Now that the word Peronism is used in US politics more often than ever before, thanks to President Javier Milei’s relationship with Donald Trump, Argentina should watch every move up north. The big news this week was the victory, with around 50 percent of the votes, of Zohran Mamdani in the New York mayoral race – a direct defiance to the US president in the city that saw him grow to public stardom.
Trump called Mamdani a “Communist.” The 34-year-old mayor-elect, a Muslim born in Uganda, rejects the claim. Instead, he calls himself a “democratic socialist.” This is not a time for subtleties, though. Trump has used similar words to describe Milei’s rivals in Argentina: “They are extremely far left,” he said before pumping a couple of billion dollars in cash to keep Milei afloat during the campaign for last month’s midterms.
It is early to decree that the US electorate is putting a limit on Trump, just a year away from his own midterms that will officially turn him into a lame duck. The Republican leader said his candidates lost because he was not on the ballot – just like he was not on the ballot in Argentina in the October midterms, but nonetheless, he claimed victory for his endorsement of Milei.
The surge of figures like Mamdani mirror that of people like Milei before: a new face who is angry at something and manages to embody that anger. The NYC mayor-elect blames the rich and promises cheaper (if not free) housing, transport and childcare. Argentina’s head of state blamed the government and promised freedom from taxes and intervention. Their appeal is first and foremost about attitude rather than substance.
But that appeal vanishes if outcome does not match expectations. Milei won the midterms in October having delivered on only one of his promises – to lower inflation – but voters mostly extended him the benefit of the doubt to carry out his programme in relative political peace for another couple of years. Milei will likely not go all the way with the most radical aspects of his campaign promises, which included blowing up the Central Bank, scrapping the peso and fully dollarising the economy.
For Milei, it is now crucial that Trump be able to deliver on his promises, especially the ones made to Argentina. The White House and US Treasury Secretary Scott Bessent had committed to sign a US$20-billion currency swap to strengthen Argentina’s meagre Central Bank reserves. Bessent was also meant to be working on a loan from a group of banks, also to feed the Argentine economy with US dollars. Buenos Aires (and the markets) are eager to put pen on paper for that, but little detail is forthcoming.
Hopefully, Trump, Bessent, and now also Mamdani will not be watching the F1 race in São Paulo, Brazil, this weekend. Some 25,000 Argentines are expected at the Interlagos track for the race tomorrow, spending around US$100 million (US$4,000 a head) to watch their countryman, driver Franco Colapinto, likely finish in his usual position. In the first nine months of the year, Argentines spent almost US$9 billion on foreign tourism – the highest in history after 2017 and 2018 (which we know how it ended). There will be a flood of Argentines crossing the border to Brazil this summer for the holidays. Many more are already getting their plane tickets to watch Lionel Messi’s last World Cup in the United States, Canada and Mexico in mid-2026.
According to Central Bank information, Argentines purchased US$25 billion in the six months leading to the midterm elections, mostly because they thought a devaluation was coming. Only in September, Argentines hoarded US$6.5 billion. This is very high, even for a country used to FX hedging before big political moments. It has happened regardless of who was running the country and who was the opposition – left or right. Net Central Bank reserves, meanwhile, are in the negative.
If it continues, this voracity for US dollars will sooner rather than later force Milei to seek another bailout, so he should wish that the Mamdani threat stays only at that and that Trump remains mighty for the foreseeable future.
The Peronists, meanwhile, are gaping at the news that a Socialist will run New York. Buenos Aires City, to many the New York of the south, has voted right consistently for two decades now, and far from moving to the centre, it is going further right – from Mauricio Macri’s PRO to Milei’s La Libertad Avanza. Beyond the city’s borders, the Peronists are far from having any new face to offer, let alone one that could appear disruptive and fresh. They’d better find one quickly.
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