Argentine President Javier Milei has expressed intentions to negotiate a trade deal with the United States that could eliminate tariffs on certain exports, aligning with his libertarian free-market policies and his ideological affinity with U.S. President Donald Trump. Reports suggest that discussions have focused on achieving a zero-tariff framework for 50 Argentine export products, aiming to enhance bilateral trade. Currently, the U.S. has imposed a baseline 10% tariff on Argentine goods as part of a broader reciprocal tariff policy announced by Trump, effective April 5, 2025, with higher rates applied to other countries.

Argentina’s government views its placement in the minimum tariff bracket as a diplomatic success and is leveraging this position to push for an exemption or a full zero-tariff deal. Milei has highlighted progress in resolving trade barriers, with negotiations reportedly addressing regulatory adjustments to meet U.S. reciprocity demands. While no official agreement has been signed yet, the groundwork is being laid through high-level meetings, such as those between Argentine Foreign Minister Gerardo Wertheim and U.S. Secretary of State Marco Rubio, as well as Milei’s planned discussions with Trump.

Eliminating tariffs on key Argentine products—potentially including agricultural goods like beef, soybeans, and wine, or industrial items—would make them more competitive in the U.S. market. This could increase export revenues, critical for Argentina’s economy, which has been grappling with high inflation and foreign currency shortages. American consumers might see lower prices for Argentine imports, particularly in food and raw materials, enhancing purchasing power and diversifying supply chains away from other global suppliers.

A trade deal could encourage U.S. companies to invest in Argentina, drawn by cheaper access to the U.S. market and Milei’s pro-business reforms (e.g., deregulation, tax cuts). This could spur job creation and economic growth in Argentina. Argentina might reduce its trade deficit with the U.S. if exports surge, though this depends on whether the U.S. also gains tariff-free access to Argentina, potentially increasing American exports like machinery or tech goods. A zero-tariff deal would signal a deepening alliance between Milei and Trump, rooted in shared ideological principles like free-market capitalism and anti-socialism. This could elevate Argentina’s geopolitical standing as a favored U.S. partner in

For Milei, securing this deal would bolster his domestic credibility, proving his unconventional approach delivers results. For Trump, it could showcase his “America First” policy adapting to strategic partnerships, countering criticism of isolationism. Argentina’s pursuit of a bilateral deal risks straining relations with Mercosur partners (Brazil, Paraguay, Uruguay), who may see it as a violation of the bloc’s common external tariff rules. This could lead to diplomatic friction or even Argentina’s exit from Mercosur, a move Milei has hinted at favoring. A U.S.-Argentina deal might pressure other Latin American countries to seek similar arrangements, potentially reshaping regional trade patterns. Brazil, a Mercosur heavyweight, could view this as a competitive threat, prompting counter-negotiations.

Argentina’s pivot toward the U.S. could weaken China’s economic foothold in the region, where Beijing has been a major buyer of Argentine commodities and an investor in infrastructure. This aligns with U.S. efforts to counter Chinese dominance in the Global South. If successful, this could inspire Trump to pursue zero-tariff deals with other ideologically aligned nations, shifting U.S. trade policy from broad tariffs to selective partnerships. However, it might also provoke retaliatory tariffs from excluded countries.

Risks and Uncertainties

Regulatory alignment, U.S. Congressional approval (if required), and Mercosur’s response could delay or derail the deal. Argentina’s economic instability might also undermine its capacity to sustain increased trade. If the deal heavily favors U.S. exports or specific Argentine sectors (e.g., agribusiness), it could exacerbate inequality within Argentina or strain U.S. domestic industries facing cheaper imports. The agreement’s longevity could hinge on Milei and Trump remaining in power, as successors might not prioritize or honor it. A zero-tariff pact could turbocharge Argentina’s economy and cement a strategic U.S. partnership, but it risks regional backlash and depends on navigating complex trade-offs.

