A new survey shows that 73.3% of Argentine industrial SMEs that perceive an import threat identify China as the primary source, signaling a major shift in supply-chain dynamics for overseas chemical and raw-material suppliers. The findings, from the Q2 2025 survey by Fundación Observatorio PyME, highlight rising import substitution and competitive pressures that could reshape sourcing strategies for foreign exporters targeting Argentina.
Import threat landscape
According to the survey, conducted from June 24 to July 16, 2025, among 407 manufacturing SMEs across Argentina, 45% of industrial firms report facing an import threat, while 33% say they have lost domestic market share to foreign products—both figures at historical highs. Brazil ranks second as a risk origin with 16.6% of mentions, far behind China. Other origins include Paraguay (1.7%), Chile (0.6%), the European Union (0.9%), the United States and Canada (0.6%), India (0.6%), Southeast Asia (2.1%), and the rest of Asia (0.5%).
Sector-specific impact on chemicals and plastics
In the chemicals, rubber, and plastics sector, 47% of firms report an import threat, with 72% pointing to China as the main source. The metalworking industry shows 59% of companies at risk, 86% citing China. In textiles and apparel, 61% face threats, 63% linked to China. Furniture and wood products see 41% risk, 77% attributing it to China. These figures underscore that Chinese industrial chemicals, polymers, and intermediates are increasingly displacing local production.
Competitive dynamics and compliance concerns
Among threatened firms, 45% detect unfair competition, 34.5% say imported goods do not meet local technical standards, and 17.1% report irregular entry via smuggling. In chemicals, rubber, and plastics, 49% cite unfair competition, 25.5% non-compliance with technical norms, and 17.4% smuggling. This suggests that overseas chemical exporters may face heightened scrutiny on regulatory compliance and trade enforcement in Argentina.
Substitution trends and buyer strategy
In Q2 2025, 22% of manufacturing SMEs replaced local inputs, raw materials, and intermediate goods with imports, while 10% substituted finished goods. In chemicals, rubber, and plastics, 29% replaced inputs and 7.5% finished goods. A case in point: thermos maker Lumilagro now sources 60% of its products from China under its own design and quality control, with the remaining 40% made locally. Commercial manager Carlos Bender told Infobae, "This is re-adapt or die. We have people in China producing with Lumilagro design, and the first container is arriving."
What buyers should watch
Overseas chemical suppliers to Argentina should monitor rising import substitution and cost-cutting strategies among SMEs. With 67% of firms focusing on cost reduction—including increasing imported content—demand for competitively priced Chinese industrial chemicals, solvents, and polymers may grow. However, compliance risks and potential trade barriers could emerge as local industries push for stricter enforcement of technical standards and anti-dumping measures.
Broader economic context
The survey also reveals weak domestic demand, with 68% of firms concerned and production down 1.3% year-on-year in Q2 2025. Costs rose 33% year-on-year, outpacing nominal sales growth of 27%. Despite a 9.3% year-on-year increase in the Manufacturing Industrial Production Index (IPIM) in June 2025, seasonally adjusted activity fell 1.2% month-on-month, interrupting two months of expansion. The trend-cycle series contracted 0.5% monthly for four consecutive months.
Source: Read the original report | Published: August 09, 2025