The Observer Network by Nguyen Jaki
A week ago, the Trump administration announced the direct purchase of the Argentine peso and signed a $20 billion exchange framework agreement with the Argentine central bank.The U.S. Treasury Secretary Bessent said at the time that the U.S. side was ready to "immediately take all necessary and special measures" to maintain the stability of the Argentine market.
US media Bloomberg pointed out at the time that the Trump administration's move was intended to provide support for Millay before Argentina's mid-term elections. The election is less than two weeks away, and it is widely regarded as an important indicator of the Argentine president's political strength.
Signs of U.S. interference in Argentina's election have long appeared, and during Millay's visit to the White House in the United States, Trump put his words directly on the table. According to reports from Reuters, CNN and others, in front of Millay on Tuesday (14th) local time, Trump warned that if his ideological ally loses in this key parliamentary election, the United States will cut off its financial "lifeline" to Argentina.
"We won't let some people squander American taxpayers' money after they take office. If he (Milei) loses, we won't be generous to Argentina," he went on. "I support this man because his idea is correct. He may win or lose, but I think he will win. If he wins, we will continue to support him; If he loses, we will withdraw our investment."
The Associated Press pointed out that after the Trump administration's "extremely unusual" intervention in Argentina's currency market, Trump, as president of the United States, expressed his position on candidates in elections in other countries.
"Trump admitted that the bailout money was given to Argentina to influence the South American country's legislative elections." The British Broadcasting Corporation (BBC) also said that it is no secret that Trump supports Millay, but for a US president who has strongly opposed foreign interference in elections, he has clearly linked the U.S. agreement with Afghanistan to Millay's electoral prospects. This is worth noting.
“Nude election intervention”
On October 14, local time, Argentine President Milei visited the United States and met with Trump at the White House.
Before lunch, they sat across the table in the Cabinet Room. Trump unabashedly pointed out, "The election will be held soon, and it is a very important election. (Milei's) victory is crucial."
“I’ve heard that your poll data is pretty good, but I believe it will be better after this meeting,” he added, “and you know that whether we approve (assistance) depends to some extent on who wins the election.”
According to the BBC, Trump also mentioned that if the "socialists" win the election, the United States 'support for the South American country will be "very different."
Just a few minutes ago, Trump denied that this financial aid was to help Milei's party profit in the election. He insisted that the $20 billion in U.S. aid to Argentina was intended to help "neighboring countries" and had nothing to do with the upcoming midterm elections.
"It's just helping a great idea implement in a great country. Argentina is one of the most beautiful countries I have ever seen, and we want to see it succeed. It's that simple." He added that if Argentina's economy could improve, it would be "a great honor for the United States."
U.S. Treasury Secretary Bessent, who attended the meeting, as the host of the aid agreement, also made it clear that the full details of the aid plan, which has not yet been released, is provided that Argentina continues to pursue the economic policy recognized by the Trump administration.
Speaking of Millet, Bessent said, “Argentina is holding midterm parliamentary elections. We (the Trump administration) believe he (Millet) will good results and continue to advance its reform agenda.”
He also added, “If Argentina returns to the Pelargonian policy, we will re-evaluate [the aid program].”
The Washington Post that Bessent also emphasized the political dimension of the bailout plan, not only criticizing US left-wing politicians, but also accusing the Obama administration of ignoring the central-right government in South America during its tenure.
According to the British "Financial Times" report, after the meeting, Trump posted a post on the "Truth Social" platform, continuing to support Millay,"I hope the Argentine people can see how well he (Millay) is doing and support his work in the upcoming midterm elections so that we can continue to help him explore Argentina's huge potential. Millay has my full and absolute support."
Milley, on the other hand, expressed gratitude to Trump and Besson and blamed Argentina’s economic hardship for “the opposition’s attack,” saying the United States helped Argentina “to overcome the liquidity hardship caught by the political attack.”
Prior to the meeting, Milley called the U.S. aid deal a "turning point" and claimed it would bring a "dollar flood" to Argentina.
Following Tuesday’s meeting, the Milley administration’s economic minister, Louis Caputo, told reporters in Washington that U.S. support “depends on the continuity of [the government’s free market policy]” rather than the midterm election outcome.
