Why Argentina election results could crush Trump’s plan
President’s libertarian economic overhaul creates stark divide as voters decide his political future
Argentina faces a critical political moment as voters head to the polls for midterm elections that will determine whether President Javier Milei’s radical economic experiment continues. The libertarian leader’s policies have created a stark divide between wealthy and impoverished communities, with the outcome potentially affecting international support from the Trump administration.
The contrast between different Buenos Aires neighborhoods illustrates the polarized effects of Milei’s approach. In the upscale Puerto Madero financial district, luxury car dealerships report surging sales since import restrictions ended. Bankers celebrate the ability to purchase dollars online after years of restrictions, while fine restaurants serve executives who praise efforts to attract foreign investment.
Just across the polluted Riachuelo River, the reality looks dramatically different. In the working-class Isla Maciel neighborhood, families like that of 34-year-old Veronica Leguizamon depend on soup kitchens for daily meals. With only eggs, milk, and bread rolls remaining in her pantry, she regularly carries Tupperware containers through heavy rain to feed her four daughters.
Trump administration stakes $20 billion on Milei’s success
The United States has invested heavily in Milei’s political survival, with President Donald Trump threatening to rescind a $20 billion aid package if Argentina’s leader suffers electoral defeat. This unprecedented intervention reflects the Trump administration’s ideological alignment with Milei’s free-market policies and opposition to the populist Peronist movement.
When Peronist candidates achieved landslide victories in recent Buenos Aires provincial elections, international markets panicked over potential policy reversals. The US Treasury took extraordinary measures to support Argentina’s economy, selling dollars to meet demand and establishing credit lines totaling $40 billion from both government and private sources.
Market volatility demonstrates the high stakes involved in Argentina’s political direction. Investors fear a return to the economic mismanagement associated with previous Peronist governments, including corruption scandals and hyperinflation that devastated the country’s financial stability.
Austerity measures deliver mixed results
Milei’s signature achievement involves reducing Argentina’s chronic inflation through aggressive spending cuts and government downsizing. The president eliminated tens of thousands of public sector jobs, slashed state spending, and used foreign currency reserves to stabilize the peso.
Inflation rates dropped significantly from triple-digit levels, fulfilling Milei’s primary campaign promise. However, purchasing power declined for many Argentinians as wages, pensions, and welfare payments lost value despite lower inflation rates.
The economic transformation particularly affects vulnerable populations who previously relied on government subsidies and price controls. Soup kitchens report doubled demand over the past year, with volunteers noting that occasional visitors have become desperate regulars seeking basic nutrition.
Regional support shifts amid economic hardship
Avellaneda municipality, which includes Isla Maciel, demonstrates changing political allegiances. While 42% of residents supported Milei during his 2023 presidential campaign, support dropped significantly in recent provincial elections as economic pressures mounted.
Sixty-four-year-old pensioner Epifania Contreras exemplifies voter frustration, explaining that her $200 monthly pension cannot cover basic living expenses amid continued inflation. Many residents express nostalgia for Peronist redistributive policies despite acknowledging past economic failures.
Congressional control hangs in balance
Sunday’s elections determine control of 127 lower house seats and 24 Senate positions. Milei’s La Libertad Avanza party currently controls less than 15% of Congress, limiting his ability to advance structural reforms.
Electoral success would enable Milei to defend austerity measures, uphold presidential vetoes, and implement labor and tax reforms. Defeat could force painful currency devaluations, undermining his anti-inflation achievements and potentially destabilizing the economy.
Most polling suggests a tight race between Milei’s libertarian coalition and the Peronist Fuerza Patria alliance, with voters weighing immediate economic hardship against long-term reform promises.
Source: Associated Press, CNN
