For Trump followers, his offer of a 20 to 40 billion economic assistance to Argentina came as a shock. For a government that emphasizes not spending American tax payers’ money abroad the record high foreign debt defaulter and agrobusiness competitor Argentina is a puzzling choice.
However, there are profound reasons for this outcome. In what follows, I will try to explain them. The first two motives are the most obvious ones, but I promise that the following two are the ones that are not that apparent though interesting to read.
The first reason, and more obvious one, is the ideological congruence between the executives. The Argentine president Milei shares Trump’s anti woke ideology, it has always been a Trump supporter and shares with him a deep-seated rejection for leftist governments and ideologies. However, whereas Trump is an economic nationalist, Milei brands himself as an “anarcho-capitalist” that profoundly believes that the powers of free market should reign without interference in order for economies and societies to succeed.
Secondly, next Sunday Milei will face a crucial midterm election. In a last September legislative vote in the crucial Buenos Aires province (that accounts for 40% of Argentina’s population) he lost against his arch rivals, the Peronist Party. The Peronist coalition, that governed Argentina for the most part of the last 25 years, held a leftist ideology that privileged bilateral relations with China over the US and that is a staunch critic of Trump’s policies. The following Monday, the Argentine peso faced very strong devaluation pressures that ended up drying up the Central Bank’s reserves.
Third, the US grand strategy has been under a deep transformation, at least since Obama`s presidency. It has been progressively withdrawing from the Middle East while focusing more on China. It has also demanded the Europeans (and also its allies in East Asians) to up their defence spending. This relative withdrawal is somewhat compensated by an increase of attention in its own neighbourhood, the Americas. It is under this lens that we can understand the recent US military actions against the Maduro regime in Venezuela, the suspension of economic aid to leftist governed Colombia and the huge tariffs applied to also leftist governed Brazil. Being Mexico also governed by a (somewhat pragmatic) leftist party and having in Chilean President Boric a staunch critic of Trump`s policies, the US is left with very few friends in the region. Right now, the only welcoming ally from a large country in the Americas is Argentina`s Milei.
Fourth, from the Argentine side, a change in the strategic outlook in part of its elites is also paving the way for an alliance with the US. The current Argentine executive, in its quest to achieve macroeconomic stability has as its most coveted goal the dollarization of the economy. This is the endpoint of the pro market economic reforms under way. At the same time, the Milei government supports the US and Israel in a fashion unseen in Argentine history. Worldwide, there are not many countries supporting the Trump agenda as thoroughly as Argentina.
There are strong indications that the deepening of the alliance between the US and Argentina is under way. However, near future events might change this course. Next month there will be presidential elections in Chile, while Colombia and Brazil will have theirs in May and October respectively. A win by the opposition in any of these countries will devalued the strategic relevance that Argentina holds right now. Secondly, will Trump successors double in an alliance with a country that has never been considered strategic for US interests? Finally, there is the question of Milei`s political future in Argentina. Good part of his ambitions and of Argentina’s grand strategy will be risked in next elections.