On Thursday, Argentina established a trade agreement with the United States, which, while authorized by Mercosur with specified limits, is expected to affect the South American bloc under the leadership of President Javier Milei. Since Donald Trump took office in January 2025, Argentina's alignment with Washington has become evident, with Milei's shift towards a reduced Mercosur structure focusing on a free trade area failing to make significant progress.

Milei's administration recently secured a notable trade and currency swap deal worth $20 billion from the U.S. Treasury just before Argentina's legislative elections, in which the ruling party emerged victorious. The timing and facilitation of this agreement highlight the deepening ties between Argentina and the U.S., suggesting a strategic partnership that could lead to further economic support at crucial political junctures.

In the broader context, this agreement raises questions about the future of Mercosur as Argentina’s economic policies pivot closer to U.S. interests. The potential ramifications for trade within the region and the cohesion of Mercosur are significant, as this move might set a precedent for other member countries and alter the dynamics of South American commerce.