China, Mexico and Canada were high on Trump’s hit list, and while these governments have managed to extract favourable trade treaties with Washington, tariffs are still very much in place. Therefore, countries have no other option but to reduce their dependence on trade with the US.
Since Trump took over the White House in 2024, the global economy has hardly been predictable. Building his election campaign on introducing the infamous ‘Trump Tariffs,’ the US President has set off a chain reaction of protectionist policies around the world. While most countries have successfully used bilateral diplomacy to get tariffs reduced or waived, the damage was already done.
China, Mexico and Canada were high on Trump’s hit list, and while these governments have managed to extract favourable trade treaties with Washington, tariffs are still very much in place. Therefore, countries have no other option but to reduce their dependence on trade with the US.
Mexico has signed the Modernised Global Agreement (MGA) and interim Trade Agreement (ITA) with the EU to strengthen political dialogue and cooperation. Trade between the two parties currently totals €100 billion ($117 billion) annually. This new deal has been hailed as a positive step for the Mexican industrial and manufacturing sectors, because it offers broader trade access and diversification options which are beneficial for long-term industrial growth.
Since January, Mexico has sent 451.55 tons of steel to the EU, which has also received 379.23 tons of oil country tubular products (OCTG) from the country. In 2026, Mexican exporters had already sent 160,000 tons to the US.
In the meantime, Mexico has imported 95,200 tons of steel from the EU, primarily galvanised sheet and cold-rolled coil. It has, however, imported more than three times as much from the US in the same period. Analysts have suggested that stronger trade linkages and more commercial opportunities outside of North America can help the Mexican steel industry, especially in times of market turbulence or trade conflicts.
The country’s steel market has been facing volatility and uncertainty since Trump reimplemented tariffs on steel last year. Outbound shipments from Mexico are currently subject to a 50% levy on steel and a 25% levy on automobiles and auto parts. With the reintroduction of Trump tariffs, Mexican exports to the US, its largest trading partner, have significantly dropped. Despite the drop in numbers, Mexican producers are assured that Washington will remain its most important steel and manufacturing partner due to the highly integrated supply chains between both countries.
Steel is not the only sector undergoing a transformation in Mexico. The dairy sector is also being targeted to become self-reliant. The government is looking to boost dairy production, strengthen the value chain, and move the country closer to self-sufficiency by 2030. Mexico currently produces 13.8 billion litres of milk, meeting 70% of its domestic demand. However, the government aims to increase production to 15 billion litres annually.
To meet this target, plans are already in motion. For example, the construction of new dairy developments in Campeche will increase milk production. In May, Mexico’s president inaugurated the new Milk for Well-Being Pasteurisation plant, which was built with an investment of MX$130 million. This project represents the strengthening of agri-food development across the country’s southern and southeastern regions.
In addition to offering the highest purchase price of MX$11.5/L in Mexico, this program will provide small-scale producers with technical assistance, pasture improvement programs, and strategic infrastructure investments. Industry observers have noted that Mexico’s dairy sector is strategic to economic expansion, as it generates 600,000 direct and 1 million indirect jobs. These opportunities are particularly important for rural communities where dairy farming serves as a source of economic stability, local development, and social well-being.
Mexico is not the only country reporting favourable trade figures in Latin America. Brazil also reported a $5.7 billion trade surplus in May. Exports totalled $23.5 billion, while imports stood at $ 17.8 billion. Rio’s trade to the US alone was $41.3 billion for the fifth month.
Comparing the cumulative daily average up to the third week of May 2026 with the same period last year, agriculture and livestock reported the largest jump this month, with an 18.5% increase, reaching $65.17 million. With a 15.4% rise, the manufacturing sector was a close second, bringing in $111.89 million in exports.
Brazil is also about to end the first half of 2026 by securing a deal with China after over 20 years of negotiations. The Chinese government will now recognise all Brazilian states under the same sanitary status, eliminating previous barriers which had limited exports from certain regions for decades. Brazil’s agribusiness sector is welcoming this move with open arms, as it opens up access to its most valuable export market and also reinforces global confidence in its animal health system, livestock traceability programs, and sanitary controls.
While Brazil is one of the world’s leading exporters of beef and chicken across Asia, the Middle East and Europe, China’s market size cannot be underestimated. Both countries are agricultural export giants, and trade data shows that last year over half of Brazil’s beef exports were shipped to China.
In Q1 of 2026, China’s Brazilian meat imports totalled roughly $3 billion. With this new easing of regulations, previously restricted food products like Bone-in beef and pork products will soon enter the Chinese market. This new move also implies intensified competition from other major exporters like the US, Australia and another important LatAm country- Argentina.
While this relaxation of rules from China is yet to come into effect, it appears one of Brazil’s rivals, Argentina, is already seeing crunching export numbers. In April, beef exports fell sharply in volume compared with March. Reports suggest that 46,100 tonnes of chilled and frozen beef were shipped last month, generating $321.3 million in revenue.
This is a 26.5% fall in volume and 24.6% in value, compared to the March figures. There is also a year-on-year decline, as the April 2025 numbers suggest that export volumes fell 13%. While exports have fallen, prices continue to rise. The average price of Argentine beef exports reached $6,968 per tonne in April 2026, a 37.7% rise from the same period last year and a 2.5% climb from March 2026.
While the world is moving towards protectionist policies in this era of uncertain economic ties, Argentina has decided to gradually lower its export taxes for certain industrial sectors to zero in the 12 months starting this July. Taxes on exports of automotive, pharmaceutical, and chemical products, which are currently 4.5%, will be reduced by 0.375 percentage points each month. The country’s economic ministry also announced that taxes on agricultural products will also be gradually phased out.
Automobile exports from the country were down 2.5% this year compared to last, comprising a mere 10% of all exports at $8.78 billion. The combined oil and petrochemical sectors exported $11.77 billion worth of products, recording a 12.8% rise compared to 2025 and representing 13.5% of exports so far this year.
Latin American economies have been compelled to shift away from reliance on Washington and toward strategic global diversification as a result of the reinstatement of severe US tariffs. By investing in domestic dairy self-sufficiency and fortifying links with the EU, Mexico is effectively reducing supply chain instability. Brazil has made a significant breakthrough with China to preserve its dominance in the agriculture sector while competitors in the region, including Argentina, struggle with variations in exports and are gradually removing their own trade barriers.
In the end, Washington’s protectionist policies have backfired, hastening a significant geopolitical change in which LatAm countries are effectively creating more robust and resilient trade partnerships outside of North America.