If successful, this could mark a significant shift in trade relations, potentially making Argentina the first country to secure a zero-tariff arrangement with the U.S. under Trump’s administration. However, challenges remain, including Argentina’s obligations under Mercosur, which restricts individual members from negotiating bilateral free trade agreements outside the bloc. For now, the zero-tariff goal remains aspirational pending formal ratification and resolution of these regional constraints.

Nigerian Naira again: “The Central Bank of Nigeria (CBN) on Friday injected $197.71 million into the foreign exchange (FX) market in a bid to restore calm as the naira crashed to N1,600 per dollar—its weakest official exchange rate since December—under growing pressure from global economic shocks, including a 14% import tariff recently imposed on Nigeria by the United States.”

Ideally, Nigeria should not inject funds to stabilize Naira since it is floated. A floating regime will require the market forces to do the job.  That we are still injecting funds after two years does imply Naira cannot swim in a sea of global currencies when floated. Simply, Naira does not have the productive life jackets to float!

Mr. Governor, save Naira: peg it to N1,200/$ and allow it be. I have an Excel sheet where I’ve tracked the gains and losses as a result of the float. My data showed me that Naira is still being subsidized, not by the government, but by the private sector. That subsidization by the private sector is costing the government massive revenue. So, companies like MTN which used to send tons of money as tax have nothing to send.

My data shows that the opportunity cost (revenue, investment, asset value, etc) and the extra borrowing associated due to the loss of revenue from the private sector is close to the amount the government was originally spending on the Naira subsidy before the float. By the time I modeled asymmetric impacts like loss of venture funding for startups which was triggered by the floating, it becomes a negative policy on national economic competitiveness and growth.

I am an investor and I speak with dozens of global investors yearly. The #1 Naira problem is the volatility and not necessarily the exchange rate. But since we are still injecting funds to stabilize Naira because the US sneezed tariffs, why not just peg it? Mr. President is rational as an accountant, and will see this from the numbers. As always, my highest respect and I close from my June 2023 post: ‘Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted.” This injection of funds means the system is still unstable after 2 years.

CBN Injects $197.71m to Stabilize FX Market as Naira Falls to N1,600/$ Under Pressure From Trump’s 14% Tariff on Nigeria

The Central Bank of Nigeria (CBN) on Friday, injected $197.71 million into the foreign exchange (FX) market in a bid to restore calm as the naira crashed to N1,600 per dollar—its weakest official exchange rate since December—under growing pressure from global economic shocks, including a 14% import tariff recently imposed on Nigeria by the United States.

The intervention, confirmed in a statement released Saturday by Dr. Omolara Omotunde Duke, Director of the Financial Markets Department, marks one of the most direct responses by the apex bank to the turmoil triggered by the U.S. government’s sudden hike in tariffs on a wide range of imports, including goods originating from Nigeria.

“In line with its commitment to ensuring adequate liquidity and supporting orderly market functioning, the CBN facilitated market activity…with the provision of $197.71 million through sales to Authorized Dealers,” the statement read.

The Bank said the move aligns with its broader objective of fostering a stable, transparent, and efficient foreign exchange market and reiterated its resolve to maintain market integrity amid rising volatility.

Trump’s Tariff Hitting Nigeria?

But beyond the routine policy language lies a deeper concern: the naira’s sharp depreciation is being increasingly tied to Trump’s decision to impose new tariffs on several countries—including Nigeria—as part of a broader trade overhaul that is beginning to reverberate across global markets.

According to economists, the U.S. president’s announcement of a sweeping 10% baseline tariff on most imports, and a separate 14% tariff on certain products from Nigeria, has directly contributed to the decline of the naira. The impact has been swift. Nigeria, which depends heavily on oil exports and dollar remittances, now finds itself squeezed between falling crude prices and rising trade barriers.

Analysts say Nigeria is particularly vulnerable to external shocks due to its over-reliance on imports and its narrow export base. With U.S. tariffs raising costs for Nigerian goods abroad—and reducing Nigeria’s competitiveness—dollar inflows are expected to decline further. That, in turn, has made it harder for the CBN to defend the naira without depleting its already strained reserves.

