This week, the U.S. Treasury Department announced a $20 billion currency swap bailout for Argentina, as the country struggles with surging inflation, rising unemployment, deepening poverty, and a severe shortage of U.S. dollars as the peso devalues. The rescue package is the largest U.S. intervention in Argentina’s economy in decades, offering temporary relief in dire times.
President Javier Milei has branded himself as one of Washington’s most loyal allies in Latin America, especially under President Donald Trump, whose own populist brand of right-wing politics he has wed to a radically libertarian economic policy.
Yet, despite initial rhetoric promising to end Argentina’s ties to “communist countries” and to align itself with the West, Milei’s administration has quietly strengthened Argentina’s engagement with China, illustrating a broader pattern in which multipolar pragmatism wins out in a region long dominated by American power. As Eduardo Porter of the Washington Post wrote recently, “Trump can’t beat China in Latin America by being a bully” anymore.
Across Latin America, governments increasingly treat Beijing and Washington (and even Moscow, Brussels, and New Delhi) as partners of equal standing, hedging between powers while pursuing their own economic needs.
As a case in point, last week, the Chinese automaker BYD officially launched EV sales in Argentina, seizing the opportunity created by the government’s decision to lift import tariffs on electric and hybrid vehicles. The policy allows up to 50,000 vehicles to enter the country tariff-free in 2026. BYD, the world’s leading EV manufacturer, has moved swiftly to dominate that space.
Its new models, the Yuan Pro electric SUV, the Song Pro plug-in hybrid, and the Dolphin Mini, are priced at under $16,000, less than half the cost of comparable U.S. electric vehicles such as Teslas and Ford EVs.
Even compared to locally produced combustion cars, BYD’s vehicles are significantly cheaper. With oil prices fluctuating and the peso under pressure, affordability could make this launch an overwhelming success.
Out of the 50,000 EVs and hybrids allowed under the new measure, roughly 40,000 are expected to come from China. The remaining quota appears designed to appease U.S. investors and political figures in Washington. In practice, if sales continue along current trends, Chinese firms like BYD could easily dominate the entire allocation.
Stephen Deng, BYD’s country manager in Argentina, noted that the company currently holds an import allocation of about 7,800 electric and hybrid cars, calling the government’s policy a “tremendous opportunity” for expanding electromobility in Argentina.
Argentina is the second-largest automobile market in South America after Brazil, but has the region’s lowest penetration of EVs. Between January and August 2025, only 486 electric cars were sold out of 421,000 total sales. For years, importers were constrained by unfavorable exchange rates and steep tariffs, which kept most consumers reliant on locally-built gasoline cars.
With the tariff exemption and China’s entry into the market, that dynamic may shift quickly.
BYD’s launch also reflects China’s growing industrial strategy in South America. To ease political and labor concerns, the company plans to invest directly in Argentina, potentially opening a manufacturing plant similar to the one it just inaugurated in Brazil.
That Brazilian facility, BYD’s largest investment outside Asia, was endorsed by President Lula da Silva, signaling how deeply Chinese firms are embedding themselves in Latin America’s green-industrial landscape.
Milei’s government cut tariffs on EVs in April, marking an abrupt reversal from its earlier rhetoric. Milei has previously called Xi Jinping a “murderer” and a “thief,” and berated China’s economic and political system when he was running for president. Yet at the G-20 summit in November 2024, Milei met with Xi, effectively abandoning that position. The meeting marked Argentina’s continued integration with China.
China’s presence in Argentina already extends far beyond electric vehicles. Chinese banks now operate across the country, and Argentina can now do trade and foreign exchange using the yuan. China has also quietly become a key source of credit and investment for Argentine infrastructure, energy, and transportation projects.
As China’s capital, technology, and labor expand visibly deeper into Argentina’s economy, Washington’s bailout may buy time, but is unlikely to buy loyalty in this new era of great power competition, no matter how much Trump may want it.
This sale will continue defining Argentina and Latin America’s broader trend towards pragmatic engagement with great powers, where business is guided by whoever can offer the best terms, rather than what is the most politically expedient choice.
