As Argentina grappled with mounting economic instability, President Trump stepped in with a $20 billion financial lifeline for President Javier Milei, a leader he has publicly praised as his “favorite president.” However, the assistance came with a controversial condition: Milei’s party needed to secure a win in the upcoming legislative elections for the aid to proceed. n nTrump made the stipulation explicit during Milei’s visit to the White House, stating, “If he doesn’t win, we’re gone. If he loses, we are not going to be generous with Argentina.” These remarks quickly ignited a political firestorm in Argentina, where many interpreted the comments as an overreach into the nation’s democratic process. n nMarkets reacted sharply—the peso plunged as investors began offloading the currency amid fears of instability. Milei’s political rivals denounced the arrangement as economic coercion, urging citizens to resist his administration in the upcoming vote. Meanwhile, Milei’s government scrambled to reassure the public that U.S. support would not vanish based on electoral results. n nAnalysts suggest that Trump’s approach reflects a broader pattern of leveraging economic incentives to shape political outcomes in Latin America. The situation underscores the precarious position Milei is in, tying his nation’s financial survival to the unpredictable nature of foreign political alliances. n n”Trump may have undermined his own ally—by offering both excessive and insufficient support,” said Benjamin Gedan, director of the Latin America Program at the Stimson Center. n nThe U.S. Treasury had previously taken the rare step of intervening by pledging to purchase billions in Argentine pesos, aiming to prevent economic collapse. Milei’s trip to Washington was intended to showcase this alliance and boost domestic confidence. Instead, Trump’s framing turned what could have been seen as solidarity into something resembling pressure. n n”What might have been viewed as assistance came across as coercion due to how Trump presented it,” noted Lucas Romero, head of the polling firm Synopsis. n nPublic sentiment in Argentina remains skeptical of U.S. involvement. Recent surveys indicate over 60 percent of Argentines hold an unfavorable view of Trump. In response, Milei’s national security minister, Patricia Bullrich, attempted to downplay the remarks, claiming Trump was expressing a general philosophy rather than linking aid directly to the October election. n n”Trump was speaking about principles, not the upcoming vote,” she stated, urging calm in financial markets. n nThis is not the first time Trump’s interventions have backfired. His use of trade penalties against Brazil in support of former President Jair Bolsonaro failed to prevent conviction on coup-related charges. Similarly, leaders aligned with Trump in Canada and Australia have faced electoral defeats, while opponents have gained traction—a trend dubbed the “anti-Trump bump.” n nMilei, elected in 2023 on a platform to overhaul Argentina’s struggling economy, entered the October 26 legislative race with weakening support. Despite progress in curbing inflation and reducing budget deficits, he has struggled to revive growth or resolve deep-rooted financial issues. Legislative resistance, coupled with corruption allegations involving his sister and top advisor, has further weakened his standing. n nA recent provincial election loss triggered a crisis of confidence, prompting capital flight and fears of default—a recurring issue in Argentina’s economic history. The U.S. intervention via a $20 billion currency swap was framed as a strategic move to protect both Milei’s reform agenda and regional stability. Officials stated they were prepared to do “what is necessary” to prevent market forces from derailing reforms. n nHowever, the deal has stirred discontent among American farmers. With China shifting soybean purchases from the U.S. to Argentina, American agricultural producers face growing hardship. n nHistorically, U.S. financial aid has been reserved for major trade partners facing crises with cross-border implications. Argentina does not rank among them. Yet Trump has championed Milei’s free-market policies, calling him a fellow advocate of the “Make America Great Again” movement and hoping his model spreads across Latin America. n nWhether the U.S. will fully deliver on the promised currency swap remains uncertain. The agreement would provide critical foreign reserves to Argentina’s central bank, but its implementation hinges on volatile political dynamics. n— news from The New York Times
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Trump Helped Argentina Face an Economic Meltdown. It Came At a Cost.
