Trump
Dangles $20 Billion Lifeline for Argentina, With Strings Attached
President
Trump said the economic support is contingent on whether his political ally,
President Javier Milei of Argentina, remains in power.
Zolan
Kanno-YoungsAlan Rappeport
By Zolan
Kanno-Youngs and Alan Rappeport
Reporting
from Washington
Oct. 14,
2025
President
Trump said on Tuesday that Washington’s $20 billion bailout for Argentina comes
with strings attached — namely, that the ruling party of his ally, President
Javier Milei of Argentina, must prevail in the country’s legislative elections
this month.
“If he
loses, we are not going to be generous with Argentina,” Mr. Trump told
reporters at the White House, where he was meeting with Mr. Milei. Just minutes
earlier, Mr. Trump had denied the economic lifeline was meant to help Mr.
Milei’s party in the elections.
“I think
he’s going to win,” Mr. Trump added. “And if he wins, we’re staying with him,
and if he doesn’t win, we’re gone.”
Mr.
Trump’s comments made clear that he viewed the financial support for Argentina
as a lifeline not just for the country’s economy, but also for a leader willing
to spread his pro-capitalist — and pro-Trump — ideology in Latin America.
“Just
helping a great philosophy take over a great country,” Mr. Trump said, adding
that financial success of Argentina would be a “great feather in the cap of the
U.S.A.”
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Mr.
Trump’s bailout of Argentina has come with political blowback at home.
Democrats have seized on the bailout to accuse Mr. Trump of helping out a
foreign government and wealthy investors while the U.S. government remains shut
down because of a dispute over extending health care subsidies.
Major
hedge funds, including those led by friends of Treasury Secretary Scott
Bessent, could benefit financially from the bailout. Funds at investment firms
including BlackRock, Fidelity and Pimco are heavily invested in Argentina, as
are investors who worked with Mr. Bessent when he was an investor for George
Soros.
“President
Trump seems to think it’s more important to offer $20 billion to bail out
Argentina than it is to make a bipartisan deal to prevent health insurance
premiums from spiking for over 20 million Americans in a matter of days,”
Senator Jeanne Shaheen, the top Democrat on the Foreign Relations Committee,
said in a statement.
American
farmers have also criticized the move, given that China has been buying
soybeans from Argentine farmers instead of American growers this year. Mr.
Trump on Tuesday said he believed China was trying to drive a wedge between the
United States and Argentina by buying soybeans from Latin America.
Mr.
Bessent has defended the administration’s economic support for Argentina,
arguing that it could help stabilize the Western Hemisphere and that it is an
investment that U.S. business leaders have sought to deepen ties with
Argentina. He added that providing U.S. support to Mr. Milei’s opponents, who
are not willing to enact a suite of economic changes, would be a waste of
money.
The
face-to-face meeting between Mr. Trump and Mr. Milei comes after the Trump
administration agreed to provide Argentina a $20 billion lifeline that would
come in the form of a currency swap with the nation’s central bank. The details
of the bailout remain unclear, but it could provide a political boost for Mr.
Milei, who is hoping to stave off a financial crisis and a political disaster
for his party.
The
conditioning of the U.S. support on the electoral success of a political ally,
rather than strictly the risk of a financial collapse that could hurt an
economic partner, was highly unusual, according to economists.
Barry
Eichengreen, an economist at the University of California, Berkeley, said the
Clinton administration had stepped in to help Mexico avoid a financial crisis,
but the motivation then was to help stabilize the economy of a trading partner.
When that administration provided an emergency loan to South Korea in 1998, it
was meant to prevent the collapse of a financial system, not to influence the
outcome of an election.
“In both
cases, there was a significant risk of financial contagion to other countries,
which is not the case of Argentina today,” Mr. Eichengreen said. “In both
cases, the U.S. was significantly exposed to instability in the subject country
either economically or financially. Neither condition applies today in
Argentina.”
In
Argentina, however, Mr. Trump has found a leader that amounts to a political
kindred spirit. He has described the Argentine leader as his “favorite
president,” and Mr. Milei was one of only two world leaders onstage at Mr.
Trump’s inauguration.
A
government bailout would typically be handled through the International
Monetary Fund, which would establish a framework for the nation in financial
duress. The I.M.F. has provided Argentina with more than 20 economic support
packages since the 1950s, including as recently as this April. However, its
economy has continued to lurch from crisis to crisis.
Zolan
Kanno-Youngs is a White House correspondent for The Times, covering President
Trump and his administration.
Alan
Rappeport is an economic policy reporter for The Times, based in Washington. He
covers the Treasury Department and writes about taxes, trade and fiscal
matters.
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