US Treasury Secretary Scott Bessent praised President Javier Milei’s policies in Argentina as a model for other market-friendly governments in Latin America, in a symbolic show of support for the libertarian leader.
“Today was what I would call a fulcrum day,” Bessent said in an interview Monday after meetings with both Milei and his economic team, during a rare bilateral visit to the crisis-prone nation.
Argentina last hosted a US Treasury chief during a Group of 20 summit in 2018, before its last market-friendly president was swept from power by a left-wing populist. Bessent’s presence in Buenos Aires emphasised how sharply Milei has swung the pendulum back.
“This is a completely new government and new policies,” the Treasury secretary told Bloomberg News at the US ambassador’s residence. “I don’t like the word unprecedented — but it’s unprecedented.”
Milei’s government is coming off a string of victories that reached a crescendo Friday when it signed a landmark deal with the International Monetary Fund for a new US$20-billion lending programme, more than half of which will be given up front. And on Monday, it began easing currency and capital controls that have held back foreign investment for years.
Securing support from US President Donald Trump’s administration was key in the process. Argentina will receive US$12 billion of the IMF funds up front on Tuesday, a major victory amid hesitancy among member countries to increase their exposure to the perennially troubled economy. But the US is the biggest shareholder at the Washington-based lender and Bessent dismissed concerns about frontloading, even though Argentina is the fund’s biggest debtor.
“The good thing about having the money is the bigger your war chest, the more unlikely that you’re going to have to intervene,” Bessent said. “It’s going to be a smoothing function. I’m going to be watching it closely.”
Argentina renewed a portion of its US$18-billion currency swap line with China last week, despite criticism by a Trump administration official who said it was an extortionate arrangement that should come to an end. The announcement of Bessent’s visit soon after those comments led some investors to speculate that he would bring an offer of alternative financing.
Though Bessent said in an earlier interview with Bloomberg Television that the US government isn’t currently considering a direct credit line for Argentina, he signalled afterward that it remains a possibility. “At the end of the day, we have the Exchange Stabilization Fund, too. We haven’t committed to being part of that, but could be.”
Argentine officials have not requested access to the line, Bessent added.
However, Bessent also said that if Milei’s government continues with its economic reforms the country should have enough foreign exchange inflows to pay off the active US$5 billion portion of its swap with Beijing.
“What we are trying to keep from happening is what has happened on the African continent,” Bessent said in the television interview. “China has signed a number of these rapacious deals marked as aid, where they’ve taken mineral rights and added huge amounts of debt onto these countries’ balance sheets.”
Bessent’s visit to Argentina also caused a flurry of speculation in Buenos Aires about what the relatively small economy did to merit attention amid Trump’s escalating trade war. Alongside Israel, Bessent said Argentina will be “toward the front of the line” for reduced tariffs, although larger economies will be prioritised.
The Trump administration sees Argentina playing a mostly symbolic role as an economic beacon for the rest of the region while the US tries to counter China’s weight.
“The [Barack] Obama administration missed a big opportunity during their eight years when numerous Latin American countries installed centre-right governments,” Bessent said. “It’s important to make Argentina the exemplary example of what happens when you put in very sound economic policies.”
He also flagged the reelection of President Daniel Noboa in Ecuador in Sunday’s run-off vote as a significant milestone. “I could see the free-market ideology spreading back through Latin America as we see more examples of it working.”
Earlier Monday, Bessent met with Milei and Economy Minister Luis Caputo at the Casa Rosada presidential palace. The Treasury chief and the libertarian leader recorded a joint declaration that the president’s office later released on social media.
Bessent’s visit coincided with the first day Argentina allowed the peso to trade freely, within a set range, as it started to remove other financial restrictions. Those are key steps for the country to eventually reenter capital markets after its most recent sovereign debt default in 2020. Investors cheered Monday as the country’s bonds climbed while the peso weakened, almost eliminating the gap between the parallel market and official rates entirely.
The Treasury secretary, a former hedge fund manager, recalled his time restructuring Argentina’s debt and criticised former president Mauricio Macri for hesitating on policy reforms as political pressures built up.
“I helped engineer the 2016 debt restructuring, and then they blinked on the policy when things got tough. And I don’t think this government’s going to blink,” Bessent said. “Most importantly, I think the Argentine people have looked into the precipice and have made the decision not to be poor forever, because they were close to it.”
Milei prioritised his relationship with Trump even before the president took the oath of office. On the heels of a visit from then-US secretary of state Antony Blinken early last year, Milei flew to Washington to tell Trump he hoped he’d become president again.
Since the US election, Trump and Milei have met three times. The Argentine leader has been playing up his ideological similarities to Trump, voting in line with him at the United Nations at the expense of alienating close ally Volodymyr Zelenskyy. He has also stepped up his anti-woke rhetoric at the World Economic Forum in Davos, Switzerland, as well as at conservative rallies in the US, Spain, Italy and neighbouring Brazil.
Caputo met with Bessent in Washington in February, after a meeting between Milei and Trump. Most recently, Caputo and Milei flew to the US president’s Mar-a-Lago resort in Florida, hoping to get a fourth meeting only to return empty handed.
by Manuela Tobias, Patrick Gillespie & Annmarie Hordern, Bloomberg
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