The closure of FATE, Argentina's only tire manufacturer, underscores a significant shift in the business landscape due to increased imports, which have rendered local production less viable. Many companies find it more economical to import products than to deal with high operational and labor costs. This trend has seen several firms either shut down or downsize their operations recently, reflecting a broader economic issue affecting domestic manufacturing.

In 2025, imports of light vehicle tires surged by 42%, while heavy vehicle imports increased by 38%, according to data from Analytica. Currently, imported tires account for 75% of the market in Argentina. Chinese manufacturers, who dominate the global tire production sector with 22% of the world’s output, saw their share of imports flow into Argentina rise from around 10% a decade ago to 42% today. This shift in import dynamics also signifies a major change from Brazilian suppliers, who once made up over 60% of the import market.

The surge in imports is attributed to a combination of factors including a reduction in tariffs from 35% to 16%—aligning with those of other countries where tariffs hover between 10% and 15%—and the removal of the Import Tax. As a result, local producers are grappling with the challenge of competing against cheaper imported goods, thus posing a threat to the local manufacturing sector and raising concerns about job losses and long-term economic sustainability in Argentina.