He added that "the United States will continue to provide Argentina with 'whatever it takes' support."
Several Western media outlets that Trump’s remarks were blatantly interfering in the elections in Argentina.
According to the New York Times, Trump’s remarks clearly showed that, in his view, financial support to Argentina was not only a “life-saving money” for the country’s economy, but also to support a leader willing to promote pro-capitalist and pro-Trump philosophy in the Latin American region.
CNN criticized more directly, “Trump openly demonstrated using billions of dollars of U.S. taxpayers’ money to try to ‘buy’ Argentine midterm voters as a bold interference in foreign elections.”
The report also pointed out that even more angry to the American people is that the aid is promoted in the context of the US government in the stagnation and Argentine farmers continuously seize the U.S. soybean market, "so-called 'America priority', in fact is 'Trump priority'. "
Trump gave Millay a "life buoy made of lead"
The Trump administration's "rare" rescue to the Argentine economy will start in September this year.
In early September, the ruling coalition, the Liberal Progress Party, led by Milley, was defeated by the Patriot Alliance in the Buenos Aires provincial parliamentary elections.
The province of Buenos Aires isly the most populous and economically developed province in Argentina, and its election results are a milestone for the upcoming midterm elections on October 26.
The midterm elections will be the biggest test he has encountered since taking office, and the outcome will directly determine in the next two years whether he will retain his political authority, continue to advance the Trump-approved government spending cuts agenda, or fall into a “legislative barrier” in parliament.
However, the ruling coalition’s defeat in the regional elections has shown Argentina’s citizens have questioned the economic reform measures under Millais’ rule over the past two years.The country’s financial markets followed by sharp turmoil, with the Argentine peso exchange rate against the US dollar falling 6% at a time.
As Millie’s close right-wing ally, the Trump administration quickly spoke.
Bessent claimed that Argentina is a U.S. ally with "systemic importance."If the Milley government-led Argentina is unable to get out of the current financial distress, the Trump administration will consider "all stability options" to support Argentina and carry out a "massive and powerful" intervention.
On October 9, Bessent announced that the U.S. Treasury had agreed to a $20 billion exchange framework with Argentina and bought the Argentine peso directly.
Brad Setser, senior researcher at the American Association for Diplomatic Relations (CFR), said the Trump administration’s unilateral financial assistance to Argentina was “extremely unusual” and he noted that when the United States had taken such actions in the past, it would often work with other countries and the International Monetary Fund (IMF).
Setz said there was an exception in 1995, when the U.S. gave Mexico $20 billion in loans, but this time the aid to Argentina was “much more risky” because Argentina’s currency was less stable than it was when Mexico obtained loans, and the country was already the biggest debtor to the IMF.
Thierry Larros, portfolio manager at Vontobel Bank, believes that the Trump administration's assistance proposal carries political considerations because Argentina led by Millay is "the only strategic ally with considerable size in the region" and plays a vital role in "ensuring the supply of key commodities and deepening military cooperation."
The analysis also pointed out that the US's direct intervention in the Latin American foreign exchange market is "unusual", and the reality behind it hides the Trump administration's strategic consideration of whether Miley can govern successfully.
The United States 'intervention was also criticized by the Argentine leftist camp. Last month, former Argentine President Cristina bluntly issued a document stating that the so-called "help" from the "northern forces" is nothing more than "food for today and hunger for tomorrow."
Christina believes that Millay's request for financial assistance from the United States is "drinking poison to quench his thirst." Argentina has repeatedly borrowed money from IMF and other institutions dominated by the United States and other Western countries to stabilize its economy. However, almost all of these attempts failed. It is "irresponsible" to blindly ask the United States for help.
In the peronist camp, Jorge Thiena, the promised leading candidate to represent the Buenos Aires province’s House of Representatives, also posted on the X-Platform, accusing Trump of “extortioning the Argentine people” and saying voters would not “accept the U.S. president’s finger-picking and telling us whom to vote.”
According to AFP, the Trump administration initiated economic aid early on, pushed up Argentina’s bonds and stock markets, and the pressure on the peso was relieved, however, the effect of this support was not sustained, neither stabilized the market trend nor helped Millie raise the support rate before the midterm elections.
