Argentine President Javier Milei said on Monday that his country “intends to be a firm ally of the United States” and hopes to cement that friendship by signing a trade agreement that “will undoubtedly benefit both the United States and Argentina.”
“Just as President Trump made a commitment to make the United States great again, we have promised our people that we will make Argentina great again,” Milei proclaimed after meeting with U.S. Treasury Secretary Scott Bessent.
Milei thanked Bessent and President Donald Trump for supporting his dramatic reform program, which brought Argentina back to prosperity and a responsible government after “a long list of politicians blinded by socialism” led the country into ruin.
Milei chided those past leaders for viewing the U.S. as a “scapegoat for the evils that they themselves had generated, instead of a potential partner with which to grow together.” He was also unsparingly critical of South American neighbors who followed the socialist path, lambasting Venezuela as a “great slum” and Bolivia as an “open-air prison.”
Milei said Latin America has been “devastated” by the “virus of socialism,” much as Europe was devastated by World War II.
“Where socialism governs, it condemns the people to failure,” he said.
Argentina’s libertarian president said Trump “correctly understands that it is necessary to correct the existing distortions and fight for a commercial system where everyone plays by the same rules, free from abuse and unfair commercial practices.”
“Today, Argentina is living its own day of liberation, after 15 years of capital control. Today, we have gotten rid of that anvil we were chained to, returning once and for all to a path of sustainable growth,” he said.
Milei was referring to the tight controls on capital and currency he ended this week, backed by a $20 billion loan from the International Monetary Fund (IMF). The IMF chipped in to support Milei’s policies of austerity and low government debt, which it praised for “impressive initial gains,” by shoring up Argentina’s dangerously low reserves of foreign currency.
The controls Milei rescinded, known as “El Cepo” (“The Clamp”), were imposed in 2011 to prevent Argentines from fleeing the rapidly depreciating peso by purchasing U.S. dollars. Further tightening in 2019 made it almost impossible for the average person to buy foreign currency.
The peso’s value had deteriorated so much that average Argentine citizens were willing to do business with black market currency traders at horrible exchange rates just to get rid of their nearly worthless pesos. Literally stuffing money into mattresses became the preferred method of “banking.”
Foreign investors avoided the bear trap of the tightly controlled economy, fearful that capital controls would prevent them from collecting any profits from ventures in Argentina.
Milei won the confidence of the IMF by performing something close to a miracle, slashing the extravagant spending of his socialist predecessors virtually overnight and bringing sky-high inflation back down to earth. In September 2024, he introduced a budget that included the first surplus in almost 20 years.
The big IMF loan was all the more remarkable as an expression of confidence because the IMF previously plowed $43 billion into Argentina over the course of 22 bailout plans and rescue packages.
Milei had long been hesitant to completely remove The Clamp, fearing radical devaluation of the peso would destroy what remained of the average citizen’s buying power. But the IMF deal made him confident enough to take the big step. Milei’s move did not come a moment too soon, as Argentina’s central bank was spending billions of dollars per month to keep the peso stable.
On Monday, Bessent said he visited Argentina’s president in Buenos Aires to “convey the optimism we feel in the United States about this new Argentina.”
“In many ways, Milei and the MAGA movement share a common path,” the treasury secretary remarked.
After meeting Milei, Bessent told Bloomberg News he hoped the leader’s reforms would soon provide Argentina with enough foreign currency to pay off its $18 billion currency swap with China. The Trump administration has denounced the swap line as “extortion” by the Chinese government. About $5 billion of the currency swap is currently active. Milei’s administration has said it wants to ramp the Chinese swap down to zero by the middle of next year.
“Today is a fulcrum day. I wanted to come here today to show support for President Milei and his commitment to what I think is historic in terms of bringing Argentina back from the precipice,” Bessent said on Monday.
The treasury secretary also said the Trump administration wants to help Milei and other Latin American leaders keep “rapacious” China away from their mineral resources.
“They’ve added huge amounts of debt onto these countries’ balance sheets. They’re guaranteeing that future generations are going to be poor and without resources. And we don’t want that to happen any more than it already has in Latin America,” Bessent said of China’s agenda for Latin America.
Bessent met with Argentina’s Economy Minister Luis Caputo while he was in Buenos Aires, possibly with an eye toward a bilateral trade deal. Argentina received one of the lowest tariff rates announced by President Trump thus far, a mere ten percent, and Bessent hinted that if Argentine officials bring their “A-game” to negotiations, they might get to zero percent.
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