US President Donald Trump said his administration may scale back engagement with Argentina if President Javier Milei’s party loses the October midterm elections, linking U.S. support to Milei’s economic philosophy.
The US recently approved a $20 billion financial rescue package and purchased Argentine pesos to stabilize the country’s currency, a move that briefly boosted markets but sparked criticism in Washington over prioritizing foreign aid amid domestic spending cuts.
Argentina continues to face a deepening financial crisis marked by a plunging peso, falling investor confidence, and uncertainty over whether Milei’s austerity-driven reforms will retain public support in the upcoming elections.
US President Donald Trump said his administration would reconsider engagement with Argentina if President Javier Milei’s party fails to win the upcoming midterm elections, remarking, “We’re not going to waste our time if he doesn’t win.”
The statement came days after Washington extended a $20 billion currency swap to stabilize Argentina’s struggling economy. Trump said his support was tied to Milei’s “correct philosophy,” but markets dipped following his comments.
Analysts warned that Trump’s conditional backing could unsettle Argentina’s financial recovery, even as officials insist the aid package remains intact. The move underscores Washington’s deepening political alignment with Milei, a libertarian reformer who has cut public spending and deregulated key sectors.
Earlier US purchased Argentine pesos, taking the next step in a controversial effort to calm a currency crisis hitting the South American country and its president. Treasury Secretary Scott Bessent announced the purchase on social media, while saying the US had finalised terms of a planned $20bn (£15bn) financial rescue for the country.
"The US Treasury is prepared, immediately, to take whatever exceptional measures are warranted," he said.
The announcement helped boost the peso and Argentine debt on financial markets but renewed debate in the US, where the decision to extend financial support to Argentina at a time of spending cuts at home has drawn scrutiny.
"Instead of using our dollars to buy Argentine pesos, Donald Trump should help Americans afford health care," Democratic Senator Elizabeth Warren wrote on social media in response to the announcement, referring to a key issue driving a stand-off over the government shutdown in the US.
Argentina has been facing increasing financial turmoil ahead of national midterm elections set for 26 October, as questions rise about whether voters will continue to back Milei's cost-cutting, free-market reform agenda after recent losses in a provincial election.
The value of the peso has declined sharply in recent months, while investors have been dumping Argentine stocks and bonds.
