US Treasury's Bessent backs Argentina's economic reforms with eye on China

By Andrea Shalal

WASHINGTON (Reuters) -U.S. Treasury Secretary Scott Bessent said he met with Argentine President Javier Milei on Monday to underscore the Trump administration's full support for economic reforms that were bringing the Latin American country "back from the precipice."

Bessent also commended Milei for working to reduce barriers towards reciprocal trade with the United States, Treasury said in a statement about the visit.

In an interview with Bloomberg TV after his meeting with Milei, Bessent said the Trump administration was focused on helping Latin American countries avert what he called "rapacious" agreements made by China in Africa.

Argentina on Friday sealed a $20 billion, 48-month Extended Fund Facility deal with the International Monetary Fund after dismantling key parts of its years-long currency controls. It also announced a $12 billion loan program with the World Bank and a separate $10 billion deal with the Inter-American Development Bank.

"I wanted to come here today to show support for President Milei and his commitment ... to what I think is historic in terms of bringing Argentina back from the precipice," Bessent said in the interview.

The U.S. sought to prevent Latin American countries giving up mining rights to China in return for aid, he said.

"China has signed a number of these rapacious deals marked as aid, where ... they've taken mineral rights. They've added huge amounts of debt onto these countries balance sheets," he said. "They're guaranteeing that future generations are going to be poor and without resources. And we don't want that to happen any more than already has in Latin America."

Chinese lenders provided a combined $182.28 billion to 49 African countries from 2000-2023, leaving many countries heavily in debt. Since 2005, Chinese lenders provided more than $120 billion in loans to Latin American and Caribbean countries, according to data from Boston University Global Development Policy Center.

China said it opposed Bessent's remarks and criticised him for "maliciously slandering and smearing" China, and told the U.S. to refrain from "obstructing and deliberately sabotaging" developing countries.

"We advise the U.S. to adjust its mindset, instead of spending time repeatedly smearing and attacking China, meddling in the foreign cooperation of regional countries," the Chinese embassy in Argentina said in a statement on Tuesday.

Bessent said the U.S. was not considering a credit line directly to Argentina like the one extended by China. He said Beijing had shown a "very good faith effort" in conjunction with the IMF deal, and would be rolling forward the $5 billion drawn down by the previous Argentine government.

He said Milei's government should eventually have enough foreign exchange inflows to repay that amount as it stayed the course on economic reforms.

President Donald Trump has sought to expand ties with a handful of leaders in Latin America, including Salvadoran President Nayib Bukele, who visited the White House on Monday, and Ecuadorean President Daniel Noboa, who met with Trump in Florida last month.

Bessent did not say whether Argentina, which received the 10% base rate in Trump's recent reciprocal tariff announcement, could achieve a zero tariff rate, saying he told Argentine officials to bring their "A game" for negotiations.

Asked if any country could negotiate a zero tariff rate, Bessent said the negotiations were focused on "a whole box of things we've got to overcome: tariffs, non-tariff barriers, trade barriers, currency manipulation and subsidization of labor and facilities."

(Reporting by Andrea Shalal, David Lawder, Ismail Shakil and Ryan Patrick Jones; Additional reporting by Liz Lee in Beijing; Editing by Sarah Morland, Sonali Paul and Kim Coghill)