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Trump Threatens to Pull Argentina Aid 10/15 06:04
President Donald Trump on Tuesday threatened to pull assistance for
Argentina -- led by a political kindred spirit whose philosophy is similar to
that of the Republican administration -- if the nation's internal politics
don't align with his interests in upcoming elections.
WASHINGTON (AP) -- President Donald Trump on Tuesday threatened to pull
assistance for Argentina -- led by a political kindred spirit whose philosophy
is similar to that of the Republican administration -- if the nation's internal
politics don't align with his interests in upcoming elections.
The comments came during a meeting with Argentine President Javier Milei,
whose country is set to hold midterm elections for its legislative body later
this month. U.S. presidents typically do not weigh in on the candidates in
other countries' democratic elections.
Referring to an opponent who was "extremely far-left" and encompassed a
"philosophy that got Argentina into this problem in the first place," Trump
warned that the United States wouldn't "waste our time" with largesse toward
Buenos Aires if Milei does not prevail. In addition to the midterms that will
be a referendum on his policies, Milei himself is up for reelection in 2027.
"We're not going to let somebody get into office and squander the taxpayer
money from this country. I'm not gonna let it happen," Trump said from the
Cabinet Room as he prepared to eat lunch with Milei. "If he loses, we are not
going to be generous with Argentina."
Even so, Trump insisted that the $20 billion assistance to Argentina, which
administration officials strenuously deny is a bailout, was about helping "our
neighbors" rather than any ties to the upcoming midterms.
"It's just helping a great philosophy take over a great country," the U.S.
president said. "Argentina is one of the most beautiful countries that I've
ever seen, and we want to see it succeed. It's very simple."
U.S. Treasury Secretary Scott Bessent added that the administration believed
Milei's coalition in the upcoming midterms would "do quite well and continue
his reform agenda."
As he opened his lunch with Milei, Trump noted that the Argentine president,
who is an economist by trade, is "MAGA all the way." That traditionally refers
to his campaign slogan, "Make America Great Again," but this time, it also
meant "Make Argentina Great Again."
Trump's meeting with Milei was already making waves back in Argentina, with
Cristina Fernandez de Kirchner, leader of the left-leaning Peronist opposition
and a two-term former president, writing on social media: "Trump to Milei: ?Our
agreements are subject to whoever wins election?. Argentines ... you know what
to do!"
The former president is serving a six-year sentence under house arrest since
June for corruption, but she remains the most influential leader of Peronism,
an ideologically flexible, labor rights-focused populist movement, which
emerged in the 1940s and dominated politics for decades.
Ahead of his White House meeting and during it Milei lavished praise on
Trump, deploying a tactic that has helped transform Milei's cash-strapped
country into one of the Trump administration's closest allies.
Milei, speaking in Spanish, said he is "very honored, especially in this
moment when we are giving thanks for Trump's great leadership."
"We can follow a peaceful route and make Argentina a strong example for
freedom and prosperity," Milei said.
That bromance has already paid off for Argentina -- most recently, to the
tune of a $20 billion bailout.
In a crisis, turning to Trump
The Trump administration made a highly unusual decision to intervene in
Argentina's currency market after Milei's party suffered a landslide loss in a
local election last month.
Along with setbacks in the opposition-dominated Congress, the party's
crushing defeat created a crisis of confidence as voters in Buenos Aires
Province registered their frustration with rising unemployment, contracting
economic activity and brewing corruption scandals.
Alarmed that this could herald the end of popular support for Milei's
free-market program, investors dumped Argentine bonds and sold off the peso.
Argentina's Treasury began hemorrhaging precious dollar reserves at a
feverish pace, trying shore up the currency and keep its exchange rate within
the trading band set as part of the country's recent $20 billion deal with the
International Monetary Fund.
But as the peso continued to slide, Milei grew desperate.
He met with Trump on Sept. 23 while in New York City for the United Nations
General Assembly. A flurry of back-slapping, hand-shaking and mutual flattery
between the two quickly gave way to Bessent publicly promising Argentina a
lifeline of $20 billion.
Markets cheered, and investors breathed a sigh of relief.
Timing is everything
In the days that followed, Argentine Economy Minister Luis Caputo spent
hours in meetings in Washington trying to seal the deal.
Reassurance came last Thursday, when Bessent announced that the U.S. would
allow Argentina to exchange up to $20 billion worth of pesos for an equal sum
in dollars. Saying that the success of Milei's program was "of systemic
importance," Bessent added that the U.S. Treasury directly purchased an
unspecified amount of pesos.
For the Trump administration, the timing was awkward as it struggles to
manage the optics of bailing out a nine-time serial defaulter in the middle of
a U.S. government shutdown that has led to mass layoffs. Democratic lawmakers
and other critics have slammed it as an example of Trump rewarding loyalists at
the expense of American taxpayers.
Later Thursday, Sen. Elizabeth Warren of Massachusetts -- who was singled
out during the White House meeting by both Bessent and Trump -- tried to
advance a bill that would block the $20 billion in U.S. assistance, but the
gambit failed in the Republican-controlled Senate.
Saying Trump was only aiding Argentina to help Milei, Warren said, "That's
Argentina first, not America first."
But for Argentina, the U.S. help came in the nick of time.
Aware of how a weak currency could threaten his flagship achievement of
taming inflation and hurt his popularity, Milei hopes to stave off what many
economists see as an inescapable currency devaluation until after the Oct. 26
midterm elections. A devaluation of the peso would likely fuel a resurgence in
inflation.
Talks also touch on artificial intelligence
Another topic that had been on the agenda was the Stargate project, which
would expand a network of massive artificial intelligence centers to Latin
America, according to a person with knowledge of the plans who was granted
anonymity to speak about private discussions.
Argentina could be home to Latin America's first Stargate, which is a joint
initiative from OpenAI, Oracle and SoftBank that will build a network of big
data centers that would power OpenAI's artificial intelligence technology. It's
an initiative that's been championed by Trump himself.
Milei also joined a ceremony at the White House honoring Charlie Kirk, the
prominent right-wing political activist who was fatally shot last month. Milei
often crossed paths with Kirk on the speaking circuit of the ascendant global
right.
There has been no word on how Argentina, the IMF's largest debtor, will end
up paying the U.S. back for this $20 billion, which comes on top of IMF's own
loan for the same amount in April. And that one came on top of an earlier IMF
loan for $40 billion.
Despite all the help, Milei's government already missed the IMF's early
targets for rebuilding currency reserves.
"The U.S. should be concerned that Argentina has had to return for $20
billion so quickly after getting $14 billion upfront from the IMF," said Brad
Setser, a former Treasury official now at the Council on Foreign Relations.
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