The growing political and ideological alignment between Argentine President Javier Milei and former U.S. President Donald Trump is proving to be a key factor in Argentina’s negotiations with the International Monetary Fund (IMF). Milei’s relationship with Trump and other Republican leaders in the U.S. has strengthened Argentina’s position, ensuring support from Washington, which holds significant influence within the Fund. However, IMF board members remain cautious, closely monitoring the domestic political response from Peronism and other opposition forces in Argentina.

Washington’s Support and the IMF’s Cautious Approach

Milei has actively sought to align Argentina’s economic policies with pro-market, fiscal discipline-driven ideologies, a stance well-received by conservative policymakers in the U.S. His recent meeting with Trump and communication with top Republican figures have helped secure a more favorable stance from key IMF representatives.

The Biden administration, however, maintains a neutral position, acknowledging Milei’s efforts while avoiding direct involvement in Argentina’s internal economic struggles. This political duality in Washington has led the IMF’s board to proceed with caution, balancing their willingness to support Milei’s agenda with concerns over Argentina’s political stability.

Peronism’s Political Resistance

While Milei’s administration has successfully advanced its negotiations with the IMF, the Peronist opposition is pushing back. Leaders within the movement are actively criticizing Milei’s libertarian economic policies, arguing that they prioritize international financial interests over social welfare.

The IMF board remains attentive to these political tensions, aware that strong domestic opposition could lead to governance challenges. The Fund typically seeks assurances that loan agreements and fiscal policies will remain stable, even amid political shifts.

Milei’s Strategy: Strong International Alliances

Milei’s government is relying on geopolitical alliances with key global players to reinforce Argentina’s economic credibility. His close ties with Trump, Israel, and conservative European leaders are part of a broader strategy to secure international backing and boost investor confidence.

Despite challenges, the IMF’s ongoing collaboration with Argentina reflects the Fund’s acknowledgment of Milei’s bold economic reforms and commitment to fiscal responsibility. If his administration can maintain political stability and demonstrate sustained economic improvements, Argentina could secure more favorable financial conditions in future IMF agreements.

For now, the Milei-Trump connection is playing a crucial role in shaping Argentina’s economic future, but internal and external political dynamics will continue to influence the path ahead.