US President Donald Trump’s administration has thrown its support behind Argentina’s President Javier Milei in a bid to boost his chances in next week’s midterm elections – now all he has to do is win them.
Milei, 54, is heading into the home straight of the campaign trail with his sails boosted by strong winds from Washington, despite Trump appearing this week to condition the assistance on his ally winning the October 26 vote.
Argentina’s President travelled to the US capital off the back of a string of negative headlines, including scandals involving corruption and drug-trafficking, pushback in Congress and weeks of currency turbulence prompting interventions in the foreign exchange market.
Nevertheless, Trump hailed Milei as a “great leader” on Tuesday during a historic meeting at the White House – though the US president said that promised financial aid for Argentina is dependent on the results in this month’s midterm elections.
“Your poll numbers I hear are pretty good, but I think they’ll be better after this,” Trump said as he hosted right-wing Milei at the White House, days after his administration promised US$20 billion to prop up the peso.
“And you know, our approvals are somewhat subject to who wins the election, because if a socialist… wins you feel a lot differently about making an investment,” said the Republican leader, adding that the election is being “watched by the world.”
Trump threatened Argentine voters with withdrawing aid if his ally was defeated. “If he loses, we are not going to be generous with Argentina,” he warned.
“I’m with this man because his philosophy is correct. And he may win and he may not win – I think he’s going to win. And if he wins we are staying with him, and if he doesn’t win we are gone.”
Asked by reporters if Washington’s rescue package had any chance of failure, Trump responded: “Anything can fail.”
Government officials later pushed back on the interpretation of the remarks, stating that US support was guaranteed until Milei’s term in office ends in 2027.
Milei, making his first trip to the White House, in turn thanked his US counterpart for his support of the “free world” amid the “threat of 21st-century socialism around the world.”
He tried to appease market fears in a pre-recorded CNBC interview, reiterating that he had support for another two years. He also said that Trump’s aid package was intended to help his nation honour its debt.
Trump also hinted at talks over a bilateral trade deal at the White House meeting.
“We want to help Argentina,” he said. “One of the ways we can do, they have great product, and we used to do a lot of trade.”
Trump also said Argentina could trade with China, but should avoid doing “anything with the Chinese Armed Forces.”
Several government officials have denied reports that the US has asked Argentina to end its existing US$18-billion currency swap with China’s Central Bank, which was renewed last year.
On Sunday, Economy Minister Luis Caputo ruled out immediate plans to dollarise the economy or alter the floating exchange rate band, amid speculation of post-election changes.
“The United States is willing to keep buying pesos,” he said.
Assets swing
Argentine stocks surged Wednesday and sovereign bonds briefly spiked as US Treasury Secretary Scott Bessent confirmed that his department was working on the second US$20-billion “facility” for Argentina in as many months.
The new programme would take total promised US assistance for the country to a whopping US$40 billion.
Bessent told reporters in Washington that the new aid “would be adjacent to our [currency] swap line” announced in September, which already totalled US$20 billion.
He said the new bailout would come from “private banks and sovereign wealth funds” and would be “more aimed at the debt market,” amid growing concerns over Argentina’s ability to meet its looming debt repayments.
Bessent made the announcement a day after Trump hosted Milei at the White House.
Milei is heading into next week’s election diminished by a failure to stabilise Argentina’s ailing peso, despite spending the Central Bank’s dollar reserves to prop it up.
Bessent last week said that the US Treasury had also begun purchasing pesos to help support the currency. Those purchases continued midweek.
Milei is facing a growing rebellion in Congress over his austerity measures and is still reeling from a corruption scandal implicating his sister and right-hand woman, Karina Milei, and a media furore over ties between a suspected drug-trafficker and one of his former top candidates for lawmaker, José Luis Espert.
Last month, the ruling party suffered a morale-sapping defeat in a Buenos Aires Province regional election seen as a key bellwether of his support.
Opinion polls show his alliance running neck-and-neck with the centre-left opposition in the midterms, but Milei’s La Libertad Avanza coalition is expected to fall far short of winning an outright majority.
Although Bessent’s announcement helps dissipate some financial concerns ahead of the October 26 vote, it makes the results more binary, said Santiago Resico, an economist at local brokerage firm one618.
“The lack of clarity about US intentions regarding the aid package diminishes the importance of the size,” he said.
Political scientist Gustavo Marangoni, head of the M&R polling firm, said that Milei’s party had “no chance of winning a majority,” predicting he would win around one-third of the seats up for grabs.
This would still be an improvement on La Libertad Avanza’s existing numbers in Congress, where it finds itself in the minority in both chambers.
‘Quasi-colonial’
Economist Carlos Melconian, former president of the state-owned Banco Nación, reacted angrily to Trump’s remarks, calling it “a quasi-colonial incursion” into Argentina’s affairs.
“Trump doesn’t want to save the country, he only wants to save Milei,” said centrist Senator Martin Lousteau (Unión Cívica Radical) in a post on social media.
On Wednesday, Bessent assured that Milei would continue to enjoy US support as long as he could continue to veto legislation passed by Congress that did not fit his agenda.
“It is not election-specific, it is policy-specific,” he said. “So as long as Argentina continues enacting good policy, they will have US support,” he said.
Milei enacted massive budget cuts after taking office in December 2023 on a promise to quell chronically high inflation and revive the sputtering economy.
But his reforms left tens of thousands of public servants out of a job, caused consumer spending to nosedive and left many of Argentina’s most vulnerable citizens living on the breadline.
In an interview with CNBC broadcast Wednesday, the 54-year-old president said he had “no intention of changing course until the end of my term.”
“I am committed to the agenda of lowering taxes, deregulating and keeping the economy growing,” he said.
Speaking in a second interview with A24, Milei refused to comment further on US trade talks.
“We’re working, but I don’t want to announce it until the final touches are put on it. There are agreements on trade positions. It’s the preliminary phase [to a free-trade agreement],” he stated.
– TIMES/AFP/NA/PERFIL
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