Trump’s Strong Support for Argentine Amidst Economic Crisis
On September 23, 2025, President Donald Trump pledged his unstinting support for Argentine President Javier Milei, coming hot on the heels of the U.S. administration’s statement that ‘all options’ were being considered for an economic rescue operation for Argentina. The Latin American nation had found itself in the throes of an economic crisis, with Trump and Milei discussing potential solutions on the margins of the United Nations General Assembly in New York. U.S. Treasury Secretary Scott Bessent promptly expressed readiness to provide up to US$20 billion in aid via bond purchases and currency swaps, showcasing the Trump Administration’s proactivity in international affairs.
The question on everyone’s minds – why did President Milei find himself seeking the aid of the U.S.? How would a U.S bailout for Argentina transpire? The situation that ignited talks of U.S. involvement was the sudden crash in value of Argentina’s currency, the peso, accompanied by a plunge in the country’s stock and bond values. This downward spiral, packed into a tense three-day period ending September 19, saw the Argentine central bank expend over a billion dollars of its foreign-currency reserves to prevent the peso from depreciating further.
Argentina’s fear was twofold – a steeper fall in the peso could bring back the specter of rampant inflation, while it was crucial for the country to hold on to their International Monetary Fund (IMF) reserves to service close to $20 billion in debt payment obligations due over the next year and a quarter. How did Argentina find itself in this economic debacle? The root cause can be traced back to the monetary and fiscal policies of Milei’s predecessor, in office until December 2023. Some could argue that previous administration’s approach in incorporating business-unfriendly regulations wasn’t the wisest
President Javier Milei not only had to grapple with an economic crisis but also experienced a political setback in the legislative elections on Sept. 7, 2025. A stagnating economy, coupled with job shrinkage and escalating unemployment numbers, translated into a desperate need for Trump’s political and financial backing. Trump’s support was not just required to stabilize local financial markets but to reaffirm a sense of order and control.
The United States has previously demonstrated immense support for Argentina, leveraging its powerful positions on the board of directors at key institutions like the IMF, World Bank, and the Inter-American Development Bank. This established partnership was earlier instrumented to aid Argentina in securing commitments and dispensation of billion-dollar loans. Following Trump’s promise, Bessent’s timely confirmation instilled a renewed sense of faith in both local and overseas investors, reigniting the Argentine financial markets.
Typically, the U.S. government doesn’t directly intervene in foreign bailouts unless the nation in question holds significant systemic importance, i.e., its trials could impact neighboring countries, multiply across various nations, or negatively influence the United States. In an extraordinary move, Bessent declared Argentina to hold such importance, even though its challenges hadn’t yet spilled over to other nations.
The primary route for the intended loan to salvage Argentina’s currency is likely through the Treasury’s Exchange Stabilization Fund, a crucial tool in Treasury’s arsenal to mitigate financial crises. Historically, before the U.S. currency transitioned to a free-floating regime post the 1980s, the main objective of the fund was to channel resources for Treasury operations directly impacting the dollar’s value.
It’s worth noting that the last loan from the Exchange Stabilization Fund was accorded to Uruguay in mid-2002, in the aftermath of a major financial meltdown in neighboring Argentina that precipitated a bank run in Uruguay, threatening to ripple through the region. This past event presents a compelling case for Trump’s administration’s prudent outlook on Argentina’s current scenario. The administration’s proactive approach not only demonstrates their commitment to international economic stability but also their unwillingness to allow history to repeat itself.