In his second inaugural address, in January, Donald Trump could not have stated his intentions more clearly: “During every day of the Trump administration, I will simply put America first.” But last week, when Trump met with Javier Miley, Argentina’s president, to discuss the $20 billion financial package proposed by the Treasury Department to stabilize the Argentine peso, the president struck a different tone. Miley, a Trump ally and far-right conservative who has dedicated himself to cutting government programs and torching regulations, has bet big on preserving the value of his country’s currency. “Just helping a great philosophy take over a great country,” Trump said. “Argentina is one of the most beautiful countries I have ever seen, and we want to see it succeed, simple as that.”
The next day, Treasury Secretary Scott Besent reiterated the administration’s commitment to Argentina, which, although heavily indebted, perpetually troubled, is not a major trading partner of the United States. (Last year, the United States exported $16.5 billion worth of goods and services to Argentina, compared to $384.4 billion to Mexico, and $78.7 billion to Brazil, Argentina’s neighbor.) In a press conference last Wednesday, Besant said he was working on another support package worth $20 billion, one financed by banks and investment funds rather than American taxpayers.
Miley, who was elected in November 2023, is a dramatic figure in Latin American politics. Like Jair Bolsonaro, Brazil’s former president, he rose to power by presenting himself as a brash, anti-establishment populist. Although he is sometimes compared to Trump, Miley defines himself as a free-market economist of the Austrian school, committed to free trade, unfettered markets, and dismantling government. (He described himself as an “anarcho-capitalist.”) For some American conservatives, he is an inspirational figure.
During his first year in office, Miley introduced economic “shock therapy,” cutting government spending by about thirty percent, partly by cutting pensions and cutting the wages of public sector employees. Excessive austerity policies helped Argentina achieve a budget surplus in 2024 for the first time in fourteen years. The inflation rate fell from about one hundred and sixty percent to less than fifty percent. In February, Miley appeared in Maryland Temporary CPCthe annual conservative festival, where he presented the chainsaw to Elon Musk. In April, the International Monetary Fund, which for decades promoted versions of Miley’s austerity and deregulation policies, rewarded Argentina with a new $20 billion loan. One sympathetic commentator praised Miley’s “economic miracle.”
Any hopes that the new IMF loan would end Argentina’s need for external support were quickly dashed. Miley’s spending cuts imposed huge costs on pensioners, public sector workers, and others who depend on the state. He promised that his tough policies would unleash a wave of investment and expansion, but in the first half of this year the country’s nascent economic recovery stalled. Unemployment began to rise again. Businesses also suffered, and Miley’s popularity declined. At the beginning of September, after his party lost local elections in Buenos Aires province, traders dumped the peso, which the government had pegged to the dollar to curb inflation. (When a currency depreciates, imports become more expensive, causing overall prices to rise.) Until the Trump administration came to the rescue, Miley was facing the prospect of a currency crisis of the kind Argentina had experienced several times before.