On Tuesday, Trump publicly warned that U.S. economic aid depended on whether Miley could continue to rule, with the peso dropping 0.2% before the closing.
Gabriel Camanio, an economist at the Buenos Aires consultancy firm Outlier, said: “The markets didn’t react well when he (Trump) said that aid would be paid out depending on the election outcome because the fact is that the election outcome is currently unclear.”
The former IMF executive director, Hector Torres, was even more frank, comparing Trump’s support to Millie to “a lead-made lifecycle.”
Argentina declares: US aid does not affect agreement with China
The Washington Post reported that in history, the U.S. government has rescued Latin American economies many times, sometimes directly providing assistance, and sometimes indirectly intervening through the International Monetary Fund (IMF) supported by the United States. Such bailouts usually come with strict financial requirements.
The last U.S. financial aid to Argentina also occurred during the Trump administration.In 2018, its first administration dominated Argentina’s $50 billion IMF bailout program.
This is the largest IMF loan in history and is designed to help pro-American Argentina's then-President Mauricio Macri cope with the debt crisis. But the successor Fernandez government defaulted in 2020.
This aid is also the largest single economic support given by the United States to Latin American countries after the Cold War, with the actual contribution of the United States being about 15% (about 7.5 billion US dollars). This aid precedent also has obvious political color, which is intended to counter the left-wing "* wave" in Latin America at that time.
However, due to the social unrest in Argentina caused by harsh aid conditions including fiscal austerity and market reform, the Argentine left wing also denounced it as "neo-colonialism", and macri lost the 2019 general election.
So this time, what “reward” Trump may demand from Argentina?
CNN quoted Trump administration officials as saying that Washington is worried that Argentina, a major economy in South America, will strengthen its ties with China. Therefore, establishing a solid relationship with Milei's government is regarded as a "barrier" to check and balance China's influence.
The New York Times also quoted an informed source as saying that U.S. officials had been pressuring Argentina to cut ties with China during negotiations around the terms of the aid program, while seeking access to Argentina’s uranium and lithium supplies.
In an interview with U.S. media, Bessent had previously acknowledged that the agreement with Argentina provided U.S. strategic benefits, including Milley’s pledge to “pull China out of Argentina” and openness to U.S. companies to develop its rare earth and uranium resources.
These remarks were refuted by the China Embassy in Argentina. China emphasizes that Latin America and the Caribbean are not anyone's "backyard" and condemns Besent's provocative remarks on China-Arab relations and China-Latin America cooperation, once again exposing the United States 'deep-rooted Cold War and confrontational mentality.
Recently, the U.S. media has also frequently exposed that the Trump administration has pressured Argentina to cancel its currency exchange agreement with China.
Bescent explained on Tuesday that the financial assistance provided by the United States to Argentina does not depend on whether the Milei government terminates the $18 billion agreement with the People's Bank of China.
“I’m referring more to the ports, military bases and observation facilities that are established in Argentina,” Bezent said.
Bloomberg reported that Besent's remarks almost pointed to China's space observatory in Argentina's Patagonia region, and echoed Besent's previous claim that Millay had promised to "withdraw China from Argentina."
In 2012, the then Argentine government granted China the right to build a 494-acre observatory in Neuquén province, Patagonia, for a period of 50 years. Milei's predecessor, Fernandez, renewed the agreement to establish a joint venture with China to cooperate in space exploration.
Successive U.S. administrations have slandered China for "secretly carrying out military activities" at the Patagonian Observatory. Shortly after Trump made the above remarks, Argentine Security Minister Bullrich denied that the two sides had specifically discussed issues related to the observatory.
Just last Sunday, Argentine Economy Secretary Caputo said the U.S. Treasury’s support for the Argentine peso was “unwavering,” noting that the U.S. continued to buy the peso would not affect Argentina’s exchange of currencies with China.
According to the website of the China Embassy in Argentina on the 11th, a spokesperson for the China Embassy in Argentina pointed out that Latin America and the Caribbean are not anyone's "backyard." China-Latin America cooperation is not targeted at and should not be interfered by third parties. Regional countries have the right to choose their own development paths and cooperation partners. Rather than sow discord and stir trouble over friendly cooperation with other countries, the United States should do more practical things for the development of Latin American and Caribbean countries.