The Journal: "Why Is Trump Giving Billions to Argentina?"

Podcast by The Wall Street Journal & Spotify Studios
Date: October 24, 2025
Hosts: Jessica Mendoza, Ryan Knutson
Guest: Ryan Dubay (WSJ Latin America Correspondent)

Episode Overview

This episode investigates the Trump administration's unprecedented $20 billion rescue offer to Argentina under President Javier Milei, exploring the political calculations, risks, and implications for both countries. The conversation unpacks the roots of Milei’s economic crisis, his radical austerity policies, and the contentious U.S. intervention linked to Milei’s political fortunes. Key voices from Argentina and the U.S. weigh in on the ground-level consequences and regional geopolitical stakes.

Key Discussion Points & Insights

1. Trump and Milei: An Unusual Alliance

• Significance of Relationship: Milei idolizes Trump and seeks to align Argentina closely with the U.S.
• Both leaders are political outsiders and fierce critics of leftist policies.
  • Quote: “Milei has always…a top fan of President Trump. He described…Trump’s loss in 2020 as, you know, a threat to Western civilization.” — Ryan Dubay [00:29]
• Milei’s ultra-pro-Trump stance is unusual in Argentine politics.

2. Milei’s Economic Experiment

• Radical Austerity: After winning the presidency in 2023, Milei enacted swift, deep cuts.
  • Waved a chainsaw while campaigning: “He was out on the street with his chainsaw, waving it around…drastic cut to the public sector.” — Ryan Dubay [04:03]
• Immediate Actions:
  • Cut regulations, slashed public spending by 30%, fired thousands.
  • Briefly lowered inflation, but heavy social and economic costs: factories closing, falling consumption, rising hardship.
  • Divided Public Opinion:
    • “Some say give him more time…others say we’re closing our factories, can’t make it to end of the month.” — Ryan Dubay [06:32]
• Structural Problems Remain: Major issue with Argentina’s peso, pegged to the U.S. dollar, creating trade and competitiveness challenges.

3. Political Turmoil & Economic Backlash

• Recent Setback: Milei’s party lost ground in a key Buenos Aires provincial election—the province accounts for 40% of the Argentine population.
  • Loss spurred market panic: “Argentines and investors started pulling their money out…peso devalued really quickly…” — Ryan Dubay [08:59]
  • Raised doubts about whether he can sustain his radical reforms.

4. The U.S. Bailout: $20 Billion with Strings

• Announcement: U.S. Treasury Secretary Scott Besant pledges to buy pesos and support a $20B currency swap, plus $20B more from private sector—unprecedented U.S. intervention.
• Conditionality: Trump states the aid depends on Milei’s electoral success:
  • Quote: “If he loses, we are not going to be generous with Argentina.” — Donald Trump [12:03]
• Market Reaction: Trump’s comments prompt a 40% market drop in Argentina.
• Walkback:
  • Besant later clarifies: “…support for Argentina is not election specific, but policy specific…as long as Argentina…continues enacting good policy, they will have US support.” [12:34]
• Skepticism and Backlash: Some see this as election interference:
  • “A lifesaver made of lead…not help at all, going to make you sink.” — Unnamed analyst [12:44]

5. Ground Sentiment in Argentina

• Declining Popularity: Milei’s approval rating drops from 50% to 35%.
• Local views:
  • Adriana del Carmen Castro Nuovo (retiree): The deal will “only help politicians and not the Argentinian people.”
  • Alejandro Cassano: Trump “only thinks about himself and his country…both Trump and Milei are deranged.” [13:56]

6. Risks for the U.S.

• Direct Financial Risk: U.S. may end up “holding pesos that become worthless.” — Ryan Dubay [14:19]
• Political Blowback:
  • U.S. soybean farmers angry: China now buys soybeans from Argentina, not the U.S.; bailout helps their competitors.
  • Quote: “If Argentina fails, okay, they’re my second biggest competition… I need my second biggest competitor to fail.” — Scott Brown, Arkansas farmer [15:01]

7. U.S. Strategic Motives

• Geopolitical: Trump administration wants to “pick winners and losers” in Latin America, reward ideological allies, and counter Chinese influence.
  • Pressuring Argentina to limit Chinese access to resources (lithium, copper), promote U.S. corporate deals.
  • Quote: “…an example, I think, for other countries in the region…if you are allied with us, we will help you.” — Ryan Dubay [15:25]

8. Can the Bailout Actually Help Argentina?

• Experts: Bailout buys time, but doesn’t fix core issues:
  • “There are so many problems…just bringing down inflation was just one of them…need investments back in, labor reforms, political support…” — Ryan Dubay [17:11]
• Likened to a “deadline extension more than anything else.” [17:59]

Notable Quotes & Memorable Moments

• “Make Argentina great again.” — Javier Milei, echoing Trump, at a conservative conference [00:24]
• “[Milei] was out on the street with his chainsaw, waving it around.” — Ryan Dubay [04:03]
• “A lifesaver made out of lead.” — Unnamed Argentine economist criticizing the bailout [12:44]
• “Trump only thinks about himself and his country. Both Trump and Milei are, quote, deranged.” — Alejandro Cassano, Buenos Aires voter [13:56]
• “If we’re going to make American agriculture great…then I need my second biggest competitor to fail.” — Scott Brown, U.S. soybean farmer [15:01]

Timestamps for Key Segments

• 00:05–02:17: Trump & Milei’s personal/political alliance
• 03:53–05:49: Milei’s economic cuts, public reaction, campaign symbolism
• 06:48–08:26: Peso problems, limits of Milei’s reforms, public sentiment
• 08:33–09:35: Provincial election backlash, reform in jeopardy
• 10:57–12:13: U.S. bailout announcement, Trump’s conditionality
• 12:24–13:16: Market reaction, accusations of interference, Milei’s plunging approval
• 13:22–13:56: Argentinian voter reactions
• 14:19–15:16: Financial and political risks for U.S./Trump
• 15:25–17:11: U.S. strategic motives, countering China, Argentine resources
• 17:06–17:59: Will the bailout actually help?

Conclusion

The U.S. offer of $20 billion in aid to Argentina, tightly linked to the success of Trump’s political protégé Javier Milei, illuminates the complex mesh of economic imperatives, domestic politics, and geopolitical competition at play. While the bailout may grant Milei short-term political and fiscal breathing room, both the Argentine public and segments of the American electorate are deeply skeptical—raising fundamental questions about sovereignty, economic policy, and the risks of interventionist foreign policy.