Argentina has defaulted on its debt three times since 2001, including most recently in 2020.
But investors, including some with ties to Bessent such as Robert Citrone, had taken renewed interest in the country in recent years in a bet on Milei’s libertarian financial reforms.
Since he took office in 2023, he has introduced deregulation and sweeping cuts to public spending to curb inflation and achieve a fiscal surplus – where the state spends less than it takes in revenue.
Domestically, the austerity measures have been met with growing backlash, as people’s purchasing power declines and the country faces a likely economic recession.
But those measures have helped to rein in inflation and have been largely welcomed by international investors and the International Monetary Fund, a key lender to Argentina.
With Milei styling himself as a Trump-like figure, complete with “Make Argentina Great Again” rhetoric, they have also won admiration from many conservatives in the US. He has met repeatedly with Trump, with another visit expected next week.
Bessent’s announcement followed four days of meetings with Argentina’s economy minister Luis Caputo.
In his announcement, Bessent said the international community was “unified behind Argentina and its prudent fiscal strategy, but only the United States can act swiftly. And act we will.”
He has previously pushed back at suggestions that the support amounted to a bailout for what Warren, in a statement on Thursday, dubbed the administration’s “billionaire buddies”.
Nonetheless, the decision to extend financial support to Argentina has sparked backlash among American farmers, a key part of Trump’s voter base, who have been concerned as China shifts purchases of soybeans to countries including Argentina.
“Why would USA help bail out Argentina while they take American soybean producers’ biggest market???” Republican Senator Chuck Grassley, who represents Iowa, a key soybean producer, wrote on social media last month, when the US first pledged its support.