The announcement surprised the whole country: zero tariffs on grains and agricultural by-products, effective until October 31 or until reaching 7 billion dollars in declared sales. The decision came amid a tense economic climate, with the wholesale dollar at the limit of the exchange rate band and a Central Bank that had to sacrifice more than 1 billion dollars in just three days to contain the escalation.
The measure has a clear objective: to oxygenate the reserves, accelerate the liquidation of agriculture, and send a message of strength at a critical moment. With a political backdrop marked by the electoral defeat of La Libertad Avanza in the provinces and growing market distrust, the government needed a quick and forceful signal.
Reactions from the agricultural sector and markets
The agricultural sector was the first to benefit. Organizations such as the Argentine Rural Society celebrated the elimination of the tariffs as a historic gesture, although they pointed out that the temporary nature reduces predictability and that, more than a fundamental reform, it is a transitional relief.
The markets also responded immediately: Argentine bonds and stocks rose, and country risk slightly decreased. The initial effect met the official goal of conveying confidence and calming exchange rate volatility, although it remains to be seen if the momentum can be sustained over time.
A move with conditions
The innovation was not just the measure itself, but the way it was communicated. Presidential spokesperson Manuel Adorni was the one who first announced it on social media, before it was officially published in the Official Bulletin. The goal: to quickly establish the message and pressure exporters to liquidate without delays.
The decree set strict conditions: exporters must liquidate at least 90% of the foreign currency within three business days following the export sworn statement. Otherwise, the previous rates will be reapplied. The suspension includes soybeans, corn, wheat, sunflowers, sorghum, barley, and their derivatives, thus strengthening the bet on agro-exportation as an immediate lifeline.
The risks of the strategy
The fiscal cost is not negligible: according to official estimates, the measure could imply up to 1.5 billion dollars less in revenue this year. Still, the government bets that the accelerated inflow of foreign currency will compensate for the loss in a context of weakened reserves.
The real challenge, however, will come after October. The suspension expires in a few weeks and leaves open questions: will the tariffs return? Will the measure be extended? Or will a new definitive scheme be advanced? The answer will be decisive for Milei's relationship with the agricultural sector and with international markets.
Meanwhile, the Central Bank will have to rebuild reserves following its strong recent interventions. If the agricultural sector does not liquidate at the expected pace, pressure on the dollar may return more forcefully and jeopardize the effectiveness of the move.
A test of fire
The elimination of tariffs thus becomes a bold but risky bet. It may be remembered as the decision that allowed for some breathing space in a moment of maximum tension, or as a mere patch that exposed the structural limitations of the Argentine economy.
The only clear thing is that, with the economy at the limit, Milei decided to play hard. And in this game, time is working against him.
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