MercoPress. South Atlantic News Agency

Argentina makes imports easier to tackle inflation

“The reduction of the PAIS Tax will imply a reduction of prices in September,” Caputo pointed out

On Thursday, Argentina's Economy Ministry announced that it would suppress bureaucratic hindrances to importing key industry inputs such as steel, aluminum, and construction materials to “encourage competition and lower costs.” The measure also comes with a reduction in PAIS tax on purchases abroad to further tackle inflation. Representatives of the local steel industry expressed their objections and denounced that relevant safety measures were being disregarded.

 “With this decision, 31% of steel imports will no longer have customs intervention and there will be greater supply, which will result in more competition and lower prices,” the Economy Ministry said in a statement. Modifying the technical regulation (RT) on steel simplifies and lowers “the costs of the import process of this product, which in Argentina is up to 50% more expensive than the world average,” the agency also argued.

In addition, the Libertarian government also announced the digitalization and relaunching of the Stock Replenishment Regime (Repostock) system to guarantee the continuous supply of inputs used in industrial exports. “It was done on paper and was so complicated that only 73 companies used it in 2023, taking into account that there is a universe of more than five thousand exporting companies that could use it,” the Ministry explained.

While executives from automotive and autopart-producing companies welcomed the announcements, the Argentine Steel Chamber denounced that “there are technical safety regulations in the United States and Europe,” which apply to “any steel used in construction.”

Local steel producers Techint Group CEO Paolo Rocca said a fortnight ago that competing with China in this field became “substantially impossible.”

“Chinese imports help to control inflation in our countries, but they have a negative impact on our industrial sectors, and they have even worse effects on investment and growth,” he underlined.

Nevertheless, the Libertarian administration is focused on curbing inflation despite any consequence to the country's coffers. The PAIS tax is to be lifted altogether before the end of 2024, it was also announced in Buenos Aires.

Economy Minister Luis Toto Caputo acknowledged Wednesday that August's Consumer Price Index (CPI) would be once again around 4%, as it was in July. “The reduction of the PAIS Tax will imply a reduction of prices in September,” Caputo pointed out.