Brazil, Argentina's largest trading partner, chooses its president on October 25, and the winner will shape both a bilateral deficit that has shrunk by 91% in a year and President Milei's push to loosen the Mercosur customs bloc.
Senator Flávio Bolsonaro won the first round on October 4 with 47.03% of valid votes against 45.16% for President Luiz Inácio Lula da Silva, according to Brazil's electoral court. Pre-election polls had Lula ahead. Milei openly backed Bolsonaro, and neither cleared the 50% needed to win outright.
Where trade stands
Argentina's September deficit with Brazil was US$51 million, down from US$578 million a year earlier, according to Brazil's economy ministry. Argentine imports from Brazil fell 25.2% to US$1.357 billion, while exports rose 5.5% to US$1.305 billion, the consultancy Abeceb reported. Over January to September, Abeceb puts the deficit at about US$1.69 billion, against US$4.70 billion a year earlier.
Abeceb says the improvement owes more to weak Argentine demand than to stronger sales: the four main car-related import lines fell from US$795 million to US$433 million, roughly 79% of the drop in imports from Brazil. Argentine car production fell 15.6% in September and new-car registrations 11.4%, and Abeceb says Chinese and other non-Brazilian models are taking share.
On the export side, freight and special-purpose vehicles brought in US$350.6 million in September, 26.9% of Argentina's sales to Brazil, while passenger-car exports stayed flat at US$147.9 million. Crude oil sales to Brazil rose 42.2% to US$61.8 million and aluminum 121.1% to US$53 million, while wheat fell 25.7% as Brazil buys more from Russia and the United States, Abeceb said. Abeceb projects a 2026 deficit of about US$2.2 billion, under half the US$5.2 billion of 2025.
If Bolsonaro wins
The Casa Rosada sees a Bolsonaro presidency as a window to rewrite Mercosur. Argentina wants a review of the common external tariff (the single duty members charge on imports from outside the bloc) and more freedom for members to sign trade deals with third countries.
Abeceb says the stronger real after the first round already helps Argentina's trade balance, and that a Bolsonaro win would have ambiguous effects on Argentine sellers: a smaller Brazilian fiscal deficit could encourage more credit and more purchases of Argentine goods, while a weaker Mercosur could hurt sales. Gustavo Pérego of Abeceb has said lower Brazilian trade barriers could expose Argentine auto-parts makers to more competition.
If Lula wins
Pérego expects a distant relationship with Milei, with talks run mainly by technical teams. Argentina would have to pursue its Mercosur agenda with a government Milei called "the communist Lula" on election night. The car trade, which Abeceb puts at about 40% of the total, would keep depending on Brazilian demand and the exchange rate, as it does now.
Brazilians vote in the run-off on October 25.