Argentina Textile Crisis Deepens As Cheap Imports Surge

(MENAFN- The Rio Times) Key Points

- Argentina's textile sector has shed over 18,000 jobs since December 2023, with factories operating at roughly one-third of capacity as Milei's tariff cuts and e-commerce liberalization flood the market with Chinese imports

- Clothing imports surged 97% year-on-year, with China's share rising from 55% in 2022 to over 70% in 2025, driven by Shein and Temu gaining mass adoption after the duty-free threshold was raised to $400

- The government argues cheaper clothing benefits consumers in a historically overpriced market, while factory owners warn the destruction is irreversible without policy intervention

The Argentina textile crisis unfolding behind the glamour of Buenos Aires Fashion Week is one of the sharpest industrial contractions in Latin America. Since President Javier Milei took office in December 2023, the sector has lost more than 18,000 formal jobs, with employment falling from roughly 121,000 to 102,000 workers. Factories are running at about one-third of installed capacity. A century-old cotton textile firm, Emilio Alal, shuttered both plants in January 2026, dismissing 260 workers and ending over 100 years of production in Argentina's northeast. The crisis pits Milei's free-market conviction that Argentine clothing was a“rip-off” against an industry that employs over 500,000 people across its entire value chain. The Rio Times covers Latin American financial news and the trade policy debates reshaping the region's manufacturing base.

The Argentina Textile Crisis in Numbers

The Milei government cut import duties on clothing and footwear from 35% to 20%, reduced fabric tariffs from 26% to 18%, and raised the duty-free threshold for courier shipments from $50 to $400. Clothing imports by weight more than doubled in the first eight months of 2025 compared to the same period in 2024. China 's share of textile and apparel imports climbed from approximately 55% in 2022 to over 70% by 2025, with platforms Shein and Temu becoming household names. Consumer goods imports overall hit a record $11.4 billion in 2025, up 55% year-on-year, while cross-border e-commerce purchases nearly tripled to $955 million. Domestic clothing prices fell 30.6%, a boon for consumers but devastating for producers whose costs - taxes, labor charges, union obligations, and energy - did not fall with them.

At the family-owned factory Amesud in San Martín on the outskirts of Buenos Aires, which supplies Nike, Puma, and the local children's brand Mimo & Co., production has dropped to 30% of capacity. CEO David Kim invested $10 million in imported machinery over the past decade; much of it now sits idle. His workforce has shrunk from 420 to roughly 240, and production days from five per week to four. The Federation of Argentine Textile Industries (FITA) reported that sector activity fell 20.5% year-on-year in September 2025 - the worst decline and lowest level in a decade. The Argentine Industrial Union warned that without a parallel competitiveness agenda, the tariff cuts would accelerate closures.

Consumers vs. Producers: The Political Divide

The government is unapologetic. Economy Minister Luis Caputo said publicly that he had never bought clothes in Argentina because prices were extortionate. Chief of Cabinet Manuel Adorni accused textile entrepreneurs of being“liars” for failing to explain where jobs were being lost when imported jeans cost $25 versus $100 domestically. For consumers like 24-year-old Sarah Alcaje in Mendoza, who previously crossed the border to Chile to find affordable clothing, the change is transformative - she now orders everything from her phone in days. Surveys show 50% of Argentines are struggling to make ends meet, and ultra-cheap imports offer a lifeline that local price-protected manufacturers never did.

Yet the Argentina textile crisis carries a geopolitical irony that extends beyond economics. Milei is Washington's closest ally in Latin America, yet his trade liberalization has made Argentina more dependent on Chinese imports precisely as the Trump administration pressures regional partners to reduce ties with Beijing. China's share of Argentine imports is growing while other countries - including Trump's own United States, France, Indonesia, and South Africa - are raising barriers against Shein and Temu. Priscila Makari of the Fundación Pro Tejer called the situation“very dramatic,” warning that decades of textile expertise, family traditions, and highly skilled workers are being lost permanently. For factory owners like Kim, the question is existential:“We hope we won't be the next to disappear.”

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