Argentina is currently negotiating a potential trade agreement with the United States that could grant the South American nation significant economic advantages, President Javier Milei announced on Wednesday. The discussions highlight deepening economic and diplomatic ties between Buenos Aires and Washington amid a challenging political climate in Argentina.

U.S. Support for Argentina

Speaking in a televised interview, President Milei emphasized that the United States has “strongly favored Argentina” and is considering trade advantages that could boost Argentina’s economy and international competitiveness. These discussions come alongside recent U.S. financial actions, including the purchase of Argentine pesos in the open market.

Treasury Secretary Scott Bessent confirmed that the U.S. is collaborating with banks and investment funds to establish a $20 billion facility aimed at investing in Argentine sovereign debt, signaling strong financial support for Buenos Aires.

Political Context Ahead of Midterm Elections

Argentina is set to hold midterm elections on October 26, which will serve as a critical test for President Milei. Falling approval ratings and stalled legislation in a Congress controlled by opposition parties have raised concerns about the government’s ability to implement reforms effectively.

Milei also indicated that he may consider cabinet changes following the elections, depending on the results. The outcome could impact both domestic governance and ongoing negotiations with international partners like the United States.

U.S. Perspective on the Agreement

President Donald Trump has reiterated his support for Milei’s government but warned that the United States would not “waste our time” with Argentina if Milei’s party fails to secure parliamentary support. Despite these political caveats, Milei emphasized that Trump continues to back the current administration, which is expected to remain in power until at least 2027.

Implications of a Potential Trade Deal

A successful trade agreement with the United States could provide Argentina with preferential access to U.S. markets, stimulate foreign investment, and strengthen economic stability. Analysts suggest that such an agreement would also enhance Argentina’s negotiating power in regional trade blocs and with other global partners.

The proposed deal, combined with U.S. financial support and investment facilities, positions Argentina to potentially accelerate economic reforms, tackle sovereign debt challenges, and bolster growth prospects amid a turbulent domestic political environment.