The United States is not sending funds directly to Argentina, but rather offering a credit swap line, Treasury Secretary Scott Bessent announced on Thursday.
In an interview with CNBC, Bessent highlighted that the arrangement did not include the transfer of US funds to the South American country.
“To be clear, the United States is offering them a swap line. We’re not throwing money into Argentina, okay?” he added.
The explanation comes as Washington navigates political sensitivities around its support for Argentina, a country that has relied significantly on China in recent years for trade and financial assistance.
Trump-Milei meeting set amid financing push
The announcement came after the confirmation that the US President Donald Trump will meet with Argentine President Javier Milei in two weeks.
Argentinian officials revealed the meeting on Tuesday as part of Milei’s wider package drive for the swap line accord with Washington.
These upcoming talks are politically important for both countries. For Milei, the deal could strengthen his government’s shaky finances ahead of midterm elections later this month.
However, in Washington, the arrangement has caused a stir among Republican lawmakers who are reluctant to provide help at a time when Argentina is closer to the Chinese economy, as evidenced by recent soybean sales worth billions of dollars.
Treasury engages Caputo’s team in Washington
Bessent has portrayed the swap line as part of a broader discussion about financial cooperation.
In a post on X earlier this week, he expressed his eagerness to meet with Argentine Economy Minister Luis Caputo’s staff in Washington.
“The @USTreasury is fully prepared to do what is necessary, and we will continue to watch developments closely,” he wrote on X.
The talks are anticipated to focus on stabilising Argentina’s economy, which is still struggling with high inflation, low reserves, and shaky investor confidence.
A Renewed US Role in the Hemisphere
Bessent connected the deal, beyond its immediate monetary implications, to a larger US policy in Latin America.
He also said while Washington had lately been focusing on other areas, it could use Argentine experience to “realign some of the strategic interests that have been lost in the Western Hemisphere over the last several decades, and we have the opportunity to work with Argentina to be a unique model for the region.”
Bessent expressed optimism that Milei will do well in the upcoming elections, claiming that his reformist platform might spark political revolutions across the continent.
Argentina is seen as a regional example
“Now Argentina is a beacon down there,” Bessent said, arguing that Milei’s approach could pave the way for other countries to pursue similar economic models. He singled out Bolivia, Ecuador, and Colombia as potential followers, particularly after their own elections.
“What you don’t want are these failed economic models,” he added, framing Argentina’s reforms as a counterpoint to interventionist policies that have dominated much of South America in recent years.
Midterm elections loom large
On October 26, there are still legislative midterm elections in the country, a first big test for Milei’s government. Their party is in the minority in Congress now and cannot push reforms by itself.
Whether Milei comes to power with a legislative majority capable of pushing through his economic agenda or remains stymied will rest on the election outcome.
While geopolitics and domestic politics converge to explain the timing for the meeting between Trump and Milei, the Treasury action also requires an understanding of representative democratic systems.
And, while the swap line is not a direct financial contribution from the United States, it does indicate that Washington is willing to play a larger role in Argentina’s stabilisation and even transform its role in the region.
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