US approved Argentine bailout raises many eyebrows.

In October 2025, the US formally agreed to a bailout of $20 billion, as well as a $20 Billion currency swap deal between the peso and the dollar, in a widely unpopular.  The US government is still undergoing a shutdown, leading critics to describe this move as being more of a political gambit rather than a economic decision.

Historically, Argentina has recieved bailouts before from other countries and organisations, particularly the IMF. This came to a peak in 2018 where Argentina borrowed $57 Billion from the organisation, as a direct result of fiscal imbalances and hyperinflation. Mere weeks before the US bailout, the country got approval for a 23rd program, where it borrowed $20 Billion solidifying it at the top of the IMF debtors list. 

In spite of these loans, Argentina was still in massive levels of financial trouble. At the time of Javier Milei’s election in 2023, poverty was at an incredibly high 42%, with a contracting GDP. After his election, projections of the economy making a recovery were looking more and more likely, given his campaign promises of drastically reducing government spending as well as shocking the economy to reduce inflation and a myriad of economic issues Argentina faces. However,  in spite of improvements being made, these promises have not fully come to fruition, and some argue that the economy has only gotten worse, with stagnation looming large on the country, and unemployment being at its highest since 2021.

Given the US government shutdown, many view this decision as Trump prioritising the people of other countries over his own constituents. While there is validity to this claim, it should be noted that Trump does have ulterior motives in the stake.  Milei is one of Trump’s most important allies, given the similarities between the two characters, with Milei known to have reused the famous “MAGA” phase, calling it “Make Argentina Great Again.” Because of this, Trump sees much importance in keeping Milei in power, and with the collapse of the voter base, and many turning against him, this is a risky gambit taken by the US President to ensure he does not lose the seat to another Argentinian he may have less control over.

A major player who finds trouble within the context of the bailout are soybean farmers. Since Trump's worsening relations with China, they’ve stopped importing the product from these farmers, which used to make up 50% of their exports. This demand is being compensated for by soybean farmers of Argentina, who offered deals of untaxed soybeans to China right as US demand dropped when it was supposed to be at one of its highest levels all year as a direct result of tariffs. Many have been angered as a direct result of this, actively accusing the government of helping the competition that’s threatening their already hurting bottom line.

Furthermore, both sides of the political party in Washington don’t see favourably on this decision, in a decision many describe as “Putting America Last”, going against Trump’s entire political campaign that got him elected to begin with. Other parties who oppose the situation are the major US banks, who are all in agreement of requiring some form of collateral to ensure that the money used for bailing out the Argentinians would be used well and be paid back in full.

For the Americans, one might wonder what this might mean for the future of their political relations. With Trump willing to prioritise other countries over his own, and seemingly leaving lots of his own people in the dust, it seems rather likely that rumours of the US shifting politically to that of an authoritarian government would come true. No one knows to what extent he’s willing to take this, however, he seems deadset on keeping his own promises and motives and putting that on a far more important level than the needs of his own people.

And for the Argentinians, and especially Milei? The situation seems a lot more dire. With Congressional elections coming on the 26th of October, it’s now or never for Milei. Argentina still hasn’t improved in any meaningful matter economically, and he’s just gotten a bailout for Trump. If he loses this election, Argentina would be in a whole host of disasters, because whoever comes after him would not only have to fix the current Argentinian situation, but with a Trump who’d throw a fit that he couldn’t buy votes for his political ally. If Milei gets re-elected? Well, let’s see if he can back up his talk and drag Argentina out of this mess.

Sources:

Werner, A. (2025, May 14). The Argentina-IMF saga starts a new season. Peterson Institute for International Economics. https://www.piie.com/blogs/realtime-economics/2025/argentina-imf-saga-starts-new-season 

International Monetary Fund. (2025). IMF Executive Board approves 48-month US$20 billion Extended Arrangement for Argentina. https://www.imf.org/en/News/Articles/2025/04/12/pr25101-argentina-imf-executive-board-approves-48-month-usd20-billion-extended-arrangement

Georgieva, K. (2025, October 8). IMF chief says she expects decisions soon on Argentina aid package. Reuters. https://www.reuters.com/world/americas/imf-chief-says-she-expects-decisions-soon-argentina-aid-package-2025-10-08/