As President Javier Milei of Argentina faced a deepening economic crisis, President Trump rushed to the rescue of his political ally with a generous $20 billion bailout. n nThen came the fine print. n nTo secure help from the United States, Mr. Trump made clear on Tuesday, Mr. Milei’s embattled political party would have to first pull off a victory in what are emerging as momentous and challenging legislative elections this month. n n“If he doesn’t win, we’re gone,” Mr. Trump said as he welcomed Mr. Milei, who he has called his “favorite president,” to the White House. “If he loses, we are not going to be generous with Argentina.” n nIn Argentina, those comments were taken by many as a clear attempt by Mr. Trump to put his thumb on a sovereign country’s electoral process. n nThe fallout was swift. The peso tumbled as investors went on a panicked selling spree of Argentina’s currency. Mr. Milei’s political opponents railed against what they called American extortion, urging voters to reject his party at the polls. And Mr. Milei’s government rushed to try to assure Argentines that Mr. Trump wouldn’t abandon the nation based on Mr. Milei’s political fortunes. n nTo many, Mr. Trump’s conditional economic support represented yet another attempt to influence, through economic sticks and carrots, the internal affairs of another Latin American country. The turmoil that followed also highlighted the risks Mr. Milei faces as he shackles his political fortunes, and Argentina’s economic future, to America’s deep pockets and Mr. Trump’s fickle friendship. n n“Trump might have sabotaged his favorite president — by both giving him too much support and too little support,” said Benjamin Gedan, a senior fellow and director of the Latin America Program at the Stimson Center, a nonprofit in Washington. n nHis bet seemed to pay off last month when the U.S. Treasury made the highly unusual move of stepping in to help Argentina stave off an economic meltdown by promising to buy billions of dollars worth of Argentine pesos. n nMr. Milei’s trip to Washington this week was meant to be a victory lap highlighting his close ties with Mr. Trump and bolstering confidence in his leadership among voters back home. n nYet, rather than a key lifeline, Mr. Trump’s help may have backfired. “What could have been interpreted as help, the way Trump phrased it ended up sounding more like extortion,” said Lucas Romero, a political consultant, who runs Synopsis, a local polling firm. n nArgentines wary of American meddling in their affairs could punish Mr. Milei at the polls. Surveys earlier this month showed that more than 60 percent of Argentines have a negative view of Mr. Trump. n nOn Tuesday, Mr. Milei’s national security minister, Patricia Bullrich, tried to walk back Mr. Trump’s comments, suggesting that he didn’t mean to hitch the bailout to the legislative contest. n n“Trump was talking about philosophy, not the October election,” she told a news channel. “Let the markets calm down, let everything continue as usual and not fall into panic.” n nThis is not the first time that Mr. Trump’s efforts to save an ally have triggered a fierce backlash. He used tariffs and sanctions against Brazil to try to help former President Jair Bolsonaro avoid a prison sentence. Mr. Bolsonaro wound up convicted of plotting a coup to stay in office and faces a prison sentence. n nAnd in Canada, Australia and elsewhere, politicians aligned with the American president have also been punished at the polls, while those who have defied him have been catapulted to victory, a phenomenon that has become known as the “anti-Trump bump.” n nMr. Milei, who was elected in 2023 on promises to fix Argentina’s chronically troubled economy, already faced headwinds going into the legislative election on Oct. 26, in which his party needs to shore up more support if he is to push ahead with more spending cuts and other economic measures. n nIn recent months, both voters and investors had signaled that they may be growing impatient with Mr. Milei. n nWhile Mr. Milei has reined in inflation and slashed a bloated budget, he has struggled to jump-start Argentina’s stagnant economy and find solutions to the nation’s longstanding financial challenges. A defiant Congress has also pushed back on his budget plans, while corruption scandals ensnaring his sister and closest adviser have eroded Mr. Milei’s political credibility. n nWhen Mr. Milei’s party suffered a crushing defeat in a provincial election last month, he was suddenly faced with an economic meltdown, as investors abandoned Argentina’s currency amid worries that the South American nation, with its long history of defaulting on loans, may again struggle to make its debt payments. n nThen the U.S. Treasury made the highly unusual move of stepping in to help Argentina with a $20 billion currency swap, casting the decision as a way of protecting Mr. Milei’s economic vision and ensuring the stability of a strategic partner in Latin America. The U.S. Treasury said it was ready to do “what is needed” to stop markets from derailing Mr. Milei’s economic reforms. n nThe move has also angered U.S. farmers since China has been buying billions of dollars in soybeans from Argentine farmers and has stopped buying the commodity from the United States, fueling a crisis on American farms. n nThe United States has offered financial aid to foreign countries in the past, typically in rare cases when an important trade partner faces an economic crisis that threatens to spill across its borders. Argentina is not a major U.S. trading partner. n nStill, Mr. Trump has praised Mr. Milei’s economic approach, casting him as a political kindred spirit. “He’s MAGA all the way,” Mr. Trump said during Mr. Milei’s visit on Tuesday, adding that he hoped the Argentine leader’s economic ideas spread across Latin America. n nIt remains unclear whether the United States will follow through with its promises to help Argentina through the enormous currency swap, which would inject foreign currency that the nation’s central bank badly needs to stabilize the economy.