Argentine President Cristina Fernandez on Monday asked Congress to eliminate some of the taxes paid by biodiesel manufacturers in a bid to support an industry hard hit by European Union anti-dumping measures.
Argentine biodiesel exports are expected to plunge as much as 39 percent this year versus 2013 due to tariffs imposed by the European Union, according to theArgentine industry sources.
The tax cut would last only as long as Europe's sanctions do, according to the proposal.
"We are in a trade war," Fernandez said in announcing the measure, which will be sent to Congress in the days ahead.
It was the latest in a series of pragmatic policy shifts by Fernandez this year as she contends with high inflation and slow investment and growth in Latin America's No. 3 economy.
In the past three months she has cut heating gas subsidies and let the peso devalue by 18 percent. Fernandez has also earned kudos from investors by revamping the government's shoddy inflation reporting and agreeing to pay Spain's Repsol $5 billion for the 2012 nationalization of oil company YPF. (Reporting by Jorge Otaola and Hugh Bronstein; Editing by Bernard Orr)