US pledge to rescue Argentina’s Milei faces market doubts, political pitfall

Markets are sending a clear message: the US government’s promise to “do whatever it takes” to support Argentina’s rightwing president Javier Milei may be more political theater than economic lifeline. Despite Treasury Secretary Scott Bessent’s bold vow, the Argentine peso has plunged, stocks have tumbled, and investors remain unconvinced about the durability of US aid amid growing geopolitical tensions and domestic unrest.

According to an opinion piece in The Guardian, this crisis is not just about Argentina’s fragile economy but also about larger power plays between Washington and Beijing, alongside internal political calculations tied to upcoming elections.

The piece reveals how US support for Milei, a key ally of Donald Trump, risks being a short-term bailout aimed more at shoring up political allies than delivering long-term stability.

The Guardian points out that Milei’s libertarian economic shock therapy has triggered a collapse in real wages, gutted local industry, and slashed social safety nets, deepening the country’s woes. Meanwhile, corruption scandals and tax breaks favouring soy farmers have alienated both domestic and international backers. Markets are skeptical because the peso remains artificially strong, propped up by commodity exports, while the broader economy struggles.

The opinion piece also highlights the geopolitical chessboard underpinning the US bailout. With China holding an $18 billion swap line to Argentina, US financial support is as much about countering Beijing’s influence as it is about saving Argentina. Any American support may demand reducing or ending China’s credit. It’s no surprise that speculators are testing the peso and forcing Argentina to burn through its dwindling dollar reserves before polling day. This complex interplay of foreign interests and internal politics means Argentina’s fate is tied to factors well beyond its borders.

Milei’s upcoming visit to the White House looks less like a step toward a solid economic plan and more like a campaign stop for Trump, with Argentina once again caught in the crossfire of international and domestic political games, the article notes.

By Sabina Mammadli