Argentina’s government suspended export taxes on aluminium, steel, and their derivatives on Wednesday, a move aimed at boosting competitiveness in the manufacturing sector and bolstering exports of those products, according to a resolution published in the official gazette.
The measure will be enforced from Wednesday and will remain in place until December 31, 2025 or until countries importing these goods lower their tariffs below 45%.
Suspension of export taxes will only apply to destinations where import tariffs on those products are a minimum of 45 per cent currently.
The move is a sign that Argentina is trying to promote industrial exports in a fraught economic environment while also trying to slowly liberalise its trade policy.
Temporary relief for the industrial sector
The tax lift is designed “to enhance export capacity and improve the competitiveness of one of the productive sectors of the country,” according to the government’s decree.
Steel and aluminium producers, part of the metals industry, have struggled in recent years amid an international environment of price volatility and weak domestic economic conditions.
Finally, easing the export tax burden is meant to promote shipment abroad and foreign exchange inflow. The measure provides a respite to firms that have faced high production costs and a bottleneck in exports abroad.
However, this suspension represents a reprieve for exporters and is dependent on the global world discovering equilibrium on trade within these goods.
That helped the UK make the first moves against Argentina, but his government tied the tax exemption to the tariff policies of destination countries, indicating that Argentina was determined to balance its own openness with trade reciprocity.
Broader trade strategy
The step is part of a wider effort by Argentina to adjust its export regime.
In September, the government temporarily eliminated export taxes on soy, corn, wheat and their by-products, including biodiesel, to try to boost sales of farm goods and bring in sorely-needed foreign currency to stabilise the peso.
But that agricultural move was rescinded in less than a week. The brief halt highlighted the careful balancing act the government has between boosting exports and controlling fiscal income.
The recently announced metals policy, on the other hand, spans a much longer duration, suggesting a much more long-term attempt to provide support to the industrial sector.
In announcing that decision, officials called it a continuation of a movement toward “increased transparency” on trade policy, similar to the administration’s overall message on the economy.
Encouraging exports despite economic pressure
Despite a modest economic recovery, Argentina is under pressure to attract foreign cash and increase industrial output.
Export taxes have long been a major source of government revenue, but they have also been blamed for discouraging production and reducing international competitiveness.
The interim suspension is a strategic gamble: by foregoing short-term tax revenue, the government hopes to boost exports and economic activity.
The measure’s long-term effectiveness may be determined by global demand and the speed with which trading partners increase their own import duties.
Outlook for the metals industry
For aluminium and steel producers, meanwhile, the policy could further unlock access to high-tariff markets that previously were less accessible under export levies.
Firms shipping to such markets might even become price-competitive enough to recover or increase their market share.
However, the decree’s built-in expiration and tariff-based limits may leave little room for long-term planning.
This rebate on export taxes would automatically be revoked if countries (which are the end-destination of most Chinese steel) reduce their import duties to below the 45% mark by the end of 2025.
This conditionality orients the expectation that the government is only experimenting with selective liberalisation rather than undertaking a permanent structural transformation.
The temporary measure could either develop into a wider trade reform or stay as a temporary action, which is still to be seen.
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