WASHINGTON (TNND) — President Donald Trump’s attempt to give Argentina’s fledgling economy financial assistance is creating a headache for him back in the U.S. as part of his base — farmers — are upset about the possibility of bailing out a country that is competing for a major crop — soybean exports to China.
Trump and Treasury Secretary Scott Bessent promised a possible $20 billion aid package to Argentina’s leader Javier Milei. They argue the plan is needed to stabilize a major Trump and U.S. ally ahead of October elections that are important for Milei to retain power. At the same time, some of Milei’s policies are helping U.S. investors and negatively impacting American soybean producers.
Investors and hedge funds have bought into Milei’s stewardship of the bedraggled country. Fidelity Investments, T. Rowe Price Group and Pimco all own bonds in Argentina, according to Bloomberg. In September, traders began selling off investments there after Milei lost some crucial local elections over corruption scandals.
News of U.S. help boosted some of the assets, but Argentina’s currency is still performing poorly among the stable of international currencies.
Milei’s reforms also included the elimination of some capital controls. One rule that was dinged was export taxes, allowing Argentina to export even more of the soybean crops to China, effectively allowing Beijing to keep U.S. farmers out of the loop. Up until this year, China was a significant importer of American crops, including soybeans.
Trump’s tariff regime triggered Beijing’s counter actions on U.S. agricultural imports. It was one of the few areas China could use as leverage over the president during a trade war.
The Trump administration’s work helping Argentina is not sitting well with Democrats or Republicans.
Sen. Elizabeth Warren, D-MA, was one of the first Democrats to blast the decision. She told her followers on the X platform that Trump should stop “giving away our money to his corrupt buddies.”
In response, Bessent said Warren was attempting to boost the “failed leftist agenda of the Argentine opposition.” But Republicans opposed the bailout idea as well.
This is a bitter pill for North Dakota soybean farmers to swallow,” Rep. Julie Fedorchak, R-N.D., told Axios last month.
Sen. Chuck Grassley, R-IA, told his social media followers something similar in September.
Why would the USA help bail out Argentina while they take American soybean producers’ biggest market?” Grassley wrote.
To make matters worse, the agricultural economy is in a slump since a commodity peak in 2022, in particular for crops like corn, cotton, soybeans, and wheat. Revenue on these crops has fallen even as input costs have increased, creating a challenging situation for many farmers who are unable to push costs up elsewhere in the market.
Some farmers are also placing blame on large agriculture businesses, which own the fertilizers and other instruments farmers use.
Arkansas farmer Adam Chappell told reporters after a meeting with lawmakers last month that this is the worst economy he’s seen in his lifetime.
Seed, chemicals or fertilizer, it’s all in the hands of a few companies that are the only game in town,” Chappell said. “You want to fix farming? Start a federal investigation on those big companies.”
The White House is responding with a focus to examine whether concentration in the agricultural sector is playing a part. Last month, the Justice Department’s Antitrust Division announced plans to scrutinize the ever-increasing costs attached to farming inputs like fertilizer and feeds.
The goal is “to protect American farmers and ranchers from the burdens imposed by high and volatile input costs,” Agriculture Secretary Brooke Rollins said at a forum in Missouri. The U.S. Department of Agriculture is helping the DOJ in the joint effort to flesh out the factors leading to higher costs.
Whether or not the investigations bear fruit remains to be seen. Tackling the problem could be difficult after the USDA ended a Biden-era partnership with the attorneys general of 31 states to address antitrust violations in the grocery and meat processing industries. The program was launched in 2023 to help states with lawsuits against anticompetitive behavior.
