US taps brakes on Argentina visa waiver in another setback for Milei

The United States paused Argentina’s bid for a visa waiver just as the process for its entry into the programme was getting underway, in a fresh setback for President Javier Milei ahead of a crucial midterm vote on Sunday.

South America’s second-largest economy took its first steps to establish visa-free travel to the US during Homeland Security Secretary Kristi Noem’s visit to Buenos Aires in July. But that process is now on hold, according to a person familiar with the matter.

US Secretary of State Marco Rubio had concerns about a corruption scandal engulfing the libertarian administration and wanted to have more discussions about it before reaching an agreement, according to Axios, which first reported the news on Wednesday.

A delegation led by the head of Argentina’s tax agency was sent home empty handed last week after a stop in Miami, Axios said, citing unnamed sources. The news outlet attributed the “diplomatic snub” to a lack of communication between Noem and Rubio’s departments.

Argentina’s Foreign Minister Gerardo Werthein didn’t immediately respond to a request for comment on the issue. But a Milei government official, speaking anonymously to the La Nación newspaper, called the Axios report false and malicious. The head of the tax agency is also quoted in the article denying that his team’s trip was related to Argentina’s potential entry into the US visa waiver programme.

Milei, who has carefully cultivated an ideological bond with US President Donald Trump, has been dogged by a bribery scandal for the past two weeks. Local media aired audio recordings on August 20 of a government official and personal associate of the libertarian leader allegedly describing a kickback scheme involving a state contract for pharmaceutical purchases at the ANDIS national disability agency.

The official, who was swiftly fired, named the president’s sister and general secretary, Karina, as a benefactor in the audios. This week, a judge blocked journalists from releasing additional recordings of Karina herself. Milei and his cabinet have denied any wrongdoing.

Argentina’s government has struggled to take back the narrative since the audios were leaked. Two campaign events ended abruptly last week, first when rocks were hurled at Milei and then when a fight broke out between protesters and Karina’s team during a separate campaign stop the next day. The Treasury announced Tuesday it’s planning to swoop in to prop up the nation’s currency as the scandal adds to other issues shaking investor confidence.

Argentina’s assets have been hit in recent weeks by a barrage of political and economic setbacks for the government. Dollar sovereign bonds have underperformed emerging-market peers in the past month, while the peso continues to weaken despite the libertarian government’s intervention.

Milei faces a key vote Sunday in Buenos Aires Province, which makes up nearly 40 percent of the country’s population and has consistently voted for the opposition Peronist movement. The provincial election is being seen by investors as a key signal of what’s to come in October, when all of Argentina heads to the polls to renew a large chunk of Congress.