In his second inaugural address, back in January, Donald Trump could not have stated his intentions more clearly: “For every day of the Trump administration, I will, very simply, put America first.” But last week, when Trump met with Javier MailiPresident of Argentina, discussing the twenty billion dollar financial package that the Ministry of Finance proposed to stabilize the Argentine peso, the President sounded different. Miley, a Trump ally and far-right conservative who seeks to cut government programs and stoke the bonfire of regulations, has made a big bet on propping up 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 it to succeed, very simply.”
The next day, Treasury Secretary Scott Bessent once again emphasized the commitment of the administration to Argentina, which, as beautiful as it is, is also heavily in debt, constantly in trouble and not a major trading partner of the United States. (Last year, the U.S. exported $16.5 billion worth of goods and services to Argentina, compared with $384.4 billion to Mexico and $78.7 billion to Argentina's neighbor Brazil.) At a news conference last Wednesday, Bessent said he was working on another $20 billion support package, this time funded banks and investment funds, not American taxpayers.
Miley, elected in November 2023, is a dramatic figure in Latin American politics. Like Jair Bolsonaro, the former president of Brazil, he came to power by portraying himself as a brash, anti-establishment populist. Although he is sometimes compared to Trump, Miley identifies himself more as a free market economist of the Austrian school, committed to free trade, freeing up markets and dismantling government. (He called himself 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 lowering civil servants' wages. These ultra-austerity policies helped Argentina achieve a budget surplus in 2024 for the first time in fourteen years. The inflation rate dropped from about one hundred and sixty percent to less than fifty percent. In February, Miley appeared in Maryland at CPACannual conservative rally, where he gave Elon Musk a chainsaw. In April, the International Monetary Fund, which for decades had promoted versions of Mila's austerity and deregulation policies, awarded Argentina a new loan of twenty billion dollars. One sympathetic commentator hailed “Miley's economic miracle.”
Any hopes that a new IMF loan might end Argentina's need for external support were soon dashed. Miley's spending cuts have had dire consequences for retirees, public sector workers and others who rely on the government. He promised his tough policies would spark a wave of investment and expansion, but the country's nascent economic recovery stalled in the first half of this year. Unemployment began to rise again. Business also suffered and Miley's popularity dropped. In early 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 the value of a currency falls, imports become more expensive, pushing up overall prices.) Until the Trump administration came to the rescue, Miley faced the prospect of a currency crisis like the one Argentina has experienced many times before.
