Critics of President Donald Trump have zeroed in on a hefty financial aid package for Argentina that comes as Argentinian soya bean farmers have taken market share from United States producers.
“The frustration is overwhelming,” American Soybean Association president Caleb Ragland said on September 24.
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Senator Chuck Grassley from Iowa summed up the concerns in an X post: “Why would USA help bail out Argentina while they take American soybean producers’ biggest market???”
On October 19, a reporter asked Trump why he decided to aid Argentina despite concerns among US soya producers.
“Argentina is fighting for its life,” Trump answered. “Young lady, you don’t know anything about it. … They have no money. They have no anything.”
US aid to Argentina didn’t directly harm US soya producers – they have been hurt by a separate Trump policy, his trade war with China. But the timing of the aid and the soya bean export troubles pose a problem of optics for the White House.
At the same time, Trump is taking heat from Democrats over the scale of the financial aid package in relation to the cost of expiring subsidies that make the cost of Affordable Care Act marketplace plans more affordable. Democratic Senator Amy Klobuchar of Minnesota and Adam Schiff of California are among those who have made this argument.
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Here’s a guide to what’s going on.
What does the Argentina ‘bailout’ refer to?
Argentina’s far-right President Javier Milei’s alliance with Trump is key to this story.
Milei, who was inaugurated in December 2023, won the presidency on a platform of slashing government spending as well as other libertarian ideas, a political ideology that emphasises individual liberty and advocates for a limited government.
Milei, whom Trump has called his “favourite president”, presented a chainsaw, a symbol of his aggressive spending cuts, to then-Trump ally Elon Musk at March’s Conservative Political Action Conference.
Amid high inflation back home, however, Milei has faced challenges. The Argentinian currency, the peso, is weak, meaning it takes more pesos to buy foreign goods. This has worsened Argentinians’ economic standing and posed a political challenge to Milei.
Ahead of key legislative elections in Argentina, the Trump administration offered a $20bn rescue package, known as a currency swap facility, to help stabilise the peso. This is an agreement between two central banks to exchange debt under set terms. The agreement was officially signed on October 20.
Treasury Secretary Scott Bessent framed the $20bn in assistance as support for an ally in need. If Miliei loses the legislative elections, he won’t be able to continue his so-called “chainsaw economics” that have seen drastic cuts in social and welfare spending.
“It’s hope for the future,” Bessent told reporters on October 14. “I think that with the bridge the US is giving them and with the strong policies, that Argentina can be great again.”
Critics say this could involve buying Argentinian bonds at above-market prices, with a risk of monetary losses for the US.
“Buenos Aires’ path back to economic stability requires more than a balanced budget,” wrote Brad Setser, a senior fellow at the Council on Foreign Relations.
“The country’s economy has historically suffered from a shortage of foreign exchange. Its export base is small and commodity heavy. Its external debts are relatively large, and its foreign exchange reserves are low.”
Has the US recently doubled the size of its support to Argentina?
US Senator Ruben Gallego in an X post on October 15 said that “Trump is DOUBLING his bailout for Argentina. Meanwhile your health care premiums are about to DOUBLE.”
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A doubling of the Argentina assistance hasn’t happened yet, but officials are considering it.
Bessent said on October 15 that he was looking for ways to increase US assistance to Argentina by another $20bn, “adjacent” to the initial $20bn. The additional $20bn could come from the private sector rather than taxpayers, he said.
Separately, at least one subset of Americans – those who receive enhanced subsidies for health insurance purchased on Affordable Care Act marketplaces – could see their health premiums double.
If Congress and Trump do not extend certain subsidies before they expire at the end of this year, enrollees will have to pay 114 percent more out of pocket on average for their marketplace coverage, according to analyses by the Kaiser Family Foundation, a healthcare think tank.
How are soya farmers being affected by US support to Argentina?
China is typically the United States’s largest purchaser of soya beans, importing large amounts from October through March. But US farmers have long worried about heightened competition from South America — and Trump’s high-tariff trade policy “amplifies the issues,” said Chad Hart, an Iowa State University economist who specialises in agriculture.
After Trump levied tariffs on China earlier this year, China chose not to purchase US soya beans, sourcing them instead from Argentina and Brazil.
“The South American soybean crop was good this year and is expected to grow next year,” said Todd Hubbs, an Oklahoma State University assistant professor of crop marketing. The soybean crops from Argentina and Brazil are “large enough to meet Chinese needs in the short-term,” Hart said.
Milei temporarily removed export tariffs on many agricultural goods in order to increase the amount of foreign currency flowing into Argentina and offset the peso’s weakness. With that added incentive, China bought approximately 7 million tonnes of soya beans almost immediately, Hubbs said.
So while the US and China were already at odds over soya when Trump offered assistance to Argentina, it couldn’t have come at a worse time from the perspective of US soya producers. To them, the aid to Argentina seemed to reward a rival country that was taking their business.
Trump promised US aid to farmers hurt by his tariff policies, but that aid has been stalled by the government shutdown.
How does the size of US support to Argentina compare with US healthcare subsidies?
Senator Brian Schatz connected the scale of the Argentina package to the cost of a key Democratic goal from the ongoing government shutdown: extending the Affordable Care Act (ACA) enhanced subsidies.
“For the cost of the Argentina bailout we could cover the ACA tax credits for a year,” Schatz posted on October 14 on X.
Counting the initial $20bn in assistance to Argentina, and not the second tranche, Schatz is in the ballpark. The Congressional Budget Office, Congress’s nonpartisan number-crunching arm, projected that for fiscal year 2026, the credits in question would total $24.6bn.
While the two expenditures are similar in size, it’s worth noting that the funds to support Argentina couldn’t be shifted to pay for healthcare credits. The US Treasury has a pool of funds, known as the Exchange Stabilization Fund, dedicated to US intervention in foreign exchange markets.
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