International trends

   On Thursday, Argentina’s Ministry of Economy announced plans to remove bureaucratic obstacles to importing essential industrial inputs such as steel, aluminum, and construction materials. This is intended to “promote competition and reduce costs.” Additionally, the government will reduce the PAIS tax on foreign purchases to address inflation. However, representatives of the domestic steel industry have raised concerns, arguing that safety standards are being overlooked.

 

    According to the Economy Ministry, “31% of steel imports will no longer require customs intervention, increasing supply, fostering competition, and lowering prices.” The Ministry also noted that changes to the technical regulations (RT) on steel would simplify the import process, reducing costs for steel, which is reportedly 50% more expensive in Argentina than the global average.

 

   The Libertarian government also revealed plans to digitize and relaunch the Stock Replenishment Regime (Repostock) to ensure consistent supply for industries reliant on exports. The Ministry explained that previously, the system was paper-based and so cumbersome that only 73 companies used it in 2023, even though over five thousand exporters could potentially benefit from it.

 

   While the automotive and autoparts sectors welcomed the reforms, the Argentine Steel Chamber criticized the move, emphasizing that steel safety standards in the U.S. and Europe apply to all materials used in construction.

 

   Techint Group CEO Paolo Rocca recently commented that competing with China in this area has become “virtually impossible.” He warned that while Chinese imports help to curb inflation, they negatively impact local industries, investment, and economic growth.

 

   Despite these concerns, the Libertarian administration remains focused on reducing inflation, even if it affects the national budget. The PAIS tax is set to be eliminated entirely by the end of 2024, according to an announcement in Buenos Aires.

 

   On Wednesday, Economy Minister Luis Toto Caputo acknowledged that the Consumer Price Index (CPI) for August would be around 4%, similar to July's figure. He added that the reduction in the PAIS tax would lead to lower prices starting in September.