Cheaper Computers Coming?

[ElQueso]

I was browsing BubbleAR and came across this article, published a couple of days ago:

http://www.thebubble...puters-in-2017/

According to the article, the government is going to abolish the 35% tax on computer products imported to Argentina. According to the first part of the first paragraph, though:

The rumor has become a reality. According to press reports, the government has officially made the decision to eliminate the 35 percent tax on computer imports, a measure that would lower its prices by at least 12 percent for consumers.

Of course, to me, 12% doesn't make much of a real difference, although it's nice to see any lowering of prices. According to the InfoBae article linked to in the above link:

"Con esta medida, los precios de las computadoras bajarían al menos un 12 por ciento. No tiene mucho margen más, porque el 50% del precio es comercializazión [sic] y financiamento", aseguró una empresa del sector.

So half of the price of something like this (or are we talking about all imported products?) are doubly priced because of marketing and finance costs and not in a large part due to a 35% tariff??? (not to mention that individual importers, i.e., people like us, have to pay 50% in taxes) I'm really not understanding how, even with existing marketing and financing costs, which will not go up, I'd think, just because import taxes were suddenly taken out, the price would not fall by the straight 35%?

So something that costs $10,000 pesos now will be dropped to 8,800 pesos. Not insignificant, to be sure, but I'd rather see $6500!!

I'm assuming that in order to pay for these "marketing and financing" costs we will continue to be offered old products as well, to attempt to keep the price down?

Seems to me that the government is handing local import businesses an additional 23% profit? Or maybe I just don't understand how this market works. Must be tied up in inflation, that other 23%.

 

[jantango]

Someone always has to pay a price in these situation, and it's the workers in this case:

Not everyone is as happy as we are though. The Metal Workers’ Union (UOM) and over 15 IT companies were quick to warn this is practically a death sentence for the jobs of 5,500 people, 1,000 of whom work in the assembly lines in southernmost Tierra del Fuego province.

I was going to post the link and saw you posted already. The weekly Bubble newsletter that arrives by email every Monday morning is required reading for BAexpats who want to be informed.

 

[Noesdeayer]

jantango:
While you were quoting from the Bubble-La voz que ellos que no tienen voz pero en ingles-which seems to be a favorite source of yours, you might have continued a little bit further in the same article which went on to correctly state that the workforce displaced would be reassigned to assembling products in which Argentina was more competetive like household appliances.
Speaking about more competetive the Argentine Unions might take the time to learn a thing or two about competetion itself..So that their compatriots stop streaming over the border in droves into Chile to buy the aforementioned products at way cheaper prices and quality.

 

[ElQueso]

It is something that drives me crazy, this idea that we need the government, or large groups of people with unions, to basically set the price on things for "protection" of local markets. Though if it's going to happen, I do like what Macri proposed, as Noesdeayer mentions, that those jobs will be converted over to something else that in this case is more competitive. In that case it will help out both the consumer and the workers/companies (as if anyone here cares about the companies!).

One of the biggest problems I have with government or union interference in cases like this is that it never allows the market to adjust to real conditions, but rather causes all kinds of problems with resource allocations (economic, material and human) because those two entities in particular are never willing to change, for various and also similar reasons. If unions and government would be reasonable about changing to meet changing needs, I might be a little less anti-government and union, but both depend on making one group of people happy at the cost of another group (or groups) of people in order to be powerful in their respective slots and decisions are made politically (as to who can get those people re-elected), not economically (which would probably be more helpful to more people).

I still don't understand why the prices for computer equipment can't be 35% less instead of just 12%...

 

[another]

To ElQueso - the only explanation would be that the 35% tax is imposed on the actual cost of the product not on the other 'collateral' costs as well.
As for the government - sindicatos had have and will have any elected government by the balls - it's a peronistic aberration and the only way to deal with it would be to abolish them overnight, which is impossible to implement and enforce because it will cause an uprising and a civil war, they are completely unaware of the fact that unions a la argentine no longer exist nor should exist anywhere else in the world. The country will never have any real economy nor productivity due to enormous sense of entitlement people have had for generations and not necessarily due to malignancy or laziness but rather a lack of work culture created by the excess of handouts and a total ignorance of the basic rules of a free market - if any market is ever completely free. Alas...

 

[scotttswan]

Someone always has to pay a price in these situation, and it's the workers in this case:

Not everyone is as happy as we are though. The Metal Workers’ Union (UOM) and over 15 IT companies were quick to warn this is practically a death sentence for the jobs of 5,500 people, 1,000 of whom work in the assembly lines in southernmost Tierra del Fuego province.

I was going to post the link and saw you posted already. The weekly Bubble newsletter that arrives by email every Monday morning is required reading for BAexpats who want to be informed.

The assembly lines in Tierra del Fuego are a waste of time, they don't manufacture anything, just put together the assembly boxes that are sent over from China. (assembly boxes that are generally assembled and then disassembled in China for countries like Argentina who have stupid taxes and laws requiring X is made here.)

 

[RodalfoWalsh]

The assembly lines in Tierra del Fuego are a waste of time, they don't manufacture anything, just put together the assembly boxes that are sent over from China. (assembly boxes that are generally assembled and then disassembled in China for countries like Argentina who have stupid taxes and laws requiring X is made here.)

Not to mention the damage to the planet from all the redundant shipping.

Tierra del Fuego is a portrait of crony capitalism at woek

 

[glasgowjohn]

any truth in the rumor that nothing is asssembled in TDF? One of my Argie geek mates claims the only thing thye do is stick a stamp saying assembled in TDF . He insists the product arrives already asembled and all they do is change the box....

 

[syngirl]

The weekly Bubble newsletter that arrives by email every Monday morning is required reading for BAexpats who want to be informed.

Really? I think the quality is going way down hill with every week that progresses. It is clickbait journalism with more and more content produced by interns with extremely little experience and time in the country and/or latin america. It's unfortunate, it started out very promising but the quality is getting progressively worse.

 

[wineguy999]

Really? I think the quality is going way down hill with every week that progresses. It is clickbait journalism with more and more content produced by interns with extremely little experience and time in the country and/or latin america. It's unfortunate, it started out very promising but the quality is getting progressively worse.

How funny to see your comment now. I just read a piece this morning, and was so tempted to edit the copy for grammar and spelling. Problem is, that's the way of "journalism" anymore. I can't refer to a single source born online that gives a damn about spelling, grammar, or style. Maybe because the audience mostly doesn't know better themselves.