In Argentina, local manufacturing is experiencing a sharp decline amid President Javier Milei’s push to liberalize the economy and remove longstanding protectionist measures. Several factories have reduced output or closed entirely, leading to significant job losses and growing concerns about the country’s industrial future.

A stark example is Kioshi, a footwear manufacturer based south of Buenos Aires. Three years ago, it employed nearly 120 workers and produced around 40,000 pairs of sneakers and flip-flops monthly. Today, only 14 employees remain, producing roughly a quarter of that volume. Emmanuel Fernandez, Kioshi’s director, described the domestic market as “dead,” noting that many Argentines have taken on debt just to afford basic necessities, leaving little room for other purchases such as shoes.

Milei, who took office in 2024, has systematically dismantled import quotas, taxes, and other trade barriers. His administration argues that this free-market approach reduces inflation—a significant problem when he assumed office—and improves affordability by exposing Argentina to global competition. Economy Minister Luis Caputo defended these measures by asserting the government’s duty to protect the interests of all Argentines, dismissing concerns over industry declines as “natural” fluctuations encountered during economic transformation.

However, industrialists and labor representatives warn of immediate and widespread repercussions. The Argentine Industrial Union has called on the government to intervene following estimates that nearly 90,000 industrial jobs have been lost and approximately 30,000 companies shuttered over the past three years. Manufacturing output contracted by 5 percent between June and July 2024—its steepest monthly decline in over a year—with around 40 percent of industrial capacity idle.

Small and medium-sized enterprises have been particularly hard hit. For instance, Martin Blunt, a smaller firm producing strings for musical instruments in the Buenos Aires suburbs, has shifted to a four-day workweek due to declining demand. Co-director Gloria Aparicio highlighted workers’ anxiety over job security amid these changes.

Industry representatives argue that local companies face an uneven competitive environment. Factors cited include an artificially strong Argentine peso, high interest rates, and substantial tax burdens, all of which impair the ability of domestic producers to compete with cheaper foreign imports. This environment, coupled with rising unemployment and reduced consumer purchasing power, has further depressed domestic demand.

Former employees of shuttered factories describe a difficult transition. Miguel Marquez, a technician at a closed subsidiary of Swiss chemicals group Clariant, recounted that only a fraction of the 42 staff members found formal employment elsewhere, with many turning to gig economy jobs such as ride-sharing.

While the Milei administration maintains that short-term disruptions are part of a necessary “creative destruction” process aimed at fostering long-term economic growth, critics caution that the immediate social costs are severe and call for policies that balance market openness with protections to help struggling industries and workers adapt to the rapidly changing landscape.