U.S. Treasury risks $20 billion on Argentina bailout amid fears of default

U.S. Treasury Secretary Scott Bessent is leading a high-stakes $20 billion plan to support Argentina’s peso — a currency battered by decades of crises and nine defaults. The bailout, aimed at stabilizing President Javier Milei’s economy, could either bring U.S. gains through access to Argentina’s natural resources or end up costing American taxpayers billions.

Source The New York Times

The plan, structured as a currency swap between the U.S. Treasury and Argentina’s central bank, effectively acts as a loan designed to slow the peso’s collapse. It’s a rare instance of the United States directly intervening in another country’s economy without IMF mediation, raising both financial and political risks for Washington.

Critics warn the move jeopardizes U.S. credibility. With Trump already under scrutiny for domestic economic strains, some analysts argue that if the peso fails to recover, the U.S. could face one of its most expensive foreign bailouts in decades. Former Treasury officials called the decision “the riskiest use imaginable of the Exchange Stabilization Fund.”