Argentina: the price of notebooks soared up to 80% after the return of import tariffs

The Cordoba Stock Exchange reported an alarming increase in the price of technology as a natural response to the protectionist measures promoted by the government.

The increase in internal costs deteriorates competitiveness and foreign currency inflows.

President Alberto Fernández and Minister Sergio Massa strongly defended applying new protectionist measures, this time aimed at the technology sector.

Massa defended “fair trade” between imported and domestic products, but the truth is that the costs were passed on to the bulk of society.

The government announced the return of import tariffs for notebooks (from 0% to 16%) and tablets (from 0% to 2%) as a measure to deliberately make imports more expensive and discourage domestic competition.

A few hours after the measures were announced, the average price of computers shot up by 37.5%, according to a recent report by the Cordoba Stock Exchange.

The products most affected by the tariff measures suffered increases of up to 80% in less than 48 hours.

The institution took as a reference the prices of these products traded through the Mercado Libre platform and considered the 10 most consumed models in the country.

The Dell Inspiron 3,515 notebook model increased by 4.7% in a matter of days, the Asus X1502 increased by 14.2%, the Dell Vostro 3401 increased by 46.2%, HP notebooks shot up by 76.9% (the highest increase of all) and the Lenovo IdeaPad 15ITL05 model suffered an increase of 74.4%, among many alternatives.

The new tariff provisions make technology less accessible to Argentine consumers and companies.

The Cordoba Stock Exchange explained that the increases are not isolated and do not correspond only to the inflation dynamics but respond exclusively to the restriction of imported competition.

Although the Government emphatically denied it, the increase in the domestic price level is precisely what any import tariff is intended to achieve.

Tariffs are established to limit competition against the world market to allow the development of inefficient industries that otherwise could not exist, causing a transfer of income from the majority of society to a handful of domestic entrepreneurs who substitute imports.

Increased economic activity in uncompetitive sectors contrasts with the fall in consumption that society must suffer in the face of rising prices.

The cost increase also contributes to the deterioration of Argentina’s competitiveness abroad in many sectors, especially in the export of services (an area gaining more and more relative weight in recent years).

The lower flow of exports implies, at the same time, a lower inflow of foreign currency into the country, which is consistent with the lower import capacity (it is increasingly difficult to finance the same amount of imports).

This comes at a particularly sensitive time for the foreign exchange market, which is heavily regulated by exchange controls.

“High tariffs imply higher costs for acquiring products from other countries. As a direct result, imports are reduced, with numerous negative consequences.”

“Among them, the private sector loses competitiveness vis-à-vis the rest of the world due to the lack of access to cheaper resources that allow for increased efficiency and/or the adoption of technologies”, explains the report of the Stock Exchange.

With information from La Derecha Diario