Naira Drops to N1,600/$1—Worst Since December

Data from the CBN shows that the naira ended Friday at N1,600 per dollar, down 1.9% from N1,569 recorded the previous day. It marks the weakest official exchange rate since December 4, 2024, when the currency closed at N1,608.

Intra-day trades suggest even wider instability. The naira briefly touched a high of N1,625 before retreating, while some trades settled as low as N1,519—highlighting a broad range of uncertainty in dealer pricing. The Nigerian Foreign Exchange Market (NFEM) average rate, which smoothens out day-to-day spikes, closed at N1,567—the softest level so far in 2025.

In just the first four trading days of April, the naira has already lost 3.9% of its value, after closing March at N1,537.

The market’s volatility has renewed questions about the effectiveness of Nigeria’s FX reform strategy, which had aimed to allow the naira to float more freely in line with market demand and supply dynamics. Economists believe that without buffers, such a system leaves the currency dangerously exposed to external headwinds.

Economists Call for Urgent Action

The dramatic weakening of the naira has prompted fresh warnings from economists who say Nigeria must urgently revise its economic playbook in light of the new global realities. Several experts have urged the government to immediately set up a high-level response team focused on mitigating the effects of Trump’s trade policies on Nigeria’s already fragile economy.

There is growing support for a mix of policy responses. Economists have urged the federal government to fast-track export diversification, especially in non-oil sectors like agro-processing, solid minerals, and services. They are also advocating for Nigeria to begin exploring bilateral trade talks with the U.S. to negotiate relief or possible exemptions from the newly introduced tariffs.

In addition, some have suggested rebuilding foreign exchange buffers through diaspora bonds and concessional loans to strengthen Nigeria’s short-term liquidity. There are also calls for a reassessment of the 2025 budget assumptions, particularly around oil benchmarks and projected dollar inflows, which may no longer be realistic given recent developments.

Another line of thought is for the CBN to offer more structured FX support to key import-dependent sectors of the economy to avoid further supply chain disruptions that could fuel inflation. In parallel, there is also mounting pressure for the CBN to step up transparency around its FX intervention strategy, with clear and predictable signals to prevent panic in the financial markets.

While the CBN has not committed to a daily defense of the naira, the tone of its latest statement suggests it is prepared to act again should market conditions worsen. Dr. Duke noted that the Bank would continue to closely monitor both global and domestic financial conditions and stands ready to intervene further as necessary to maintain market order.

The CBN also called on all authorized dealers to uphold the Nigeria FX Market Code, urging strict compliance and high ethical standards in all transactions with clients and counterparties.

JPMorgan has become the first major Wall Street institution to formally project that the United States will fall into a recession in the latter half of 2025, citing the economic damage from sweeping tariffs imposed by President Donald Trump.

The bank’s chief US economist, Michael Feroli, warned in a note to clients that the cumulative weight of these tariffs — especially the 10% duties Trump has slapped on imports from most US trading partners — will begin to contract economic growth, pushing the country into what Feroli describes as a “stagflationary” scenario.

In his latest forecast, Feroli projects the US economy will shrink by 1% in the third quarter of 2025, followed by a further 0.5% contraction in the final quarter of the year. For the full year, GDP is expected to fall by 0.3%. The downturn, he said, would push the unemployment rate to 5.3%, up from the 4.2% recorded in March.

“We now expect real GDP to contract under the weight of the tariffs,” Feroli wrote Friday evening. “The pinch from higher prices that we expect in coming months may hit harder than in the post-pandemic inflation spike, as nominal income growth has been moderating recently, as opposed to accelerating in the earlier episode.”

The stark prediction is already being felt across financial markets. The Dow Jones Industrial Average plunged nearly 3,300 points over the week, an 8% decline that dragged the index into correction territory. The S&P 500 lost 9%, while the Nasdaq Composite fell 10%, pushing it officially into bear market territory — down more than 20% from its previous peak.

