Trump links $20 billion US aid to Argentine election: If Milei loses, we withdraw.

On Tuesday, October 14, Eastern Time, US President Trump made it clear during a meeting with Argentine President Milei at the White House that whether the US would continue to provide Argentina with a $20 billion currency swap agreement directly depends on Milei’s performance in the upcoming Argentine midterm elections.

Trump said, "If he (Milei) loses, we will not be generous to Argentina," and added, "If he does not win, we will pull out."

This statement came just days after the US Treasury directly purchased Argentine pesos and completed a $20 billion currency swap framework agreement. The agreement aims to stabilize Argentina’s financial markets and support the cash-strapped country’s economy.

Trump’s remarks caused market volatility. After he spoke, Argentina’s Merval stock index fell more than 4% on Tuesday, and previously rising dollar bonds all turned downward, with the dollar bonds maturing in 2035 dropping nearly 3 cents to about 57 cents.

Argentina will hold midterm congressional elections on October 26, which are widely seen as a referendum on Milei’s policies. Milei’s Libertarian Progressive Party currently holds less than 15% of the seats in Congress, and he hopes to gain more support through the elections to advance free market reforms.

Rescue Conditions Explicitly Tied to Election Results

Last Thursday, the US Treasury announced it would directly purchase Argentine pesos and reach a $20 billion currency swap framework agreement with Argentina’s central bank.

This week, Trump repeatedly emphasized during a working lunch at the White House that the above currency swap agreement signals support for Milei’s economic philosophy. He called Milei "totally MAGA," saying the rescue plan "is truly intended to help a good financial philosophy and to enable Argentina to succeed again."

Trump said: "If he (Milei) wins, we’ll continue to support him; if he doesn’t win, we’ll pull out." He added that they also planned to discuss a potential free trade agreement.

On Tuesday, US Treasury Secretary Besent said that "building economic bridges" with allies and "ultimately cooperating with those who do the right thing" is much better than "having to shoot drug smuggling boats"—referring to US operations against boats off Venezuela’s coast.

US and Argentine officials emphasized that the US is not only providing economic aid, but also contributing to the broader effort to support ideological allies in the region. Trump stated: "This won’t have a major impact on our country, but it will impact South America. If Argentina does well, you’ll see other countries follow suit."

The Trump administration believes US aid is intended to help support the Argentine peso and stabilize financial markets. Besent said that the premise for this aid is "strong policies," and if Argentina returns to the failed policies of the Perón era, it will prompt the US to reconsider.

Milei thanked Trump and Besent, saying Besent helped Argentina "overcome liquidity issues caused by political attacks."

Market Reaction and Reform Pressure

To support the Argentine peso, last Thursday the US Treasury directly intervened in the foreign exchange market for the first time since 2011. This unconventional direct intervention sparked controversy in financial circles.

Critics say it conflicts with Trump’s “America First” agenda and may jeopardize taxpayer funds. Some Democrats question whether the arrangement is politically motivated, aimed at supporting a leader seen as Trump’s ideological ally.

For Milei, this week’s White House meeting means that his years of political and ideological alignment with Trump have reached a peak. Milei has frequently cited Trump’s slogans and vigorously praised him during his campaign. Trump also credits Milei’s election success to himself, saying "he campaigned in Trump’s way."

US support arrived at a critical moment, helping Milei maintain currency stability ahead of the midterm elections. Economists say the US lifeline has temporarily prevented a run on the peso and a deeper financial crisis. Martin Rapetti, economist at the University of Buenos Aires, said: "Without Trump’s intervention, we would now be in a serious crisis."

Risk Warning and DisclaimerThe market has risks; investment must be cautious. This article does not constitute personal investment advice and does not take into account individual users’ special investment goals, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article fit their own situation. Investments based on this are at the user’s own risk.