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The first lesson for Treasury Secretary Scott Bessent is that digital photography has totally changed politics, as wiser practitioners have long since realized. You might have got away with reading private communications in public 30 years ago, but you can no longer do so. The second lesson is that if you build an administration on the promise that you will always serve the American interest, certain foreign policy decisions become difficult.
Bessent has been caught reading a message on his phone from Agriculture Secretary Brooke Rollins expressing her anger at the Trump administration’s deal to establish a $20 billion loan facility with Argentina, or “the Argentine” as Rollins prefers still to call it. How did Argentina’s embattled President Milei respond to being thrown a lifeline? In the words of Rollins, they “removed the export tariffs on grains, reducing their price, and sold a bunch a soybeans to China, at a time we would normally be selling to China.”
In fact, a “bunch” was 20 shiploads of soybeans, eagerly bought up by China as it tries to sidestep US producers in the midst of a US-China trade war. In vain has the White House argued that Argentina’s agricultural produce would even cheaper if the country was allowed to go bust. As far as American soy bean farmers are concerned they have been shafted.
That is the reality of a trade war. It might seem like a straightforward battle between one country’s producers and another’s, yet the victims of tariffs imposed by your own government are as likely to reside in your own country – and they are not going to be the least bit happy. But the incident also raises questions about the Trump administration’s support for Milei’s government. As far as Trump is concerned, Milei is a rare friend in a world which often seems mostly hostile towards him. Milei in some ways is cut from the same cloth – he is of the “move fast and break things” school of governing. Or in his case, slice through them – he famously appeared at political rallies using a chainsaw as a prop, symbolizing what he intended to do to Argentina’s bloated state. He did not disappoint. Whole government departments were expunged in a blizzard of executive orders which possibly left even Trump in awe. Milei achieved his first goal of taming runaway inflation, although it is still far from healthy levels – it is down to 33 percent from over 200 percent in 2023 when Milei took office.
Trouble is, when you start off like that you tend to make many enemies along the way. And now Milei has slipped up – he has cleared out Argentina’s currency reserves in trying to prop up the peso, hence the need for a bailout. It is natural that Trump might want to help out an ideological soul mate in need, but spending US taxpayers’ dollars doing this is not necessarily going to win him many friends at home. If you are a US soybean producer, Argentinian farmers are your rivals, not friends deserving of a bailout.
If Milei burns through his latest lifeline, he may find himself relying on the IMF alone. The White House vaults are not likely to be opened to him again.
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