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The factory floor kept roaring.
Wandering around his textile mill in the South Buenos AiresLuciano Galfione pointed to the latest machines that once spun and rattled as 200 workers prepared clothes to turn into athletic and other apparel for Argentina’s vast middle class.
But on Monday afternoon, the factory was so quiet that Galfione’s footsteps could be clearly heard across the premises. A handful of workers make yarn and dyed fabrics at a Galfione Group factory in the Argentinian capital.
about two years after Muktibodh chairman xavier miley Came to power on a promise to save Argentina’s troubled economy through harsh austerity and free-market reforms, falling orders and increasing competition have forced Galfión to cut operations by 80%, lay off or suspend half his staff and use his savings to keep his family’s 78-year-old firm afloat.
Other companies have closed their doors. More than 17,600 businesses — including 1,800 manufacturers and 380 textile companies — have closed over the past year and a half, according to Fundación Pro Tejar, a nonprofit representing textile manufacturers.
“We are looking at an industry in crisis, and it is about to go bankrupt,” said Galfione, who also runs the Fundación Pro Tejar. “Not just fabric. Fabric is the first and fastest to degrade.”
As Argentina heads to snap elections on Oct. 26, widely seen as a referendum on Miley’s policies, Galfione’s troubles reflect a larger shock hitting the country. The economy has faltered. Cheap imports have destroyed manufacturing. Spending has declined due to high unemployment and low wages.
As soon as Trump got angry argentina to groan
The turmoil in Argentina’s financial markets began when voters in the manufacturing sector of suburban Buenos Aires – an area that for decades represented the dream of national industry nurtured by tariff protection – punished Miley in a provincial election last month.
The scale of Miley’s humiliation triggered a sharp selloff in the peso and left officials scrambling to secure $20 billion in financing from the friendly Trump administration.
chairman donald trumpThe Argentine, who views the chain as a kindred spirit and fellow culture warrior, stunned Argentines and Americans alike on Tuesday by warning that $20 billion was contingent on Miley’s success in what is shaping up to be a hotly contested legislative election.
Treasury Secretary Scott Besant further said on Wednesday that the US could tap the investment fund to provide up to $40 billion in aid to Argentina.
“It’s just a great philosophy helping a great country take over,” Trump said after meeting Miley at the White House.
Thousands of miles away, many Argentines are losing patience with that philosophy.
People interviewed on the streets of Buenos Aires on Wednesday had no illusions that Trump’s lifeline was solving their problems.
“Suppose they give us this money from abroad. What am I going to do with it?” asked Walter Willat, a 56-year-old newsstand owner whose son was recently laid off from a local Toyota dealership. “If the economy revives it will have to be through domestic consumption.”
Miley’s luck suddenly changed
More than a year ago, markets were happy as Miley delivered on her key promise to reduce the runaway inflation she inherited from her populist predecessors. Many Argentines – who had become accustomed to supermarkets raising prices every day – hailed Miley’s event as a miraculous glimpse of normalcy in a notoriously upside-down economy.
But today, price stability is old news as Argentina grapples with a long list of concerns.
Unemployment in Buenos Aires province rose to 9.8% in the second quarter of this year, compared to 7.3% during the same period in 2023, before Miley entered office. Salaries across the country have not kept up with inflation. Miley’s major subsidy cuts mean that even if prices have stabilized, Argentines are paying more for bus fares, utility bills and health care.
Marcelo J., Americas director of political risk consulting firm Horizon Engage. “Miley’s challenge is that the public now believes that inflation has gone down, that’s for sure,” Garcia said. “The new generation has demands. The economy needs to grow, jobs need to be created. I am not sure the government is ready to meet those demands.”
Rodolfo Nunez, a 43-year-old former factory worker in Pilar, outside Buenos Aires, said he voted for Miley in 2023 because he wanted change. Then the shocks started falling. The cost of his daughter’s epilepsy medicine increased. His retired parents struggled to buy groceries on their $300-a-month pension.
On August 29, the ceramic factory where he had been working for the last 18 years closed down. The company, ILVA, fired all 300 workers at the plant, citing the economic crisis in a WhatsApp message, leaving Nunez and his colleagues in limbo without severance pay or health insurance.
ILVA did not respond to a request for comment.
“Miley didn’t do what he promised. He messed with the retirees, he messed with my daughter and he messed with the workers,” he said from outside the locked ILVA factory, where dozens of laid-off workers are now camping in protest, the air filled with smoke from burning tires and roasting chickens.
“What do I tell my landlord? That I can’t pay him next month? Where do I go?”
Núñez said he voted for the opposition in last month’s regional elections.
Argentina’s consumer confidence left in tatters
Government figures show that poor and middle-class families are cutting down on all expenses except essential ones. For example, clothing sales in September fell 10.9% compared to a year earlier. Collapsed consumption impacts the supply chain.
“We’re cutting costs as much as possible, trying to survive with very little production and without making money,” said Alejandro Schwartz, owner of home appliance seller and manufacturer Visuar, whose sales have fallen about 25% in the first half of this year.
Other policies that Miley relies on to fight inflation – such as high interest rates and central bank intervention to protect the peso – further reduce the competitiveness of Argentine industry.
The peso has become so strong that buyers now get more money for spending money anywhere other than Argentina – from the malls of Chile to the beaches of Brazil.
flood of cut-throat competition
Upon taking office, Miley removed trade barriers and relaxed import restrictions, allowing Argentina to flood with cheap industrial and textile products. Chinese e-commerce companies like Temu and Shein do not charge any import duty for products priced under $400.
But Miley maintained excessive taxes for Argentinian manufacturers, leaving local companies no choice but to pass the cost on to consumers.
“It is not a fair playing field,” said Pablo Yeramian, director of Argentinian textile company Norfabril, which has already cut 20% of its workforce.
As footage of Miley smiling next to Trump in Washington appeared on Argentinian television on Tuesday, some producers couldn’t help but wish that the similarity between the two presidents, at least in a way, was more than just rhetorical.
“No developed country in the world gives up its industrial sovereignty,” Galfione said, pointing to Trump’s “Made in America” ambitions for the U.S. “I think instead of doing what America tells us, we should do what they do.”
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Associated Press writer Andrea Vulcano in Buenos Aires, Argentina contributed to this report.