Feroli said the tariffs will increase consumer prices, depress household spending, and weigh heavily on business investment. While Trump insists the import taxes will help fund his planned extension of the 2017 tax cuts and bring back domestic manufacturing jobs, economists argue they’re already fueling inflation at a time when consumer spending is vulnerable.

“Consumers may be reluctant to dip too far into savings to finance spending growth,” Feroli warned, noting the fragile state of household balance sheets in a high-interest rate environment.

The White House, however, remains unshaken. Trump has continued to champion his economic strategy as a long-term fix to decades of trade imbalances, claiming that the pain Americans are experiencing now will eventually pay off. Speaking Thursday as markets were in freefall, Trump dismissed the economic concerns, saying the country would “boom.” The next day, he hit the golf course, as the Dow suffered its worst one-day drop since March 2020 — falling by 2,200 points.

Trump’s tariff plan is viewed by many Republicans as one of the boldest gambits of his presidency. After feeling constrained by advisers in his first term, Trump has now leaned fully into his long-held protectionist beliefs. The latest round of tariffs spares almost no major trade partner, including Canada, Mexico, the European Union, and China. That has prompted swift retaliation from Beijing and sharp criticism from European capitals, where leaders are preparing their own countermeasures.

Despite the financial turmoil, Trump has shown no signs of reversing course — at least for now. He has framed the tariffs as a patriotic obligation and a path to restoring American greatness.

“We have to endure a little pain to win back our economic independence,” he said in an address earlier this week.

That defiance, however, is beginning to stir unease — even among some of Trump’s supporters and Republican lawmakers.

Rep. French Hill, a Republican from Arkansas, voiced his reservations during a town hall Thursday night, particularly about the broad application of tariffs on neighbors like Canada and Mexico.

“I don’t support across-the-board tariffs as a general matter,” Hill said. “And I will be urging changes there because I don’t think they will end up raising a bunch of revenue that’s been asserted.”

But others remain supportive, even if uneasily so. Frank Amoroso, a 78-year-old retired engineer from Michigan who voted for Trump, told AP the tariffs are a step in the right direction — though he’s worried about short-term pain. “I think he’s doing things too fast,” he said. “But hopefully things will get done in a prudent way, and the economy will survive a little downfall.”

Doug Deason, a Republican donor based in Texas, echoed the sentiment. “It is hard to watch our portfolios deteriorate so much, but we get it. We hope he holds course,” he said, noting that Trump had always warned that economic disruptions would accompany his trade policies.

The broader economic implications are still unfolding, but JPMorgan’s projection has amplified fears that the president’s tariffs — far from being a tool of leverage — are pushing the US into the early stages of stagflation: a toxic mix of stagnant growth and rising prices. Feroli’s team expects the Fed’s preferred inflation measure — the core Personal Consumption Expenditures (PCE) index — to rise to 4.4% by the end of 2025, up from 2.8% in February.

That would complicate the Federal Reserve’s response. While investors had previously priced in four rate cuts by the Fed this year, Feroli now warns that the central bank may be paralyzed by the conflict between rising unemployment and stubborn inflation.

“If realized, our stagflationary forecast would present a dilemma to Fed policymakers,” he said.

Still, he believes the Fed will prioritize the labor market and begin cutting rates as early as June, reducing the benchmark rate by 25 basis points at each meeting until it hits 3% in January 2026.

The political fallout from the economic turmoil is also beginning to reshape the national mood. Democrats, still reeling from their 2024 defeat, are showing renewed momentum. They clinched a key state Supreme Court seat in Wisconsin and have begun organizing what is expected to be the largest round of protests since Trump’s return to office.

“The winds are changing,” said Rahna Epting of MoveOn, one of several advocacy groups planning nationwide demonstrations.

Progressive groups believe Trump’s economic gamble could hasten a political realignment.

“Raising prices across the board for your constituents is not popular,” said Ezra Levin, co-founder of Indivisible. “It’s the kind of thing that can lead to a 1932-style total generational wipeout of a party.”

For now, however, the recession JPMorgan predicts appears increasingly likely — not as a risk on the horizon, but as the logical outcome of policies that Trump has no intention of backing down from.