On Oct. 9, U.S. Treasury Secretary Scott Bessent put on quite a show announcing that the Trump administration is coming to the aid of Argentina’s President Javier Milei, to ensure his government can make it to the Oct. 26 midterm legislation elections without collapsing. The country’s financial crisis was so dire that the peso was near collapse and Argentina’s Treasury had just about run out of dollars to throw onto the markets to defend it.
After huddling with the entire Argentine economics team in Washington for the past week, Bessent reported that the U.S. Treasury had taken the unprecedented step of using an account it holds at Santander Bank to purchase an unspecified amount of Argentine pesos in the local market, to boost its value. Additionally, Bessent said, an agreement had been finalized for a $20 billion currency swap “framework” about which few specifics have been made available, although it apparently will include the use of the IMF’s Special Drawing Rights.
But in his statements on Oct. 9, Bessent made clear that geopolitics is at the heart of the U.S.-Argentine relationship and that Argentina has no sovereign control over its economy. As he told Fox News’ Laura Ingraham, Milei “has committed himself to getting China out of Argentina which) is all over the place in Latin America” and he is coming to the Oval Office on Oct. 14 to coordinate strategy with Trump. Removal of China from the Western Hemisphere is a goal of the Trump administration’s new defense strategy, but China is Argentina’s second largest trading partner, after Brazil, and any attempt to “get rid” of it would be economic suicide.
