The U.S. has outsized influence over global finance through the IMF and a Treasury fund called the ESF, both backed by taxpayer money. In 2025, the Trump administration used these tools to stabilize Argentina—setting up a roughly $20 billion dollar-for-peso swap and buying pesos to support its currency. Supporters framed it as helping a close ally and encouraging Argentina to pull back from China; critics in Congress called it a bailout and moved to block it. The move was unusually big and politically timed, especially given Argentina’s troubled 2018 IMF program, which reached a record $57 billion and was later judged weak. Bottom line: the U.S. used public financial power to aid a friendly government, and the ripple effects include China shifting soybean purchases toward Argentina—squeezing U.S. farmers on price and sales.
- The U.S. holds about 16.5% of IMF voting power—the largest share—and major policy decisions require 85%, giving the U.S. an effective veto. (imf.org)
- IMF lending capacity is financed primarily by member-country “quota” contributions paid by governments; U.S. participation is administered by the Treasury and funded through congressional authorizations and appropriations. (imf.org)
- The U.S. Treasury’s Exchange Stabilization Fund (ESF)—created by the Gold Reserve Act—holds U.S. dollars, foreign currency, and IMF Special Drawing Rights and may provide financing to foreign governments at the Treasury Secretary’s discretion with presidential approval. (home.treasury.gov)
- The U.S. Treasury finalized a $20 billion currency-swap framework with Argentina and directly purchased Argentine pesos; Treasury indicated use of the ESF and U.S. SDR holdings in the backstop. (reuters.com)
- Associated Press reported the swap and dollar purchases, and that U.S. lawmakers introduced the “No Argentina Bailout Act” to block the aid—underscoring it was widely viewed domestically as a bailout using public resources. (apnews.com)
- Milei publicly thanked Trump and Treasury, calling the U.S. “the closest of allies,” as cited in contemporaneous reporting. (reuters.com)
- Senior Trump envoy Mauricio Claver-Carone described Argentina as an ally and linked U.S. support to Buenos Aires unwinding a China swap line, illustrating the political alignment behind the aid. (buenosairesherald.com)
¶ These actions relied on U.S. public funds and official assets to assist politically aligned governments abroad
- IMF programs draw on pooled resources funded by member governments; U.S. participation is taxpayer-backed via congressional appropriations and authorizations. (imf.org)
- The ESF is a U.S. government fund whose operations, including financing to foreign governments and foreign-exchange interventions, are authorized by the Treasury Secretary with presidential approval—i.e., deployment of U.S. public assets. (home.treasury.gov)
¶ The size and timing of the Argentina rescues were exceptional by IMF and U.S. standards
- The 2018 Argentina program was augmented to a record $57 billion and later assessed by the IMF’s ex-post evaluation as fragile and ultimately unsuccessful—underscoring the extraordinary scale and contentious nature of the assistance. (elibrary.imf.org)
- The 2025 U.S. swap and peso-buying intervention was a rare, high-dollar use of Treasury’s stabilization tools to buttress an allied foreign government’s markets ahead of key elections, per detailed wire reporting. (reuters.com)
¶ China’s pivot to Argentina is undercutting U.S. soybean farmers on price and sales
- After Buenos Aires temporarily paused export taxes, Chinese buyers booked at least 10 cargoes of Argentine soybeans and signaled record purchases from Argentina and Uruguay for 2025/26—diverting demand away from U.S. growers. reuters.com