The recent closure of Fate, an 86-year-old tire manufacturer with a workforce exceeding 900, exemplifies a broader trend in Argentina’s economic landscape. Official figures indicate that manufacturing facilities in the country are operating at merely 50% of their potential capacity, and since Javier Milei assumed office in December 2023, more than 20,000 enterprises have ceased operations. The closure of Fate is emblematic of a broader trend impacting not just small and medium enterprises, but also large corporations. “A significant number of companies are ceasing operations, particularly in the Buenos Aires region,” stated Florencia Fiorentin. “Essentially, a decline in demand coincides with the liberalization of imports — consequently, companies are experiencing reduced sales.” Alejandro Assuma indicated that the conflict commenced in 2024, following the company’s decision to lay off 100 employees. Reports indicate that the national administration attributed the shutdown of Fate to SUTNA; however, Assuna has dismissed this assertion. “At this moment, Fate has high production, a substantial economic holding company with significant backing from the aluminum company Aluar and energy companies — they are reallocating their investments to the energy sector,” stated Assuma.
The most recent data indicates that the energy sector is among the limited areas that experienced growth from December 2024 to December 2025. The report indicated that the industry operated at 53.8% of its capacity in December. The sectors currently experiencing the most significant downturn are the automotive, plastic, and textile industries, functioning at merely 31.2%, 33.4%, and 35.2% of their capacity, respectively. Lorenzo Sigaut Gravina stated, “big companies, which manufacture finalized products, are the ones directly competing with imports — that’s why they are suffering the impact more.” Sigaut Gravina noted that tradable sectors, which are subject to the dynamics of imports and exports, have experienced a decline during the presidency of Javier Milei. He referred to the phenomenon as a “substitution” of domestically produced items for foreign imports.
“The economy was previously characterized by significant closure, and the rationale for its opening is evident; however, there is a concerning trend of declining local production alongside rising imports and import volumes.” He added “It was logical for imports to increase, but it was not so logical for local production to fall.” The economist noted that in various sectors, including the tire industry, “most imports are coming from China,” despite Milei being a close ally of Donald Trump, who is currently engaged in a trade war with the Asian nation.
Meanwhile, the government appears determined to liberalize the economy by increasing imports. “Some are going to go bankrupt,” stated Miguel Boggiano during an interview. “It is unfortunate to state this, yet it is equally unfortunate that 47 million Argentinians are burdened with high prices due to the privileges of 500,000 individuals,” he remarked.