Argentina’s hopes for a massive financial rescue package have hit a dramatic snag, as major U.S. banks abruptly backed out of a US$20 billion loan deal—leaving the South American nation scrambling for a smaller, short-term fix to its mounting debt problems. The move, reported by The Wall Street Journal and confirmed by several outlets including CT Mirror and The Herald, marks a significant shift in the international financial support landscape for President Javier Milei’s administration, coming just weeks after a hotly contested midterm election and a flurry of diplomatic activity between Washington and Buenos Aires.
On November 21, 2025, JPMorgan Chase, Bank of America, and Citigroup—three of America’s banking titans—pulled the plug on a planned US$20 billion loan to Argentina. Instead, talks have pivoted to a much smaller, short-term credit package, possibly a US$5 billion repurchase agreement, or "repo" facility, according to sources cited by The Wall Street Journal. Under this arrangement, Argentina would temporarily swap a portfolio of government bonds for much-needed U.S. dollars, using the funds to cover a looming US$4 billion debt payment due in January 2026. The government would then repay the repo facility, likely within a few months.
This abrupt change comes after weeks of speculation and high-profile statements. In October, U.S. Treasury Secretary Scott Bessent told reporters that the private sector was preparing to invest in Argentina’s sovereign debt as part of a US$20 billion facility. This would have matched a separate US$20 billion currency swap already arranged by the U.S. Treasury and Argentina’s central bank, bringing the total potential aid package to a staggering US$40 billion. As Bessent put it, “It is a private sector solution to Argentina’s upcoming debt payments. We’ve actually been working on it for weeks.”
The currency swap—authorized in October and confirmed by Bessent in mid-November—was designed to shore up Argentina’s reserves and stabilize its battered peso. The timing was no coincidence: the deal came just days before Argentina’s October 26 midterm elections, a critical moment for President Milei, whose libertarian agenda and promises of economic reform had polarized the nation. According to CT Mirror, the swap itself became a lightning rod for criticism in both countries, especially after then-President Donald Trump publicly linked U.S. support to Milei’s electoral performance. Critics on both sides of the equator argued that leveraging financial assistance to sway foreign elections set a dangerous precedent.
But while the U.S. government’s half of the package moved forward, the matching private sector support quickly unraveled. By late November, the banks had walked away from the US$20 billion plan, with insiders telling The Wall Street Journal that such a large facility was “no longer under serious consideration.” Instead, the new proposal—a US$5 billion repo—would offer Argentina only a temporary lifeline. Talks, however, remain in the early stages and could still change or collapse entirely.
The shifting fortunes of this bailout have fueled a war of words in Buenos Aires. Economy Minister Luis Caputo, responding to a social media user’s blunt question about the news, replied, “Excellent question.” He then insisted, “The government never discussed a bailout with the banks, not about 20 billion. It’s just another ‘operation’ intended solely to spread confusion.” Yet Caputo himself had previously acknowledged, in an interview following Bessent’s remarks, that “we are working in another US$20 billion facility” in addition to the U.S. currency swap. The contradictions have left many observers scratching their heads, wondering who’s really calling the shots—and what’s really on the table.
The financial machinations are only one part of a much broader diplomatic and economic dance between Argentina and the United States. Just a week before the banks’ withdrawal, Argentina’s new Foreign Minister Pablo Quirno and U.S. Secretary of State Marco Rubio announced a sweeping trade agreement in Washington. While the details remain sketchy—critics say it’s more an “agreement to agree” than a finalized deal—the pact is widely seen as the political price tag for U.S. financial support. According to an opinion piece published in The Herald, the agreement requires 12 unilateral concessions from Argentina, just one from the U.S., and six joint commitments. It also includes provisions targeting state-owned enterprises and subsidies, with an eye on China, Argentina’s second-largest trading partner.
Yet the trade deal, like the bailout, is far from a done deal. It must still be approved by Congress in both countries, and key sectors of Argentina’s economy—from pharmaceuticals to autos to agriculture—have voiced deep concerns. The pharmaceutical industry, long resistant to U.S. intellectual property standards, fears that the agreement could drive up drug prices and hurt pensioners. The powerful car industry, closely tied to Brazil through Mercosur, is wary of U.S. advances. Even agriculture, the country’s export powerhouse, may end up giving more than it gets, with Washington offering only a modest increase in beef import quotas in exchange for broader market access.
Meanwhile, the shadow of electoral politics looms large over the entire episode. President Milei, buoyed by his midterm victory, publicly thanked Trump for his support, calling him “a great friend of the Argentine Republic.” Opposition leaders in Argentina, however, have accused Trump of meddling in their country’s elections with direct appeals to voters—a charge that echoes accusations leveled against him in other countries. The U.S. Treasury’s intervention in the foreign exchange market, which reportedly involved the sale of more than US$2 billion in dollars to prop up the peso ahead of the election, has only heightened suspicions of political interference.
For ordinary Argentines, the stakes couldn’t be higher. The country faces a daunting schedule of debt repayments, persistent inflation, and an economy still reeling from years of crisis. The prospect of a US$40 billion rescue package had raised hopes for a fresh start; the sudden scaling back of that support now leaves the Milei administration facing tough choices and even tougher negotiations—both at home and abroad.
As diplomats, bankers, and politicians continue their high-wire act, one thing is clear: Argentina’s path out of its financial quagmire will be anything but straightforward. The promise of international rescue, so loudly trumpeted just weeks ago, has given way to uncertainty, skepticism, and a renewed focus on the fine print. For now, all eyes remain on Buenos Aires and Washington as the next chapter in this financial saga unfolds.
