The Trump administration moved forward on Thursday with its bailout of Argentina, making a direct purchase of pesos and finalizing terms of a $20 billion lifeline, Treasury Secretary Scott Bessent said.
The terms and conditions of the economic support package were not announced, but Mr. Bessent said the funds would come in the form of a currency swap with Argentina’s central bank. Big global investors have been anxiously awaiting the details of the bailout, which critics have said will benefit wealthy fund managers at a time when American farmers are struggling and the U.S. government is shut down.
Officials from both countries spent the last four days racing to finalize terms of the bailout ahead of high-stakes legislative elections in Argentina later this month and a visit to Washington next week by President Javier Milei, Argentina’s libertarian leader who is a close ally of President Trump.
“Argentina faces a moment of acute illiquidity,” Mr. Bessent wrote on X. “The U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets.”
The Treasury secretary added that American business leaders have told him that they want to deepen ties with Argentina and that the Trump administration will stand behind its Latin American ally.
But the administration’s decision to rescue Argentina’s economy is raising concerns about whether the real aim is to help rich investors whose bets on Argentina could falter if its economy sinks.
Those efforts have been complicated by the fact that major hedge funds, including those led by friends of Mr. Bessent, stand to benefit financially from an Argentina economic lifeline. Funds at investment firms including BlackRock, Fidelity and Pimco are heavily invested in Argentina, as are investors such as Stanley Druckenmiller and Robert Citrone, both of whom worked with Mr. Bessent when he was an investor for George Soros.
The Treasury’s intervention on Thursday offered a lifeline to Argentina’s financial markets, which have floundered as the country has faced a severe cash crunch. Dollar-denominated bonds set to expire in 2035 rebounded to levels last seen when Mr. Bessent first announced the United States would be stepping in. The peso also rebounded, although currency experts worry that it will soon come under pressure again without a longer-term fix for the country’s financial woes.
The prospect that the Trump administration would rescue Argentina’s economy and aid wealthy investors at a time when federal workers aren’t getting paid amid a shutdown and struggling American farmers are awaiting an economic relief package has drawn criticism from Democrats, farm industry groups and others.
On Thursday, a group of eight Democratic senators introduced legislation that would prevent the Treasury Department from using its Exchange Stabilization Fund to shore up Argentina’s finances.
“It is inexplicable that President Trump is propping up a foreign government, while he shuts down our own,” said Senator Elizabeth Warren of Massachusetts, the top Democrat on the banking committee, who helped draft the legislation. “Trump promised ‘America First,’ but he’s putting himself and his billionaire buddies first and sticking Americans with the bill.”
The legislation is unlikely to pass, but it demonstrates the political headwinds that Republicans could be facing over Argentina.
Ahead of his meeting with Luis Caputo, Argentina’s economy minister, Mr. Bessent insisted last weekend that the proposed $20 billion central bank swap line did not amount to a bailout of Argentina or a gift to wealthy investors.
“This trope that we’re helping out wealthy Americans with interest down there couldn’t be more false,” Mr. Bessent told CNBC. “What we’re doing is maintaining a U.S. strategic interest in the Western Hemisphere.”
International investors have long looked at Argentina as a place to make a profit, particularly related to government debt that successive leaders have taken on. In many instances, investors are not the original bondholders, but have bought at a discount from the nation’s original lenders, and are wagering that the liens will eventually be repaid or renegotiated.
That view is beginning to pay off. One Fidelity fund this summer credited winnings from the country’s debt with helping compensate for losses from investments in other so-called emerging market countries including Venezuela and Ukraine.
In particular, wealthy Americans with close ties to Mr. Bessent stand to win big.
Mr. Druckenmiller was a mentor to Mr. Bessent at Soros Fund Management. The Duquesne family office, which he runs, was the second largest investor in Argentina’s principal exchange-traded fund, a pool of Argentine stocks.
Mr. Citrone, the founder of Discovery Capital Management, has made Latin America his biggest bet in the world, and Argentina is the fund’s biggest investment in the region. Mr. Citrone has said that when he worked with Mr. Bessent under Mr. Soros in 2013, he convinced them to make their now famous bet against the Japanese yen and that he was responsible for most of the bonus that Mr. Bessent earned.
“I kind of convinced George and Scott Bessent at the time to go big on that. And, you know, Scott says I’m responsible for 75 percent of his bonus at Soros, kind of jokingly, over that time,” Mr. Citrone said in an interview on a podcast hosted by Goldman Sachs in May, according to the transcript posted on the bank’s website.
