WASHINGTON (TNND) — Argentinian President Javier Milei made his first White House visit on the heels of a generous financial move from the Trump administration. President Donald Trump agreed to a $20 billion currency swap with Argentina’s central bank as the South American nation teeters on the edge of a financial crisis.
What’s in it for the U.S.?
Treasury Secretary Scott Bessent said in a Fox News interview, the U.S. wanted to make sure China doesn’t tighten its grip on Argentina’s economy. Bessent warned that Argentina’s collapse could ripple through global markets, threatening stability in the Western Hemisphere.
China’s financial footprint across Latin America has exploded, and Venezuela is the clearest example.
According to the Council on Foreign Relations:
Venezuela is by far the biggest borrower; it has received nearly $60 billion worth of Chinese state loans, mostly relating to energy and infrastructure.
China’s loans have helped prop up Venezuela’s authoritarian regime, something the U.S. Treasury clearly wants to avoid happening again.
So, Bessent’s strategy is simple: fill in the gaps before China does.
Argentina’s bailout isn’t the first time Washington has stepped in to rescue a foreign government from financial disaster, but it’s been a while.
The last major financial bailout happened in 1995, with Mexico.
The 1995 Mexico Peso Crisis
“Ernesto Zedillo Ponce de León, of the Institutional Revolutionary Party (PRI), is elected president and immediately faces a banking crisis when the value of the Mexican peso plunges in international markets.” —Council on Foreign Relations
The Mexican peso crisis erupted just weeks after Zedillo took office, triggering capital flight and fears of default. President Bill Clinton bypassed Congress to approve a $20 billion loan from the U.S. Treasury’s Exchange Stabilization Fund. According to the Clinton Presidential Center, Mexico repaid the U.S. three years ahead of schedule, and the U.S. actually made about $580 million in interest from that deal.
