On October 14, Argentina’s right-wing president, Javier Milei, met with his US counterpart, Donald Trump in Washington. Milei, who arrived in the US capital in the early hours of the morning, hoped to secure a strategic financial bailout of almost USD 20 billion that Trump would sponsor to stabilize the economy, which has been struggling under Argentina’s libertarian government.

Traveling alongside Milei were Karina Milei, the president’s sister and secretary general of the presidency; Patricia Bullrich, minister of security; and Santiago Bausili, head of the Central Bank. Among the topics discussed were the trade relationship between the two countries and China’s influence in Argentina.

Trump saves Milei

“Today we directly purchased Argentine pesos,” said US Treasury Secretary Scott Bessent in a post on X on October 9.

He described Argentina’s economic crisis as a “moment of acute illiquidity” in an otherwise “prudent financial strategy” that only the United States can and must save from collapse.

The South American nation has “strong economic fundamentals” and the structural reforms already underway will “generate significant dollar-denominated exports and foreign exchange reserves,” Bessent said.

The treasury secretary noted that the IMF also supports Milei’s economic policy.

Additionally, Bessent affirmed: “We have finalized a USD 20 billion currency swap framework with Argentina’s central bank. The US Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets. I emphasized to Minister Caputo that President Donald Trump’s America First economic leadership is committed to strengthening our allies who welcome fair trade and American investment … The Trump administration is resolute in our support for allies of the United States, and to that end, we also discussed Argentina’s investment incentives and US tools to powerfully support investment in our strategic partners.”

Thus, the United States hopes to save the Argentine economy, which – despite the promises of Milei, an economist who for years has become an ideologue of the most radical neoliberalism – is faltering due to a lack of dollars. The orthodox program of reducing the size of the state, privatizing public companies, and cutting back on public policies has managed to improve certain economic indicators, such as the fiscal deficit, but for now it has run into a snag that, apparently, only the prodigious help of the United States can save.

Argentina has lost a large amount of money, causing several investors to begin selling their assets and, consequently, triggering a crisis of monetary illiquidity. With the agreement, Milei secures a historic injection of dollars that the IMF could not have offered him so quickly, considering that last April it already loaned Buenos Aires several billion.

Read More: Milei takes on USD 20 billion in IMF debt and lifts the exchange rate cap

Help or blackmail?

This is of particular interest in view of the upcoming elections in Argentina on October 26; it should not be forgotten that Milei’s party already lost the last elections to Peronism (likely the most significant political force in Argentina over the last 70 years based on social justice, nationalism, and sovereignty) by a landslide. This was acknowledged by President Trump himself at a bilateral press conference, who made future economic aid conditional on Milei’s election victory: “The elections are coming very soon, and it is a very big election that will be watched by the world because [Milei] has done an incredible job, and with that comes some pain. I think the victory is very important … If a socialist, or in the case of New York City, a communist, wins, you feel a lot different about making an investment … If Milei doesn’t win … we will not be generous with Argentina if that happens.”

Trump has received heavy criticism for sponsoring Milei’s bailout, especially from some of his supporters who hoped that the slogan “America First” would materializein an opposite scenario. In addition, several US farmers have complained about Trump’s support, as Argentine soybeans compete with their production and, with this agreement, large landowners based in Argentina could benefit.

For his part, Milei, who has aligned his foreign policy almost mimically behind Washington’s, posted on X: “Thank you very much, President Trump, for receiving me at the White House. Since before becoming president, I have maintained that the Argentine Republic should be a strategic ally of the United States of America, and now that the Argentine people have entrusted me to guide the destiny of our country, fulfilling that promise is another step in the direction we set out on December 10, 2023: Make Argentina Great Again (MAGA). The support that you and your great country have given us is vitally important for the continuity of the long road of reforms we have embarked upon. Argentines know that the world’s leading power will continue to support us unless we return to populism. The situation is crystal clear: if the country strays from the path of freedom and returns to populism, the United States will cease to support our country. Otherwise, they will continue to stand by us.

Without a doubt, Milei’s hope is that long-awaited economic stability will translate into political stability that will allow him to get through the upcoming elections. However, this will be difficult for the government, given the latest polls showing growing discontent among the population over the rising cost of living, the latest corruption scandals (involving Milei’s own sister), and spending cuts that are already affecting millions of students, retirees, single mothers, etc.

Thus, Milei has bet big on Washington, just as Trump and his administration have bet big on the libertarian president. It will soon become clear whether this bet will allow Washington to maintain a totally loyal ally in South America or whether, on the contrary, Milei’s neoliberal project will be undermined by Argentina’s social and economic reality.

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