Between multiple extrajudicial killings of everyone aboard several alleged Venezuelan drug boats, a supposed peace deal in the Middle East, and a million other international stories as the chaotic daily misinformation vomit of the Trump administration rains down upon us, you can be forgiven for missing a tale of mere economics. Today, though, we will take a few precious moments to shine a light upon a series of foreign policy decisions that would have been a politically ruinous scandal had they been made by any other presidential administration in American history even as they barely warrant a footnote today.
So, did you have any idea that Donald Trump has committed $20 billion of U.S. taxpayer funds to bail out Argentina’s central bank? It’s true! Though the details are scant, the idea is to prop up Argentina’s collapsing currency and avert a financial crisis in the country through a currency swap.
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Now, although rare, it’s not unheard of for the U.S. government to step into the finances of a foreign country under dire circumstances to safeguard American interests. For example, 30 years ago the United States (that time in conjunction with the International Monetary Fund) intervened to prevent Mexico from defaulting on its debt so as to protect significant American investments, prevent a collapse of global markets, and avert a true crisis at the U.S. southern border.
Obviously, Argentina is not adjacent to the United States, meaning there are not the same border concerns this time. There are indeed American investors with stakes in Argentina — the most heavily invested are wealthy hedge funds including Fidelity, BlackRock, and Pimco.
However, the Trump administration is not even really trying to make a cogent case for dropping $20 billion into Argentina. Trump likes Argentina’s leader Javier Milei because he is a right-wing, anti-immigrant populist. Sound familiar?
“He’s MAGA all the way,” said Trump at the start of his meeting with Milei on October 14. Trump was hosting Milei at the White House, and has previously described the Argentine leader as his “favorite president.”
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This bank bailout comes at what should be a more politically sensitive time for providing gratuitous favors to Argentina: at this very moment, American soybeans farmers are harvesting their crops, often without any hope of selling them because China has been instead buying soybeans from Argentine farmers this year thanks to Trump’s tariffs.
Last year, China purchased more than half of American soybean exports at a value of $24.5 billion. This year, in the midst of Trump’s trade war, export volumes to China have fallen by more than 50%.
Meanwhile, the Milei government cut Argentina’s export tax on soybeans. The move worked as a means of courting interest. Chinese buyers have already reportedly purchased approximately 20 shiploads of Argentine soybeans.
Trump has talked about using some of the tariff revenue to provide another bailout to American farmers. Yet, with tariff revenue tied up in legal limbo due to the seemingly facial invalidity of Trump’s tariff regime, and given that markets do not tend to just spring back into place once buyers have become accustomed to alternative sourcing, it’s an imperfect solution at best.
Let’s review. Without any oversight from Congress or the courts, Trump has committed 20 billion American tax dollars to bail out the central bank of Argentina largely to assist wealthy hedge funds and a foreign right-wing politician. At the same time, Argentina is actively striving to steal what was American soybean farmers’ largest market, helped along by Trump’s erratic tariff regime. Trump is not doing this for some grand strategic reason, but because Argentina’s leader is aligned with him ideologically.
According to one report, America’s most farming-dependent counties backed Trump in last year’s election by, on average, an overwhelming 77.7%. I guess you reap what you sow.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected].