Argentina’s presidential frontrunner could disrupt country’s commodity sectors
- August 18, 2023
- Posted by: Quatro Strategies
- Categories: Americas, Mining & Metals
Javier Milei, the candidate leading the race for Argentina’s presidency, could potentially disrupt the country’s major commodity industries if elected. Argentina is a significant exporter of crops, beef, lithium, and other resources. Milei’s proposed policies include scrapping taxes on farm exports, which would make Argentine agricultural products more competitive globally. He has also advocated for adopting the US dollar as the country’s currency, aiming to stabilize the economy and international trade.
Milei’s support is particularly strong in agricultural regions like the Pampas farm belt, where farmers are looking for policies that promote growth and production. However, concerns exist about his ability to effectively govern, implement radical policies, and navigate challenges posed by powerful trade unions and social leaders.
In addition to his focus on agriculture, Milei’s campaign manifesto mentions promoting investments in oil and lithium sectors. He plans to re-privatize YPF SA, the state-run oil company, to boost competition and development in the shale-rich Vaca Muerta region. His approach aims to increase competition by lowering export barriers and removing price caps on fuel.
Milei’s stance on lithium is less clear, but he has expressed skepticism about nationalizing the metal or interfering with its supply and prices. His commitment to free markets could mean less direct state support for a local battery industry, instead relying on tax cuts and more flexible labor laws to encourage value-added manufacturing within Argentina.
Some observers believe that other candidates might be better suited to maintaining the social cohesion necessary for investments, particularly in sectors like mining. Milei’s radical proposals have sparked division, with supporters seeing his ideas as necessary changes and opponents expressing concerns about their feasibility and potential impact on stability.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You'll get daily industry insights on
Energy, Cleantech, Oil & Gas, Mining, Defense, Aviation, Construction, Transportation, Online Retail, Bigtech, Finance and Politics of Business
Read more insights
Beijing’s Taiwan pressure is building toward a 2028 flashpoint
Something ominous is developing in the western Pacific, with the Chinese Coast Guard’s recent demands that ships in international waters near eastern Taiwan identify their points of origin and destination signaling Beijing’s assertion of a right to police the maritime traffic near Taiwan and potentially previewing a major crisis that could arrive within a year or two.
The incident, in which China contacted three vessels without stopping them, represents the kind of incremental assertion of authority that could presage the customs quarantine scenario that analysts increasingly view as the most likely form of a coming Taiwan confrontation.
China’s trade outlook darkens despite pre-tariff export boost
China’s export growth accelerated in March as manufacturers rushed to get goods out the door ahead of a fresh wave of sweeping U.S. tariffs ordered by President Donald Trump — even as the widening trade war casts a deepening shadow over the country’s economic prospects.
Trade data show a 4.4% year-on-year rise in exports, nearly double the 2.3% increase seen during the first two months of the year. That surge would reflect a wave of so-called “frontloading,” as Chinese firms scrambled to ship products before U.S. import duties spiked.
Asia’s energy shock falls hardest where the lights are dimmest
Economic damage is usually measured in aggregates that obscure who bears it. GDP forecasts, inflation prints and import bills describe national averages, and averages have a way of hiding the fact that a shock landing on a capital city and a shock landing on a farming province are not the same event.
There is one dataset that does not average, because it records physical activity where it happens: the light emitted from the earth’s surface at night. The picture it produced is the most direct evidence yet of where the cost of the Iran conflict is actually falling.