Donald Trump recently expressed strong support for Javier Milei, Argentina’s president, highlighting the challenges Milei faces. During a meeting in New York, Trump stated, “We’re backing him 100%. We think he’s done a fantastic job. Like us, he inherited a mess.” The U.S. is reportedly prepared to offer substantial financial assistance to Argentina as the nation teeters on the brink of another financial crisis. U.S. Treasury Secretary Scott Bessent indicated that the Federal Reserve may provide Buenos Aires with a $20 billion dollar swap line or potentially purchase Argentine bonds.
Historically, U.S. administrations have provided support for Argentine governments, but Trump’s direct involvement underscores a strategic use of economic resources to bolster an ideological ally. Milei came to power two years ago amid public discontent with the economic status quo and has since undertaken an agenda reminiscent of previous radical economic policies.
Milei prioritizes addressing Argentina’s inflation crisis, which has reached alarming rates, peaking at over 25% monthly shortly after he assumed office. His economic strategies involve aggressive measures such as cuts in public spending, a reduction in trade union rights, and extensive privatizations, which some compare to Margaret Thatcher’s policies in the UK.
Despite lacking a solid parliamentary base, Milei has implemented significant cuts to pensions and public sector wages, resulting in the loss of more than 48,000 public sector jobs. His approach has garnered approval from the International Monetary Fund (IMF), which granted Argentina a $20 billion lifeline earlier this year.
However, critics argue that Milei’s economic reforms have adversely affected the quality of life for many citizens. Rising unemployment, increasing household debts, and cuts to social programs have compounded the challenges faced by the population, particularly affecting women in the workforce.
Milei’s strategy has also included maintaining a fixed exchange rate for the peso, which has historically led to economic instability in Argentina. The central bank recently struggled to support the peso amid a political climate marked by corruption allegations against Milei’s family. While markets stabilized following U.S. assurances of support, many experts caution that Argentina faces a tumultuous future as Milei navigates impending midterm elections.
Source: https://www.theguardian.com/business/2025/sep/28/why-trump-is-backing-argentinas-thatcherite-economics