Market Update: Latin America economic outlook | Deloitte Insights – Full Analysis

These tariffs can have both direct and indirect effects on countries through a possible diversification of markets and trade relationships within the region. For example, the tariff on Brazilian meat creates opportunities for Argentina, Paraguay, and Uruguay, as the higher prices of Brazilian products allow for increased competition in these markets. However, the diversification of Brazilian meat exports could generate greater competition for other countries, both in their domestic markets and abroad.

In addition, the possible economic effects may extend to other countries through their trade relationships. For example, a decline in demand in certain Brazilian markets could have important implications for Argentina, given that Brazil is its main export destination.

Tariffs in specific sectors also have important implications. Peru and Chile, despite facing 10% tariff rates, are affected by the tariffs imposed on copper, one of their main exports—with copper accounting for 18% and 5% of their total exports to the United States, respectively.

Commodity prices are another channel through which tariffs exert pressure, as uncertainty surrounding price volatility leads exporters to adopt precautionary behavior. In the case of oil, the price per barrel is around US$63—below the five-year average of US$74. Countries such as Argentina, Colombia, and Brazil—whose exports to China and the United States include oil—are experiencing a decline in export values due to current prices, and if prices remain low, investment in the sector may also decrease.

However, gold—one of the main products exported by Peru and Argentina to China—has seen price increases throughout the year due to the weakening of the US dollar and uncertainty surrounding the performance of the US economy.

The dynamics of the US exchange rate and economic performance will be important to monitor. A potential interest rate cut by the Federal Reserve, signs of economic weakening, and greater clarity on the final tariff framework could lead to changes in the exchange rate and, therefore, impact commodity prices and investment flows to Latin America.

These tariffs impact regional economies at a time when low growth rates are expected (figure 6) (see appendix for 2025 and 2026 projections for selected economies).