Argentina Slashes Textile Import Tariffs Amid Industry Concerns

Economy Minister Luis Caputo announced significant reductions in import taxes on clothing, footwear, and fabrics on March 14, 2025. The government will cut tariffs on clothing and footwear from 35% to 20% and reduce fabric tariffs from 26% to 18%.

Additionally, yarn tariffs will be lowered to ranges between 12% and 16%. President Javier Milei’s administration claims these measures aim to combat Argentina’s high retail prices and stimulate market competition.

Government data highlights the price disparity: a basic t-shirt costs 310% more in Argentina than in Spain and 95% more than in Brazil, while a jacket costs 174% more than in Spain.

The textile sector employs approximately 539,000 workers across the entire value chain, with 290,000 jobs in direct industrial production. Industry representatives now express serious concerns about potential widespread job losses and business closures.

“Competition against imports of finished goods becomes unequal and unfair,” warned the Argentine Industrial Union in a recent statement. The organization emphasized that the trade liberalization agenda lacks accompanying measures to improve domestic competitiveness.

The Argentine Industrial Chamber of Clothing claimed the tariff reduction “will destroy thousands of jobs and national companies.” They urged the government to prioritize reducing taxes, cutting social security contributions, and addressing high financial costs before opening the market to imports.

Manufacturing Sector Under Pressure

The manufacturing sector already shows signs of strain. Three petrochemical factories have closed or converted to other businesses, while reports indicate at least 10 textile companies face imminent closure risk.

This move continues Milei’s broader trade liberalization strategy. In October 2024, the government reduced import tariffs on 89 goods across various sectors.

Additional measures include increasing personal import limits to $3,000 per shipment and introducing tax exemptions on the first $400 of personal purchases. The government will also allow companies faster access to the foreign currency market.

The government promotes these policies as necessary steps to increase competition, lower consumer prices, and tackle Argentina’s persistent inflation.

Critics argue that without addressing structural competitiveness issues first, the reforms will put domestic producers at a serious disadvantage. They believe this will make it harder to compete with international competitors that have lower production costs.

In short, the textile industry’s future now hangs in the balance as these new policies take effect in the coming days.