grew. So where did Brazil go?

The scoreboard flipped, but only one side moved

Start with the totals. From January to September 2026, Argentina imported US$11.81 billion of goods from China, up 1.3% from US$11.65 billion a year earlier. That is basically flat. Over the same nine months, imports from Brazil fell 20.2%, or US$2.50 billion, to US$9.89 billion. China's share of Argentina's imports rose from 25.0% to 27.1%; Brazil's fell from 26.6% to 22.7%. September followed the same pattern: US$1.60 billion from China, little changed from a year earlier, and US$1.16 billion from Brazil, down 21.1%.

Put the two lines on one chart and you can see the crossing: Brazil ran ahead every month from March to August 2025, then China led in seven of the nine months of 2026 while its own line stayed roughly where it was.

This is not just our reading of the declarations. When INDEC published the official September figures on 19 October 2026, imports from China were US$1,817 million, unchanged from a year earlier, and imports from Brazil were US$1,375 million, down 19.2% (Los Andes). INDEC counts CIF values across all regimes, so its totals are higher than our FOB series, but the direction is the same. Bloomberg's Jonathan Gilbert put it plainly in a piece republished by the Buenos Aires Times: China has passed Brazil as the top supplier to Milei's economy this year (Buenos Aires Times).

Follow the car carriers

So what did Argentina stop buying from Brazil? The answer is mostly one thing: vehicles. Imports of vehicles and parts from Brazil fell 33.5%, from US$5.82 billion to US$3.87 billion, about 78% of Brazil's whole decline. Passenger cars fell US$913 million, tractors US$416 million, trucks and pickups US$268 million, and vehicle parts US$184 million.

Now flip to the cars themselves. Brazilian passenger cars fell 29.9%, from US$3.05 billion in January to September 2025 to US$2.14 billion in 2026. Chinese passenger cars went the other way, from US$287.9 million to US$913.1 million, more than three times the 2025 level. Brazil is still the bigger car supplier by a wide margin, but the gap closed fast.

Brazil's own carmakers saw the same thing from the other side of the border. Brazilian vehicle shipments to Argentina fell 35.4% in the first half of 2026, to 106,000 units, and Anfavea's figures show Brazil's share of the cars Argentina imports dropping from 82% to 56% in a year (Jornal de Brasília). On the Chinese side, auto exports to Argentina rose 147% in the first five months of 2026 (Yicai).

Two forces seem to be at work, and they are not the same force. The first is a smaller market. Argentina registered 435,493 new vehicles from January to September 2026, 13% fewer than a year earlier, according to ACARA figures reported by El Economista. When the whole market shrinks, the supplier that sells the most cars loses the most dollars. That supplier is Brazil.

The hybrid lane

The second force is policy. Under Decree 49/2025, Argentina lets up to 50,000 hybrid and electric vehicles a year in without the 35% tariff that applies to cars from outside Mercosur, as the trade site eletric-vehicles.com reports. Until the end of September, only cars up to US$16,000 FOB qualified (DolarHoy). Bloomberg's reading is that this low price ceiling effectively gave Chinese automakers an inside lane (Buenos Aires Times).

The declarations fit that story. Hybrid and electric cars made up US$735.8 million, or 80.6%, of Chinese passenger car imports from January to September 2026, up from US$78.1 million a year earlier. The rest of China's cars, conventional models, actually fell, from US$209.9 million to US$177.3 million.

The twist: the tariff that did not disappear

Here is where I expected an easy ending: Chinese hybrids pour in tariff-free, story over. The declarations do not say that. Duties recorded on Chinese passenger cars equal about 37.8% of their FOB value in 2026, while Brazilian cars, under Mercosur, show 0.0%.

My read, and it is an interpretation, not a fact in the data: the quota covers only part of the flow. Declared units of Chinese cars rose from 25,407 to 65,024 in January to September 2026. The quota is 50,000 vehicles a year for all brands, and by 30 September only 68,792 of the 100,000 vehicles assigned across the 2025 and 2026 quotas had entered the country (eletric-vehicles.com). Even a fully used quota could not cover 65,024 Chinese cars in nine months plus the other brands that use it, and cars above the price cap never qualified. So many Chinese cars, hybrids included, are probably paying the full 35% tariff, which is assessed on a CIF base and so can show up above 35% of FOB. The quota helped open the door; it does not look like it carried most of the volume. The declarations alone cannot prove which cars used it, so treat this as a hypothesis to test, not a finding.

Trade with the U.S.

Argentina's relationship with the United States runs in two views, and they tell different stories.

Argentina's own customs data shows imports from the U.S. of US$493.5 million in September 2026, up 3.9% from US$475.1 million a year earlier, and 8.9% of all imports. Official U.S. Census data, which runs a month behind, shows U.S. exports to Argentina of US$823.5 million in August 2026, down 2.6% from US$845.4 million, while U.S. imports from Argentina rose 29.6% to US$981.6 million. The mirror figures do not match, and they are not expected to: shipment and arrival dates differ, valuation differs, and some goods are routed through third countries.

