MAGA: Make Argentina Great Again?
On October 9, 2025, U.S. President Donald Trump and Treasury Secretary Scott Bessent authorized a 20 billion-dollar currency swap with the Central Bank of the Argentine Republic. In addition, Bessent has announced plans to secure another 20 billion dollars in funding from “private banks and sovereign wealth funds.” The first 20 billion USD will be exchanged for 20 billion Argentine pesos, aimed at flooding the Argentine Central Bank with liquid reserves and promising stability to investors. Economic instability in Argentina has been a consistent issue for decades; the country struggles with high deficits, high inflation, and high poverty levels. In Argentina, both pesos and U.S. dollars are widely used, and as demand for the peso declines with more investors losing confidence in its stability, it continues to depreciate against the dollar. At the same time, Argentina is facing a shortage of dollars, which in turn has severe consequences: the country might struggle to pay its debt, and a lack of dollars might undermine the confidence of the peso as well, increasing the demand for dollars and creating a vicious cycle of currency depreciation. This currency swap provides banks with the reserves they need to operate and signals to the international community that the U.S., an economic superpower, has confidence in Argentina’s economy.
This currency swap has been criticized as a “bailout from default” for Argentina, controversial because the U.S. would incur a severe financial loss if the peso were to depreciate further. This year alone, the peso dropped 30 percent, but is also extremely volatile, sensitive to fluctuations in the world economy.
The U.S.’s interest in helping Argentina stems from its president, Javier Milei, a conservative libertarian with a close bond to President Trump, who has repeatedly said that Milei is his “favorite president.” Trump had said that the U.S.’s support was largely dependent on Milei’s party’s success in the 2025 midterm elections, quoted saying that “if [Milei] loses,” the U.S. is “not going to be generous with Argentina.”
Milei was first elected in 2023 and ran on a platform of creating a “new Argentina.” He was originally a political commentator, financial analyst, and economic advisor to several politicians and businesspeople. Milei’s slogan “there is no money,” emphasized his campaign goals of labor reform through austerity measures, such as dollarizing the economy, significant budget cuts, and the privatization of state-run industries. This past October, Argentina held midterm elections. Though not up for reelection himself, these elections were largely seen as a way to measure public opinion on Milei’s first two years in office. His party, La Libertad Avanza, won big. La Libertad Avanza scored 40 percent of the vote compared to 30 percent won by its political opponents, the left-leaning populist Peronist Party. Together with its allied blocs, the conservative party holds around 100 seats in the Chamber of Deputies (lower house). With this increasing support in both bodies of the legislature, Milei will be able to more rapidly pass his reforms to cut down on government spending.
Many across the global community argue that the primary motivation of the currency swap was to support Trump’s ideological ally in a strategic regional position, and not to help stabilize Argentina’s economy in the long term. Scott Bessent called the deal an “economic Monroe Doctrine,” and said that they “do not want another failed or China-led state in Latin America.” According to Monica De Bolle, a Georgetown professor and senior fellow at the Peterson Institute for International Economics, China has been playing an increasingly important role in Latin America, becoming a top trading partner and major source of foreign investment. She argues that “the U.S. administration has realized that it has lost ground to China in the region, and hence, the Argentina bailout or the Argentina package comes at a moment where it places the U.S. in a situation where it can actually confront China in the region. And it is very much that rationale that drives this 20 billion package.” Bessent and De Bolle’s words echo many of the policies pursued by the U.S. government when the Cold War played out in Latin America. The U.S. has a long and continuous history of intervening directly and covertly in the region, and although the currency swap is not a military strategy, it does continue to spread U.S. influence, using “soft power” techniques and economic policy.
Amid growing U.S. influence in Latin America, particularly in Argentina and in the Caribbean off the coast of Venezuela, where the U.S. is building up a military presence and has been striking at “drug boats,” Scott Bessent’s words about the currency swap may point towards a new era of American intervention in Latin America. Trump has always touted the slogan, “America First,” but is this a sign of something else? Is this a new era of American interference in Latin America?