Despite the recent improvement in a series of economic indicators, The crisis broke out again in the industry. The opening of imports is hitting hard in different sectors that, without concrete progress in competitiveness, are analyzing ceasing local production and bringing goods from abroad. After the collapse of the first quarter, they talk about a “second wave” of factory closures. The Argentine Industrial Union (UIA) expressed its alert, and there is concern about the destruction of jobs and recent investments that could remain idle.
After long months of silence, The UIA questioned the Government’s latest measures: “If there are phenomena of irrational and indiscriminate opening, we are going to point them out. We are concerned about the arrival of a wave of imports, and we must quickly address the tax aspect,” said the president of the entity, Daniel Funes de Rioja.
The final straw was the Government’s decision to relax the conditions for purchases abroad through courier services. From a maximum of US$1,000, a ceiling of US$3,000 was raised for this modality and tariffs were removed for the first US$400.
This is just one of the opening aspects in which Javier Milei’s administration has been advancing: previously, non-automatic licenses and Customs criteria values were eliminated and tariffs were reduced for hundreds of products. All, in a scenario marked by exchange rate appreciation and the fall in consumption.
The UIA warns of “second wave”
According to government data, In the last year, some 30,000 jobs were lost in the industrial sector. The fall was highly concentrated between December 2023 and March 2024, when activity suffered a collapse of close to 8%. In recent months the decline has slowed down and the Executive has concluded the contractionary phase.
In the industrial sector they warn of a “second wave” of factory closures, as a result of the opening of imports without improvements in the “Argentine cost”. “If competitiveness problems such as tax issues, infrastructure, investment promotion and the modernization of labor regimes are not resolved, the opening will have negative consequences, especially on SMEs and employment,” the UIA warned this year. Monday after their board meeting.
Companies in trouble
What if everything goes well? Although the Government is going through its best moment in economic matters: inflation is slowing down, the country’s risk is low and activity is showing signs of recovery, the context pushes many companies to an extreme situation. The manufacturer Aceros Zapla is practically stopped in the province of Jujuy. He is paying 85% of salaries late because he presented a Preventive Procedure that expires on the 30th of this month. The future of the 230 workers is uncertain. The provincial director of Labor in Jujuy, Carlos Coronel, assured that “this crisis has its origins in the liberalization of imports.”
Another example. Sergio Peretti, owner of the SLP firm that manufactures bicycles, remarked that despite the company’s growth “the outlook now is not so encouraging.”. He warned in an interview with the Dos Florines portal that lowering tariffs will cost jobs: “it can change our profile, if the numbers don’t work, we will go from being an industry to an importer.”
One of the striking points of the case is that the spare parts used to assemble the bicycles continue to pay tariffs. Trumpism in reverse, competitiveness is taken away from local industrialists to improve it for foreigners, they complain. If it is dedicated to reselling merchandise from abroad, the firm could reduce half of its staff
The situation extends to other sectors: textiles, clothing, metallurgical, food, household appliances. This last sector registers unprecedented growth in imports. One piece of information illustrates the situation: Last year, refrigerators were imported at a rate of 3,000 units per month, now about 30,000 arrive in the country monthly.
A businessman in the sector who recently made a multi-million dollar investment to manufacture top brand equipment in the country, wondered what he is going to do now that Argentina is becoming more expensive in dollars, that improvements in competitiveness are not appearing, consumption is falling and The flood of imports is here to stay.
Source: Ambito
