Argentina Imposes Tariffs on all Exports Including Steel amid Currency Depreciation

According to the latest updates, the Argentinian government has announced the imposition of tariffs on the exports of all the products including steel amid the country’s dramatic currency depreciation.

This tariff varies between primary products and finished products. For primary products, for every USD 1 exported, a duty of Argentinian Pesos 4 is charged, while for finished products, for every USD 1 exported a duty of Pesos 3 is charged. However, no breakdown was provided for categories of primary or finished products.

Besides the tariffs, the government will cut its ministries more than 50% and decrease public spending by 4% with its goal to advance the fiscal deficit reduction to zero in the year 2019, against the previous target for 2020.

Latin America’s third-largest economy, Argentina is going through an economic crisis as the Argentina peso has fallen 52% against the dollar this year. The country is expected to enter a recession in the third quarter of CY18 after borrowing costs, government spending cuts and an agricultural drought have resulted in the peso becoming the world’s worst-performing currency this year.

A number of emerging market countries, including Argentina, Turkey and Brazil, are also struggling as the U.S. Federal Reserve has implemented the tighter monetary policy to boost the dollar.

Argentina is subject to a quota for steel exports to the U.S. under Section 232 as well as aluminium imports where the country is allowed to export 180,000 MT of value-added steel and 180,000 MT aluminium to the U.S. without facing tariffs.

Also recently, U.S. has allowed targeted relief from quotas for Argentina, Brazil, and South Korea which allows the U.S. companies to imports products from the above mentioned three countries by applying for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminium producers.

So far in 2018, Argentina exported 86,054 MT of steel products to the U.S., down 11.9% from 97,747 MT in the same period of 2017. Last year from January to December 2017, Argentina exported 211,465 MT of steel products to the U.S., the highest annual figure since 2013. However, Argentina does not account in the U.S. list of top ten steel exporters.
Argentina plays an important role in supplying finished steel to South American markets. However, the country does not provide official customs data.