Argentina’s industrial sector is approaching a critical junction under President Javier Milei’s sweeping liberalization drive. As tariffs fall and imported goods move rapidly into the domestic market, industrial leaders are not rejecting reform itself – they are warning that the pace and sequencing risk dismantling productive capacity before competitiveness has time to form. From the perspective of YourNewsClub, this is not a political clash but an economic stress test of shock therapy applied to a structurally distorted economy.
Martin Rappallini, head of the Argentine Industrial Union (UIA), has been explicit: manufacturers largely support Milei’s pivot toward a private-sector-led model and expect economic growth to reach 5–7% by 2026, exceeding official budget assumptions. Yet that outlook is conditional. Without parallel reforms in taxation, labor regulation, and access to financing, domestic firms face asymmetric exposure – competing against global producers while still operating under legacy cost structures denominated in dollars.
Since Milei entered office in December 2023, the impact on industry has been sharp and uneven. Fiscal austerity has compressed domestic demand, while trade liberalization has exposed labor-intensive sectors to cheaper imports almost overnight. Industry data show that more than 40,000 industrial jobs have been lost during the transition. Construction-linked activity weakened after public works were halted, and parts of the textile industry have collapsed under import pressure.
By contrast, sectors anchored in commodities – mining, hydrocarbons, and related processing – have remained stable or expanded, benefiting from export pricing and global demand. As YourNewsClub analyst Freddie Camacho, examining how production systems respond to policy shocks, points out, liberalization tends to reward sectors already integrated into global value chains while punishing those reliant on protected domestic demand. In his view, the divergence now visible across Argentina’s industrial base is not accidental but structural.
Macroeconomic indicators give the government ammunition. Inflation has dropped dramatically, from annual rates above 200% to just over 30% in the past year. At YourNewsClub, we see this stabilization as real – but incomplete. Price control does not automatically translate into productive recovery. Without demand, credit, and time, firms may stabilize only long enough to shrink.
Industrial output figures reflect that fragility. The sector contracted nearly 10% in 2024 compared with the previous year, before registering a modest 3.1% year-on-year increase by October 2025. Executives acknowledge the rebound but describe it as shallow and uneven, heavily dependent on financing conditions rather than organic expansion.
Labor and tax reform bills currently advancing through Congress are widely supported by industry, but expectations remain restrained. Even proponents concede that their effects will materialize gradually over several years. As YourNewsClub analyst Alex Reinhardt, focused on how capital availability shapes real-economy outcomes, argues, Argentina’s central bottleneck is not ideology but liquidity. “Stabilization without credit freezes adjustment in place,” he notes. “Firms survive, but they cannot modernize or compete.”
From Your News Club’s editorial view, the unresolved question is sequencing rather than intent. Milei’s strategy assumes that efficiency will emerge once distortions are removed. Industry leaders are asking whether the transition window is wide enough to preserve capacity while that efficiency takes shape.
The answer will determine whether Argentina’s liberalization becomes a foundation for durable growth or a case study in premature exposure. Reform can succeed – but only if openness, investment, and credit arrive in the right order.