FT: Javier Milei’s next economic mission: affordable air fryers

Libertarian President Javier Milei is transforming Argentina's economy by slashing tariffs and dismantling protectionist policies. His reforms aim to lower consumer prices, combat triple-digit inflation, and open markets to global competition. While Argentines welcome affordable imports like Tide detergent and Amazon products, domestic industries are grappling with rising imports and job cuts. Critics argue Milei's changes risk destabilizing manufacturing, but supporters see an opportunity to reorient the economy towards competitive sectors like agriculture and tech..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..By Ciara Nugent in Buenos Aires ___STEADY_PAYWALL___.Libertarian leader scraps tariffs to break open Argentina's protectionist economy, unnerving domestic industry.Javier Milei has begun wrenching open Argentina's protectionist economy, slashing tariffs in a bid to beat down high prices on everything from air fryers to electronics. .Argentines are ordering from Amazon for the first time and supermarkets are beginning to stock their shelves with Tide laundry detergent and Ecuadorean tinned tuna, as the libertarian president dismantles a web of duties and regulations that have made many imported products near unaffordable..A Black & Decker air fryer that sells for $100 in the US retails for $289 in Argentina, according to listings on online retailers. A Zara slip dress that costs $25 in the US sells for $67 in the country, while an Apple iPhone 15 on sale for $799 in the US costs $2,800..The average Argentine salary is less than a quarter of the US level..Argentines complain that domestically produced electronics, clothes and other goods, whose manufacturers are shielded from competition and face a big tax burden, are also overpriced.."Everything is expensive . . . and the difference in quality is really noticeable," said Matías, 42, a municipal government worker in Buenos Aires. "I'm a friend of Argentine industry, but not at any cost." .Aiming to lower consumer prices and speed the decline of Argentina's triple-digit annual inflation, Milei's government has slashed tariffs on dozens of products, from acne cream to funeral urns..The government has stripped away red tape at Argentina's customs agency, including a rule that required representatives of local manufacturers to give approval for some imports from their foreign rivals..Milei's administration has also tripled the annual amount that Argentines are allowed to order from abroad for personal use to $3,000, exempting the first $400 from tariffs. Amazon began offering free shipping of some products from its US store to Argentina in November.."We are lowering tariffs that underpin the disastrous scheme to replace imports [with domestic production]," Milei told a business event in October. "It has punished the whole of society with goods and services of worse quality at a higher price, for the benefit of a privileged few.".Read more: 🔒 The Economist: Javier Milei has turned Argentina into a libertarian laboratory.On December 22, the government stopped charging a blanket tax of 7.5 per cent on all imported goods and a 30 per cent tax on Argentines' overseas card purchases..The changes put Argentina on the opposite course to much of the rest of the world. In recent years European countries and the US have erected new trade barriers to protect domestic industries from cheap imports from China and elsewhere..Argentine manufacturing businesses warn that a surge in imports could devastate a sector that employs almost a fifth of workers and has already been hit hard by the country's economic crisis. Manufacturing activity was down 12.7 per cent in the first nine months of 2024 compared with the same period in 2023.."Imports are up, demand is down, and our costs have risen," said Pablo Yeramian, director of textile group Norfabril, who has already cut 15 per cent of his 280 staff. "We're trying to hold out, but we expect to cut more.".Companies said Milei's government had yet to resolve the high taxes and rigid labour market that have made Argentina one of the most expensive countries in Latin America to do business.."They want to get rid of all of the obstacles for foreign companies, but they haven't cleared the obstacles for me," Yeramian said. "We're not on a level playing field.".Milei's reforms are the latest swing of the pendulum for Argentina's economy. Governments from the left-leaning Peronist movement, which is allied with labour unions, have implemented tariffs and subsidies to promote domestic industry, while rightwing governments in the 1970s and 1990s scrapped restrictions, causing waves of industrial closures..Milei has said he wants to unleash market forces to reorient Argentina's economy towards sectors where it has a competitive advantage: agriculture, mining, energy and tech, which together employ just 12 per cent of Argentines..Cristina Fernández de Kirchner, the former president and current leader of the main Peronist party, said in November that Milei "wants to reduce us again to a simple colony that exploits raw materials and to hell with all the rest"..The economy became more closed off than it had been in decades under Milei's Peronist predecessor Alberto Fernández, who sought to protect scarce hard currency reserves by limiting companies' ability to pay suppliers. The restrictions severely disrupted manufacturers and retailers, leading to shortages of goods including tyres.."The only way to import something was if you knew someone in the government who you could pay under the table to skip the queue," said Ricardo Martinoglio, chief executive of hardware chain Lüsqtoff, which imports and rebrands its products..Milei's government resolved those issues in early 2024, lifting lengthy waiting times for payments and creating a dollar bond to help companies pay off debts they had built up to suppliers..Now, Martinoglio said the government's tariff cuts would allow him to stop increasing prices despite Argentina's still-high monthly inflation rate of 2.4 per cent. "My drill will cost the same in two months, but your salary will have gone up," he said, as employers regularly update salaries for inflation..Manuel Sánchez Gómez, director of Argentina's largest electronics retailer Frávega, said Milei's reopening of the economy and macroeconomic stabilisation had "much improved" the business outlook. "Our planning horizon has gone from about two months to three years.".But Miguel Guerendiain, who manages his wife Josefina's small clothing business, said he feared the changes were too fast: "A year ago, we couldn't find zips because of all the problems. To go from that to a completely open economy would be a mistake.".He said taxes accounted for 40 per cent of their price tags, and argued that the current 35 per cent tariff on clothing was needed to level the playing field. An economy ministry spokesperson declined to comment on whether it would be lowered..Julio Rodriguez Rabellini, an economist at Argentina's chamber of commerce, said manufacturing's weight in the economy "would likely shrink" under Milei. But he said the government was moving "quite carefully", noting that it had lowered, rather than eliminated, tariffs..Milei is limited by Argentina's membership in Mercosur, the South American trade bloc, which imposes a common tariff of up to 20 per cent on external goods and only allows countries a limited number of exemptions. Milei called Mercosur a "prison" at its summit in November..An official in Argentina's industry and trade secretariat said the government would only cut domestic taxes when they could do so "without breaking fiscal balance", which is the backbone of Milei's economic programme. Several of the taxes that manufacturers face were set by provinces, they added..Marcelo Figueiras, president of Argentine drug manufacturer Richmond labs, which exports and sells locally, said Milei had "done well" to stabilise the economy this year, but had yet to lay out a "clear strategy" on industry.."I'm not expecting subsidies or other advantages, but there is such a thing as dumping," he said. "There are many competitive companies [that] have survived Argentina's pendulum, and the government should now make clear, reasonable rules that stop it swinging and let us all grow.".Read also:.🔒 Argentina's president Javier Milei faces economic turbulence as inflation soarsJavier Milei is proving more pragmatic than radicalIn conversation: Argentine president Javier Milei talks economy, China, Trump and more.© 2025 The Financial Times Ltd.

FT: Javier Milei’s next economic mission: affordable air fryers

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