As President Javier Milei of Argentina faced a deepening economic crisis, President Trump rushed to the rescue of his political ally with a generous $20 billion bailout.
Then came the fine print.
To secure help from the United States, Mr. Trump made clear on Tuesday, Mr. Milei’s embattled political party would have to first pull off a victory in what are emerging as momentous and challenging legislative elections this month.
“If he doesn’t win, we’re gone,” Mr. Trump said as he welcomed Mr. Milei, who he has called his “favorite president,” to the White House. “If he loses, we are not going to be generous with Argentina.”
In Argentina, those comments were taken by many as a clear attempt by Mr. Trump to put his thumb on a sovereign country’s electoral process.
The fallout was swift. The peso tumbled as investors went on a panicked selling spree of Argentina’s currency. Mr. Milei’s political opponents railed against what they called American extortion, urging voters to reject his party at the polls. And Mr. Milei’s government rushed to try to assure Argentines that Mr. Trump wouldn’t abandon the nation based on Mr. Milei’s political fortunes.
To many, Mr. Trump’s conditional economic support represented yet another attempt to influence, through economic sticks and carrots, the internal affairs of another Latin American country. The turmoil that followed also highlighted the risks Mr. Milei faces as he shackles his political fortunes, and Argentina’s economic future, to America’s deep pockets and Mr. Trump’s fickle friendship.
“Trump might have sabotaged his favorite president — by both giving him too much support and too little support,” said Benjamin Gedan, a senior fellow and director of the Latin America Program at the Stimson Center, a nonprofit in Washington.
Mr. Milei, a self-described radical libertarian, has worked hard to earn Mr. Trump’s good graces. He has made more than a dozen trips to Washington over the last two years, consistently gushed about the American leader and mirrored much of his foreign policy and his attacks on “woke leftists.”
His bet seemed to pay off last month when the U.S. Treasury made the highly unusual move of stepping in to help Argentina stave off an economic meltdown by promising to buy billions of dollars worth of Argentine pesos.
Mr. Milei’s trip to Washington this week was meant to be a victory lap highlighting his close ties with Mr. Trump and bolstering confidence in his leadership among voters back home.
Yet, rather than a key lifeline, Mr. Trump’s help may have backfired. “What could have been interpreted as help, the way Trump phrased it ended up sounding more like extortion,” said Lucas Romero, a political consultant, who runs Synopsis, a local polling firm.
Argentines wary of American meddling in their affairs could punish Mr. Milei at the polls. Surveys earlier this month showed that more than 60 percent of Argentines have a negative view of Mr. Trump.
On Tuesday, Mr. Milei’s national security minister, Patricia Bullrich, tried to walk back Mr. Trump’s comments, suggesting that he didn’t mean to hitch the bailout to the legislative contest.
“Trump was talking about philosophy, not the October election,” she told a news channel. “Let the markets calm down, let everything continue as usual and not fall into panic.”
This is not the first time that Mr. Trump’s efforts to save an ally have triggered a fierce backlash. He used tariffs and sanctions against Brazil to try to help former President Jair Bolsonaro avoid a prison sentence. Mr. Bolsonaro wound up convicted of plotting a coup to stay in office and faces a prison sentence.
And in Canada, Australia and elsewhere, politicians aligned with the American president have also been punished at the polls, while those who have defied him have been catapulted to victory, a phenomenon that has become known as the “anti-Trump bump.”
Mr. Milei, who was elected in 2023 on promises to fix Argentina’s chronically troubled economy, already faced headwinds going into the legislative election on Oct. 26, in which his party needs to shore up more support if he is to push ahead with more spending cuts and other economic measures.
In recent months, both voters and investors had signaled that they may be growing impatient with Mr. Milei.
While Mr. Milei has reined in inflation and slashed a bloated budget, he has struggled to jump-start Argentina’s stagnant economy and find solutions to the nation’s longstanding financial challenges. A defiant Congress has also pushed back on his budget plans, while corruption scandals ensnaring his sister and closest adviser have eroded Mr. Milei’s political credibility.
When Mr. Milei’s party suffered a crushing defeat in a provincial election last month, he was suddenly faced with an economic meltdown, as investors abandoned Argentina’s currency amid worries that the South American nation, with its long history of defaulting on loans, may again struggle to make its debt payments.
Then the U.S. Treasury made the highly unusual move of stepping in to help Argentina with a $20 billion currency swap, casting the decision as a way of protecting Mr. Milei’s economic vision and ensuring the stability of a strategic partner in Latin America. The U.S. Treasury said it was ready to do “what is needed” to stop markets from derailing Mr. Milei’s economic reforms.
Mr. Trump’s plan to bail out Argentina has also touched off political blowback in the United States, with Democrats accusing Mr. Trump of helping a foreign country while the U.S. government remains shut down.
The move has also angered U.S. farmers since China has been buying billions of dollars in soybeans from Argentine farmers and has stopped buying the commodity from the United States, fueling a crisis on American farms.
The United States has offered financial aid to foreign countries in the past, typically in rare cases when an important trade partner faces an economic crisis that threatens to spill across its borders. Argentina is not a major U.S. trading partner.
Still, Mr. Trump has praised Mr. Milei’s economic approach, casting him as a political kindred spirit. “He’s MAGA all the way,” Mr. Trump said during Mr. Milei’s visit on Tuesday, adding that he hoped the Argentine leader’s economic ideas spread across Latin America.
It remains unclear whether the United States will follow through with its promises to help Argentina through the enormous currency swap, which would inject foreign currency that the nation’s central bank badly needs to stabilize the economy.
With less than two weeks to go before what amounts to a referendum on his policies, what is clear is that Mr. Milei must now convince Argentines, and Mr. Trump, to place their faith in his economic vision.
“It was already a hard slog,” Mr. Gedan said. “And this has made it much more challenging.”
Ana Ionova is a contributor to The Times based in Rio de Janeiro, covering Brazil and neighboring countries.
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