(MENAFN) President Donald Trump has made clear that the United States’ recently announced $20 billion lifeline to Argentina is contingent on the electoral success of the country’s libertarian leader, Javier Milei. Speaking during a White House meeting with Milei, Trump warned that the US would not "waste our time" supporting Argentina if Milei’s party fails to win key legislative seats in elections later this month.

Milei, who took office in December 2023, praised Trump for his diplomatic efforts, asserting that the US president’s policies would promote “prosperity.” Argentina is facing a deep financial crisis ahead of the national midterm elections on 26 October, widely seen as a referendum on Milei’s free-market reforms and austerity measures.

Trump emphasized the political stakes of US assistance, saying, "The election is coming up very soon. It's a very big election. Victory [for Milei] is very important… our approvals are somewhat subject to who wins the election." He added that a socialist victory would make Washington “feel a lot differently” about providing support.

Milei placed the blame for Argentina’s economic troubles on political opposition, telling Trump, "This liquidity problem that Argentina has is a result of the political attacks we have suffered from our opponents." While the $20 billion currency swap was intended to stabilize the peso, Trump’s linking of aid to Milei’s electoral performance is a rare instance of a US president openly connecting foreign assistance to election outcomes.

Recent provincial election results and corruption scandals within Milei’s La Libertad Avanza coalition have raised doubts about his ability to secure additional legislative support. If his party loses ground in the midterms, the government may struggle to pass further reforms, including measures already blocked by Congress.

Financial markets reacted cautiously, with Argentine stocks dropping after the White House news conference. The currency swap was meant to prevent a sharp devaluation of the peso and avoid further inflation, but sustaining it has already drained reserves ahead of $20 billion in debt due next year. Economists warn that drastic devaluation could trigger political backlash and sharply increase living costs.

While Milei’s austerity measures have brought some economic relief, they have also imposed significant social costs, including cuts to pensions, education, healthcare, infrastructure, and utilities. Opinion polls suggest that public support may be waning, raising questions about whether US intervention will sway voters in Milei’s favor.

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