The workers and the government of Tierra del Fuego protested the national administration’s decision to eliminate import tariffs. In the province where Argentina’s top electronics manufacturers are located, workers in the factories have begun to strike, and Governor Gustavo Melella said he is preparing a lawsuit against the national government.

On Tuesday, the national administration announced it would eliminate tariffs on imported cell phones, televisions, and air conditioning units by 2026 — the three main products of Tierra del Fuego’s electronics sector. The removal will be carried out in two stages. The first one, which kicked off this week, is a reduction from the current 16% to 8%. The second is a complete elimination of the tariffs, scheduled for January 15, 2026.

“These decisions not only hit jobs and our industries, but also put the economic and social fabric of the province at risk,” Melella posted on his X account. “Our administration will support every action that defends Tierra del Fuego’s industry, jobs, and the provincial economy. Because our industry also means sovereignty.”

On Wednesday, the Río Grande Metallurgical Workers Union (UOM) called for a total strike, claiming the measure could put some 7,000 jobs at risk in the cities of Ushuaia and Río Grande. José Piniero, a journalist in Tierra del Fuego, told the Herald that an assembly was held on Friday at the doors of the factory of BGH, an Argentine electronics company.

“They were voting on a general strike in the whole province, because up to now there has been an indefinite strike of the metalworkers,” Piniero said. “They are deciding on a provincial strike of government and private workers’ unions. The province is rejecting this tariff cut — the governor, lawmakers, and the mayors of the three cities are all united on this,” he added.

A decades-long promotion regime

Tierra del Fuego, Argentina’s southernmost province, benefits from an industrial promotion regime that started in 1972, which includes a tariff and VAT exemption on supplies’ import. Cell phones, AC units, and TV sets are the main products manufactured in the province. A report published in 2023 by the Fundar think tank states that the total cost of the promotion regime is around US$1 billion a year, around 0.22% of the country’s gross domestic product.

The regime has been criticized for the fact that factories in the province only assemble cell phone parts, and do not add any technology to the final product. According to the Fundar report, this is true in the case of cell phones, but not regarding AC units and TV sets.

The think tank also suggested that the national government should gradually reduce the tax and tariff exemptions. As a result, they claim, “the production of cell phones in Tierra del Fuego would cease completely — they would be completely imported — and 61% of the current production of TVs and 28% of AC units would continue.” However, while Fundar proposed to reduce all exemptions gradually by 2035, the government announced it would cut them completely by next year.