In a cheap clothing store in Miami Sea poke, four Argentines rummage through racks, choose clothes without entering a fitting room and build a steep mountain in the shopping cart.
“We came to buy clothes in the United States because the prices are much lower than in Argentina,” says Macarena, 29, on her first day of visiting the city.
For Argentines who can travel abroad, buying clothes in Miami – or closer, in Santiago de Chile – has become one of the main incentives when getting on a plane.
“Before traveling, I organized my expenses to bring enough money and considered the space I had to leave in the suitcase to return with the clothes I would buy,” adds Macarena.
While they fill their shopping cart in Miami, in Argentina many make use of their worn-out pants, go to used stores and resort to financing in installments with high interest to renew their clothing.
According to a report from the Argentine Ministry of Commerce from March of last year, Argentina is the country with the most expensive clothing in the region.
The study found that a T-shirt from an international brand can cost 95% more in the country than in Brazil, before the reduction in import tariffs on textile products ordered by Javier Milei’s government.
For several years now, clothing prices in Argentina have been a topic of discussion that divides Argentinians.
At the beginning of this year, the Minister of Economy, Luis Caputo, sparked a controversy by saying: “I never bought clothes in Argentina because it was theft.” And he added that the high price of clothing “harms those who have the least (money).”
According to a report by the consulting firm Fundar, clothing prices in Argentina are higher, on average, than in the region. However, although everyone agrees that clothes “are expensive,” the solution is not the same for everyone.
While for the textile sector the key is to lower taxes and protect it with a higher exchange rate, for Javier Milei’s government the best way is to open the economy to imported products, including from China.
The president of the Argentine Industrial Chamber of Clothing, Claudio Drescher, defines this moment as the “destruction of the textile industry in Argentina.”
But why do clothes cost more in this country?
Taxes on the sector
“More than half of the price a consumer pays for a garment produced in the country corresponds to taxes,” Drescher tells BBC Mundo.
According to the representative of the textile sector, the value of each garment includes a chain of taxes that begin with 21% of the value added tax (VAT), an indirect national tariff that applies to the consumption of goods and that constitutes the fundamental source of revenue for the State.
This chain continues with the 1.2% check tax, which is the tax that is paid in each change of hands of money between banks, which was created in 2001 on a temporary basis but has been in force for more than 24 years in Argentina.
“This is a tax that the rest of the countries do not usually have,” explains Juan Carlos Hallak, doctor in Economics from Harvard University and professor of International Economics at the University of Buenos Aires, to BBC Mundo.
“It is a cascade tax. This means that if you sell a screw, which then goes to a part and then to a machine, you pay this tax three times,” adds Hallak, who in turn directed the Undersecretary of International Insertion of the government of Mauricio Macri (2015-2019).
To the list of tariffs, 1.8% is added if the garment is paid by the customer with a card and, if it is financed in installments – as happens in almost 90% of clothing purchases in the country – almost 15% of the financing cost is added.
“A garment made in Argentina that is sold in the country costs between 25% and 30% more than if we sold that same garment in Chile,” says Drescher.
According to data from the Argentine Industrial Chamber of Clothing, the sale of Argentine brands fell on average by 38% in the last 18 months, which led to the closure of more than 1,600 commercial premises.
In addition, more than 10,000 registered workers who were in charge of making clothing lost their jobs. Specialists estimate that the textile sector generates 300,000 jobs in the country.
The government claims that “it is false that jobs are being lost.”
Milei argued last week in a business forum that what occurs is a “reallocation of the labor factor” and that those workers who are left unemployed can “move faster” towards other more competitive sectors of the economy.
Since Milei took office, the government has lowered 24 taxes. However, the measures did not target the textile industry, but rather other sectors of the economy.
“The government lowered internal taxes on products such as luxury cars. In my opinion, in this transitional circumstance that Argentina is experiencing, it would have been preferable to lower the tax on the check,” says Hallak.
Opening to imports
The high price of clothing is not explained only by the high tax burden and the so-called “exchange delay,” which makes products made in Argentina expensive both inside and outside the country.
It also responds to the barrier to clothing imports that has been in place for years in Argentina and that the current government is raising, according to specialists.
Before the Milei government, clothing made abroad had a 35% tariff to enter the country.
“In general, countries have import tariffs, but those that Argentina had for textiles were quite high,” Hallak explains about the protections for the textile industry.
The current government has said that this protection policy turns some Argentine businessmen into “zoo hunters,” that is, producers who, lacking external competition, can determine prices.
For this reason, last year the government announced a reduction in tariffs on imported clothing and footwear entering the country from abroad, which went from 35% to 20%, “with the aim of lowering local prices and increasing competition.”
“Argentina continues to be the country with the most expensive clothing in the region and in the world,” said Minister Caputo when announcing the measure. “We continue to reduce taxes and tariffs to encourage competition and continue to lower inflation,” he added.
In addition to reducing tariffs, the government enabled small international purchases via courierthat is, the system that allows you to buy products from your home in a store on-line from outside.
Many Argentines celebrated the possibility of making purchases on-line in brands like the Chinese Shein, because this way they can access clothing at a much lower price than those produced in Argentina, something completely new in the country.
Macarena, the Argentine tourist shopping in Miami, still doesn’t dare to buy clothes from home that come directly from China, but she says she wants to do it because her friends already did it and it turned out “perfect.”
But in addition to lowering import tariffs and enabling electronic commerce, the government lifted the so-called “non-automatic import licenses” to liberalize trade.
Thus, it reversed the decision of the previous government of Alberto Fernández, which had established mandatory authorizations for importers. A non-tariff measure that aimed to restrict the entry of certain products from abroad.
That is, for a foreign company to import clothing to Argentina it had to request a special permit.
“That led to discretionary regulations. If you have the possibility of giving permits, you decide who you give them to and who you don’t,” explains Hallak.
Effects on prices
Thus, the recent measures promoted by the government caused a shock in the Argentine textile sector.
According to the Argentine Industrial Chamber of Clothing, clothing increased by 15% last year, well below the year-on-year inflation of 33% as of February 2026, which generated a drop in local clothing production of 15% in the last year.
For representatives of the sector, the opening of exports added to high taxes, the decline in local consumption and the “expensive dollar” make Argentine products uncompetitive.
Or, as the Argentines say, it makes them play with “the pitch inclined.” That is, competing at a disadvantage with products that come mainly from China, such as those from Shein or Temu.
Last week, President Milei insisted on his policy of openness.
“We are not going to do (produce) everything, we are going to do some things and those in which we are better. In those that we are bad, we are not going to have likelihood,” Milei said at the end of April before a group of businessmen from Argentina.
Milei stated that the lack of competitiveness of the textile industry compared to China has not so much to do with costs, but with innovation.
“Italy has higher salaries than us and yet it has a textile industry. How is that? They compete by design. They have to find a way around it,” said the Argentine president.
“Blaming the designers, for us to go out of our way to be competitive with China, seems to me to be a perversity that I have never seen in my life,” responded the renowned Argentine fashion designer Benito Fernández.
For Hallak, the opening is a good sign for the Argentine economy in the long term, but he questions the speed with which the changes are being implemented.
“It is a violent import opening in a very lively sector. Putting too much pressure on this sector at once, without giving it time to reconvert, could be a mistake,” says the economist.
Hallak recommends giving the textile industry more time to implement reforms and thus be able to compete with imported products in those areas in which they can be competitive.
“All of this takes time. If it is done quickly and abruptly, they will end up killing companies that could have survived, could have converted and have opted for competitiveness,” he concludes.
Meanwhile, Argentines like Macarena manage to renew their wardrobe.
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