It is unclear if Mr. Citrone played any role in convincing Mr. Bessent to prop up Argentina’s currency. But two people familiar with the deal said Mr. Citrone was in close contact with Mr. Bessent in the lead-up to the Treasury announcement last month, arguing that if Argentina’s currency crashed, so too would the political fortunes of Mr. Milei.
Mr. Citrone told Mr. Bessent that if Mr. Milei were to lose the upcoming elections, Argentina would pivot to China for more economic assistance, according to one of the people familiar with the contacts. Mr. Citrone also apparently told Mr. Bessent that such an outcome would mean the United States could lose one of its most steadfast Latin American allies.
A Treasury Department spokesman, Elliott Hulse, did not respond to requests for comment about Mr. Bessent’s conversations about Argentina with Mr. Druckenmiller or Mr. Citrone. A spokesman for Mr. Citrone declined to comment. Mr. Druckenmiller said that he had no communication with Mr. Bessent about Argentina before or after last month’s bailout announcement.
Argentine media reported earlier on Mr. Bessent’s ties to Mr. Citrone.
Mr. Milei’s party suffered a devastating loss in a key provincial election in September, and analysts are projecting that his party will face another disappointing result in legislative polls later this month. Such a loss would likely prevent Mr. Milei from continuing his pro-market, austerity-focused plans, which Mr. Trump’s administration has praised and, in many ways, replicated.
Some conservative observers were critical of Treasury’s plans to support Argentina, arguing that the deal could instead end up supporting the country’s leftist, pro-spending political opposition, which is likely to sweep polls later this month.
Mr. Citrone and leaders of the Conservative Political Action Conference, better known as CPAC, may have also been instrumental in lobbying both the International Monetary Fund and Mr. Bessent to bail out Argentina, according to the two people familiar with the agreement. In April, the I.M.F. shored up Argentina’s economy with its own $20 billion bailout agreement. The 48-month loan was Argentina’s 23rd such economic support package from the fund since the 1950s.
Just days after the I.M.F. deal was announced in April, Mr. Citrone flew down to Buenos Aires to meet with Mr. Milei on a plane owned by one of the leaders of Tactic Global, known as CPAC’s lobbying arm, according to an adviser to the Trump administration and Argentine media reports. The plane was owned by Leonardo Scatturice, one of the founders of Tactic, who has made a fortune off lucrative government contracts doled out by Mr. Milei’s government.
Mr. Citrone met with the Argentine president just hours before Mr. Bessent, who had flown separately to the country’s capital.
During that visit, Mr. Bessent announced the I.M.F. deal. Those funds are intended to help Argentina loosen its currency controls while maintaining the government’s plans to scale back subsidies and spending.
Last month, Mr. Bessent said the United States would provide more economic support to Argentina in the form of a $20 billion financial lifeline. The Treasury secretary added that Washington hoped the additional support would prevent Argentina from giving up mining rights to China. Argentina’s economy has largely been propped up over the years by an $18 billion currency swap provided by China.
The United States has not said if there will be any guardrails to protect taxpayer money. Mr. Bessent emphasized that the currency swap the government plans to offer Argentina does not amount to a bailout.
“We are not putting money into Argentina,” Mr. Bessent told CNBC.
The politics of supporting Argentina has become especially fraught in the United States because China has been buying soybeans from Argentine farmers instead of American growers this year. The fact that Argentina is the most frequent recipient of I.M.F. bailouts and also the institution’s largest debtor raises questions about whether it could ever repay the United States.
“They can call it what they want, but it’s a bailout,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics. “It’s a country in crisis, it’s running out of dollars, and the U.S. is giving the country dollars. That’s a bailout by definition.”
In negotiations over the terms of a support package, U.S. officials have been pushing for Argentina to scale back ties with China and have been seeking access to its uranium and lithium supplies, according to a person familiar with the matter.
In Argentina, legislators and governors have more say in those contracts than Mr. Milei does, and the U.S. Treasury’s support for the Argentine president may not translate into more American companies securing mining rights.
Mr. Bessent said on Thursday that bolstering Argentina is a matter of national and economic security.
“The success of Argentina’s reform agenda is of systemic importance, and a strong, stable Argentina which helps anchor a prosperous Western Hemisphere is in the strategic interest of the United States,” Mr. Bessent said.
Rob Copeland and Colby Smith contributed reporting from New York. Lucía Cholakian Herrera reported from Buenos Aires.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
Maria Abi-Habib is an investigative correspondent reporting on Latin America and is based in Mexico City.
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