Hey, they’re just looking out for number one:
According to a photo of a private text on the phone of Treasury Secretary Scott Bessent, Argentina responded to the treasury secretary’s $20 billion bailout by turning around and removing its export taxes on soybeans and striking a huge new deal with China. That diminished the price of U.S. soybeans and weakened U.S. trade leverage with China, who immediately pulled out of their existing arrangements with soybean farmers in America’s heartland.
The photo taken by Angelina Katsanis for the Associated Press last week shows Bessent reading a text that appears to be from Agriculture Secretary Brooke Rollins.
“Finally—just a heads up, I’m getting more intel, but this is highly unfortunate,” the text said. “We bailed out Argentina yesterday and in return, the Argentine’s [sic] are removing their export tariffs on grains, reducing their price, and sold a bunch of soybeans to China, at a time when we would normally be selling to China. Soy prices are dropping further because of it. This gives China more leverage on us.”
“On a plane but Scott I can call you when I land,” a second message said.
Last week, Bessent outlined on X a plan to financially support Argentina following extensive talks between longtime allies President Donald Trump and Argentine President Javier Milei, a libertarian economist with a populist, Trump-like appeal, known for wielding a chain saw and cloning his enormous mastiff dogs.
The Treasury has arranged a $20 billion swap line with Argentina’s central bank, part of an effort to infuse the South American country with capital. Stabilizing Argentina ahead of an October midterm would help Milei’s chances of staying in power. Milei has had more success taming Argentina’s hyperinflation than first expected, but has been dealing with a brewing currency crisis and several corruption scandals.
Amid Argentina’s talks with the U.S., China ordered at least 10 cargoes of soybeans from the South American country, Reuters reported, which cited multiple traders.
Oh those wily Chinese. How dare they outsmart the great Scott Bessent? Apparently some American farmers aren’t amused:
This turnabout—with the U.S. rushing to Argentina’s defense, which rushed into China’s arms, jilting American farmers—has infuriated the slice of rural America that backed Trump to avoid precisely this sort of international trade disaster. Soybeans are vital to the U.S. agricultural industry, accounting for 20% of the U.S.’s cash crop receipts in 2024, worth $46.8 billion.
“The frustration is overwhelming,” the American Soybean Association (ASA) president Caleb Ragland said in a statement last week. “U.S. soybean prices are falling, harvest is underway, and farmers read headlines not about securing a trade agreement with China, but that the U.S. government is extending [$20 billion] in economic support to Argentina while that country drops its soybean export taxes to sell 20 shiploads of Argentine soybeans to China in just two days.”
“The takeaway that we have from the data of the last time we did this is that the U.S. lost about 20% of our market share, and it never came back,” Todd Main, the director of market development at the Illinois Soybean Association, told Fortune.
Trump wants to write them a check but they’re getting a little bit nervous that he’s destroying their businesses forever:
Trump proposed a plan last week to use tariff revenues to help fund farmer subsidies, but farmers have expressed the need for repaired trade with China.
“We can grow anything. What we really want is good relations with our trading partners,” Main said. “We want markets. We don’t want bailouts.”
These are Trump voters so he’ll take care of them and they’ll probably love him anyway. I’m sure they blame Biden or the “woke” left anyway. But it is telling that they’re getting upset. If they knew the whole story they might even be a tiny bit annoyed with Dear Leader.
And then there’s this which was totally predictable:
Treasury Secretary Scott Bessent’s $20 billion Argentinian bailout is not only poised to prop up President Javier Milei’s anarcho-capitalist regime with U.S. taxpayer dollars; it’s also set to deliver a significant windfall to one of Bessent’s old friends, per a Monday report by Judd Legum at Popular Information.
Robert Citrone, a billionaire who founded the hedge fund Discovery Capital Management, has a decadeslong relationship with Bessent that’s gone unreported in the U.S. press.
Legum cites descriptions in Latin American business publications of Bessent and Citrone’s friendship, including one paper that notes their “personal relationship as well as a past working relationship.” He also reports that when they were co-workers at Soros Fund Management, Citrone, by his own account, gave Bessent highly profitable investment advice.
Since Milei’s ascendance, Citrone has bet big on the Argentine economy. But amid the recent economic downturn under Milei, his Argentine investments were in trouble.
Enter Bessent. Last week, the treasury secretary announced a $20 billion currency swap line that, Citrone told Bloomberg, “has helped tremendously” and “will pay dividends for the U.S. strategically.” It’s certainly boosted Citrone’s holdings. (Notably too, Legum writes, “In early September, days before Bessent’s announcement, Citrone purchased more Argentine bonds.”)
It’s all so cozy isn’t it?
Just don’t call it oligarchy. That would be rude.