Milei's bet on China threatens an ugly fallout with his idol
But 18 months is a long time in geopolitics.
Milei, one of the few world leaders to attend the presidential inauguration of his political hero Donald Trump in January, has performed a remarkable political U-turn.
On Monday, Milei rewrote the visa rules to make it easier for Chinese people to visit or work in Argentina.
A week earlier, he unlocked a $5bn (£3.7bn) China-backed hydroelectric project in the country's south, which had been fractiously frozen since before he took office.
And in April he renewed a currency swap arrangement with China, worth about 35bn yuan (£3.6bn) – a move that prompted an alarmed White House to dispatch Scott Bessent, the US treasury secretary, to Buenos Aires to deliver a dressing-down.
By cosying up to China, Milei is risking his idol's ire. What has changed?
Economics vs politics
On the campaign trail in 2023 Milei told Argentine voters: 'I am not going to do business with any communist.' He has previously branded the country a 'bloody dictatorship'.
But by last December he was having a sit-down with Xi Jinping, the Chinese president, on the sidelines of the G20 summit in Rio, and said he was up for a trip to Beijing.
'If you compare Milei during the campaign to Milei as president, he has softened his views on many, many issues. One of them is China,' says Bruno Binetti, an associate fellow at Chatham House, a think tank.
'He is adapting to the realities of governing, without this affecting his core beliefs and identity.'
While Trump and Milei might be political soulmates – radically anti-woke, anti-regulation, anti-net-zero – Argentina cannot do without China's appetite for its exports, nor its investment into areas like mining and energy.
'If you want the economy to grow, if you want to show that Milei's economic model can generate growth, then you need good ties with China,' Binetti says.
Milei has tried to separate this economic need from Argentina's wider political and diplomatic relationships, from his radical reform agenda – which has won him admirers worldwide, including Kemi Badenoch, the Tory leader.
He has refused to join the anti-Trump Brics group of Brazil, Russia, India, China and South Africa.
'We must separate the geopolitical question from our commercial question,' Milei told the Wall Street Journal last year.
Trading and economic relationships should be driven by business and he would not be 'meddling in whatever the private sector decides'.
But economics and politics don't separate so easily, particularly in Trump's binary, zero-sum world.
Peter Lamelas, Trump's nominee as the next ambassador to Argentina, told a US Senate committee hearing this week that his mission was 'to reduce the malignant influence of opposing powers' in Latin America – and that includes China.
'Argentina is essential, critical to opposing authoritarian regimes like Venezuela and China,' he said.
Jim Risch, a Republican senator and the committee's chairman, urged Lamelas to fight China's 'expanding influence' in the region and to 'reduce China's technological and financial influence in Argentina'.
Snubs and dealmaking
This was not an exchange the two men might have anticipated having. When Trump returned to power, Milei – whom the American calls 'a friend' and 'my favourite president' – would have been at the very bottom of the White House's list of leaders to worry about.
Not only was Milei at Trump's inauguration, but he came back a month later to publicly present Elon Musk, then setting up his department for government efficiency, with a version of his trademark bureaucracy-slaying chainsaw.
The gift – which was inscribed with Milei's catchphrase 'Long live freedom, dammit!' – was handed over at a Conservative Political Action Conference, where Milei also met Trump.
The two leaders discussed Argentina's 'groundbreaking economic reforms', according to a White House readout.
Milei was back in the US yet again in April, heading to Trump's Mar-a-Lago resort for the 'American Patriots Gala', where he picked up an award recognising his 'unwavering dedication to freedom, market economics and conservative values'.
But this time, Trump was unavailable. Supposedly a problem with the US president's helicopter prevented him from getting to Florida in time to catch Milei on this flying visit.
That wasn't the only snub. The day before, Trump had unveiled his 'liberation day' tariffs – and there was no exemption for Argentina from the 10pc worldwide hit.
Today, Trump's Aug 1 trade-deal-or-tariff deadline is looming and there is not yet any sign of any agreement with Milei that might ease the pain for Argentina's soy and beef exporters.
By contrast, in early May several Chinese officials visited Buenos Aires to sign a deal to buy $900m of Argentine soybeans, corn and vegetable oil.
The White House did reportedly help Argentina to secure a new $20bn loan programme from the International Monetary Fund in April.
Mauricio Claver-Carone, Trump's special envoy for Latin America, said he hoped this might supplant the Chinese currency swap agreed at almost the same time.
'What we would like to see, eventually, is the end of the famous line of credit Argentina has with China,' he said.
'That line of credit is extortionate, and as long as they maintain that line of credit, China will always be able to extort.'
Beijing shot back. 'Fair-minded people are able to tell who is extorting and coercing others and making trouble,' said Chinese foreign ministry spokesman Lin Jian.
Balancing act
Milei will probably try to keep the two superpowers in some kind of balance. But both will be looking to use carrots and sticks to tip favour their way.
China seems to be making most of the running right now, and has ambitions to get further ahead of Trump. A Chinese official told the Argentine newspaper Clarin earlier this year: 'We're doing well, but not as well as we'd like'.
If Beijing is appealing to Milei's pragmatism, Washington can count on his passion. His friendship and ideological affinity with Trump will likely stop the scales from tipping too far towards China.
'Milei sees himself clearly as a global leader figure in a Right-wing, pro-West, pro-market movement. And his alignment with Trump is a big part of that identity – it makes him feel part of something bigger,' Binetti says.
'You'd think that given Milei's symbolic role in some Trumpist circles in the US, he would get a little bit more leeway.'
If Milei's rapprochement with the Chinese continues to deepen, he might end up testing just how far that leeway extends.
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