The bigger change is Argentina selling to the U.S. From January to August 2026, U.S. imports from Argentina reached US$6.51 billion, up 31.0% from US$4.97 billion, led by crude oil, gold, and frozen beef. Frozen beef rose from US$14.2 million in August 2025 to US$67.1 million in August 2026, after a presidential proclamation allowed up to 80,000 tonnes of Argentine beef in 2026 (U.S. Cattlemen's Association). The February trade agreement also removed U.S. reciprocal tariffs on 1,675 Argentine products (El Economista). INDEC's September release points the same way from the Argentine side: exports to the U.S. rose 38.9% and Argentina ran a US$379 million surplus with the U.S. (Los Andes).

Two more things in the manifests

The southern winter cost more than last year. Natural gas and LPG imports fell from US$231.8 million in August to US$30.3 million in September as the LNG season ended, but the season itself was pricier: LNG declared by sea from March to August 2026 was worth US$814.3 million, up 44.5%, for 2.7% less volume. That is a price story.

Pipeline gas from Bolivia also rose, to US$180.2 million in January to September 2026 from US$75.9 million a year earlier. Part of the reason is timing: private buyers began importing Bolivian gas for northern power plants in June 2025 (EconoJournal), while in 2026, after small flows in January and March, imports resumed in April, before winter, because the pipeline from Vaca Muerta to the north cannot carry enough at peak demand (Río Negro).

And medicines keep climbing. Pharmaceutical imports reached US$354.3 million in September, the highest month since January 2025 (the start of our data), and rose 23.6% to US$2.74 billion over nine months. The industry sees it too: CILFA, using INDEC data, counted August medicine imports up 22.2% and described imports rising faster than exports, widening the sector's deficit (Infobae). Nobody we found explains why, so neither will I.

So why is Brazil losing?

Mostly because Argentina is buying fewer cars, and Brazil is the country that sells it the most cars. China did not have to grow much; it held steady while Brazil fell, and its hybrids filled part of the gap. The policy helped China get in the door. The duties suggest the market, not the quota, did most of the work.

What to watch

• October 2026 declarations (due in our data in mid-November): whether pricier electric models appear after Decree 1128/2026 raised the tariff-free cap to US$35,000 for electric cars and US$18,000 for hybrids from 30 September (eletric-vehicles.com).
• The 2027 quota tender, which was due to open in early October 2026: how many units go to importers of Chinese brands.
• INDEC's October trade release in November 2026: whether imports from Brazil stay about 20% below 2025.
• Medicines: whether pharmaceutical imports hold above US$300 million in October.
• U.S. Census September data: whether U.S. beef imports from Argentina keep pace as the quarterly tranches are used.

Sources

Every link on this page passed the verification gate (live article, date in window, quote found, archived). Tier 1: Bloomberg, WSJ, Reuters, FT. Tier 2: other highly relevant sources (trade press, government, company releases, local press).

Tier 1

No Tier 1 source on this page.

Tier 2

• Tier 2 Los Andes. Argentina logró una balanza comercial de casi US$3.000 millones en septiembre, pese al déficit con China. 2026-10-19 archive
• Tier 2 Buenos Aires Times. Chinese EVs are everywhere in Argentina despite Milei’s MAGA ties. 2026-08-03 archive
• Tier 2 Jornal de Brasília. Produto brasileiro sente ‘efeito Milei’ e perde liderança para a China na Argentina. 2026-07-22 archive
• Tier 2 Yicaichina. China's Car Exports to Argentina More Than Double in First Five Months of 2026. 2026-07-17 archive
• Tier 2 El Economista. En septiembre crecieron los patentamientos pero acumulan una caída de 13%. 2026-09-30 archive
• Tier 2 eletric-vehicles.com. Chinese Carmakers Reach About 12% of Argentina Sales as EV Import Cap Rises. 2026-10-07 archive
• Tier 2 Dolarhoy.com. Ventas de autos híbridos y eléctricos aumentaron un 339% en Argentina en el primer semestre de 2026. 2026-07-29 archive
• Tier 2 US Cattlemen's Association. USCA Responds to Announcement of 2026 U.S.–Argentina Beef Trade Agreement. 2026-02-06 archive
• Tier 2 El Economista. Acuerdo con EE.UU.: Argentina exportará más carne y caen 1.600 aranceles. 2026-02-05 archive
• Tier 2 EconoJournal. Apertura del mercado de combustibles: empresas privadas empiezan a importar gas desde Bolivia para cubrir la demanda de generadoras eléctricas en el norte argentino. 2025-06-18 archive
• Tier 2 Diario Río Negro. Todavía no comenzó el invierno y Argentina ya retomó la importación de gas desde Bolivia. 2026-04-23 archive
• Tier 2 Infobae. Las exportaciones de medicamentos crecieron 21,8% en agosto y alcanzaron un récord anualizado. 2026-09-25 archive