Foreign aid, MAGA-style

Bailing out Argentina is a strange form of populism

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Foreign aid is back, baby! Unfortunately, it’s only for personal allies of Donald Trump.

Months after shredding or attempting to shred most of the United States’ global aid and development infrastructure, the Trump regime has finally found a supplicant worthy of its attention. And that supplicant is none other than Argentinian President Javier Milei, a bombastic populist known as the Trump of Latin America.

In the last few days, the U.S. has intervened in Argentina’s tanking financial markets. The White House arranged for the country’s bank to receive a $20bn currency swap arrangement - essentially a loan - and directly purchased an unknown number of pesos in an attempt to stabilize the country’s currency. It’s also working on organizing another $20bn from private sources, probably backed by some sort of government guarantee.

These sorts of moves aren’t unheard of. The U.S. has directly intervened in the financial markets of foreign countries before if they were close allies or if their economic problems threatened the health of the global financial system.

One example was the “tequila crisis” of 1994, when Mexican financial markets tanked as a result of political instability. The Clinton administration was worried about chaos on the southern border if the Mexican economy collapsed, as well as the possibility that the country’s financial problems would tip other parts of the region into financial collapse. So it arranged a $50bn bailout for the country, one that was bitterly opposed by many Republicans.

The Argentinian case is different. There’s certainly a lot of turmoil in the country’s markets, but there collapse isn’t imminent. But what is imminent is a legislative election in ten days in which Milei’s party is struggling to stave off losses. In his typical extortionist style, Trump has made it clear that if Milei’s party doesn’t win those elections, he intends to cut off aid to Argentina. So this is very explicitly a political favor, not a reaction to some imminent catastrophe.

Still, other members of the regime have offered different justifications for providing American financial aid. “It is much better to form an economic bridge with our allies, people who want to do the right thing, then have to have shoot at narco gunboats,” according to Treasury Secretary Scott Bessent. Others have pointed to the fact that Milei has been willing to align Argentina strongly with Washington in a region which is increasingly tilting towards Beijing.

On one level, my response to this is to think “wow, the Trump White House has discovered foreign aid!”. These are precisely the types of strategic rationales which underlie much of the U.S. foreign aid program. That program is based not purely on altruism, but rather the idea that it is better for the United States - an absurdly rich country - to use a tiny portion of its wealth to promote stability and security in other parts of the world. That’s not just a moral imperative, but also strategic good sense - economic collapse has a tendency to not stay contained.

What is jarring is that when it comes to pretty much the entire rest of the world, the Trump administration rejects this logic. It portrays foreign aid as an unjustified giveaway to lazy foreigners, serving no useful purpose for the United States. So why different rules for “the Trump of Latin America”?

I think we know the answer.