Trump Wades Into Bailout Politics in Offering a Lifeline to Argentina.
reasury Secretary Scott Bessent said this week that if New York City needed a federal bailout under the leadership of the mayoral candidate Zohran Mamdani, it would be rebuffed by the Trump administration with two words.
“Drop dead,” Mr. Bessent said in an interview on Fox Business.
But Argentina is a different story. The Treasury Department has been working to prop up its sputtering economy, and on Wednesday Mr. Bessent declared that the United States was ready to extend a $20 billion lifeline.
The moves are intended to buttress the fortunes of Javier Milei, Argentina’s embattled president, whom President Trump sees as a kindred political spirit.
By offering economic support to Argentina, the Trump administration is wading into the precarious politics of bailouts, which Republicans traditionally loathe. By using America’s economic power to influence another country’s election, the president is tying the United States to the financial fate of Argentina, which has been plagued for decades with surging inflation and rampant debt.
The moves have been rebuked by American agriculture groups whose members have been hurt by Mr. Trump’s trade war with China and are anxiously waiting for economic support.
China stopped buying American agricultural products such as soybeans after Mr. Trump’s decision to impose tariffs on Chinese imports. Instead, China has been purchasing soybeans from Brazil and Argentina, where they are now less expensive than U.S. soybeans because of China’s retaliatory tariffs, raising fears across rural America of a looming farm crisis.
Some Republicans also expressed their reservations about the bailout. Senator Charles E. Grassley of Iowa said on social media that the Trump administration should be fighting for American soybean farmers as it negotiates with Argentina. “Why would USA help bail out Argentina while they take American soybean producers’ biggest market???” Mr. Grassley wrote on X on Thursday.
Argentina’s economy has been facing its own crises for decades. The value of its currency, the peso, has fallen in recent weeks amid concerns about Mr. Milei’s grip on government. Last week, its central bank spent more than $1 billion to shore up the peso and keep its exchange rate with the dollar below the ceiling set earlier this year in a $20 billion agreement with the International Monetary Fund.
The U.S. support is intended to restore confidence in Argentina’s economy and bolster Mr. Milei after his party lost badly in a recent local election and faces critical legislative elections next month. Mr. Trump views Mr. Milei, who describes himself as a radical libertarian, as a political ally. 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.
Source: nytimes
