Is Argentina influencing the US?

As Argentina’s libertarian President Javier Millay marks a year in office, his economic recovery efforts are still a work in progress, but his policies are proving influential in the US.

Miley came to power with a mission to reduce public spending in a country that had lived beyond its means for years.

Despite his harsh austerity measures and continued growth in povertyit is still supported by just over half the population survey conducted earlier this month organization CB Consultora.

This level of popularity is now similar to Donald Trump. Roughly half of US voters backed the president-elect in last month’s presidential race – with Trump hailing Millais as someone who could “make Argentina great again”.

Meanwhile, tech billionaire Elon Musk, who looks set to play a key role in the next US administration, also praised Miley, saying Argentina has “experienced a huge improvement” under his leadership.

But what do Trump and Musk see in Miley? And are they as close ideologically as is often assumed?

Milea’s greatest achievement, the one most appreciated by Argentines, is his success in reducing inflation. But he has caused a stir in the US over his deregulation, which has been seized upon by small-government activists seeking to downsize the state in Washington in the vein of what is happening in Buenos Aires.

In Millais’s initial package of measures, he cut government fuel subsidies and halved the number of government ministries.

He is now trying to implement plans for a massive sale of state-owned companies, including the country’s flagship airline, Aerolineas Argentinas, which was already privatized once before renationalized in 2008.

All this is music to the ears of Elon Musk, who is tasked with a similar cost-cutting initiative under the banner of the so-called Department of State Efficiency – a misleading name as it is an advisory body and not an official government department.

Musk and his co-head of the department, billionaire Vivek Ramaswamy, have said they want to reduce federal regulations, control mass layoffs and close some agencies entirely.

Musk has talked about cutting federal government spending by $2 trillion (£1.6 trillion) – about a third of annual spending. According to him, Millais is doing a “fantastic job” in Argentina, “deleting entire departments” – and he would like to follow suit in the US with Trump’s blessing.

But long-time observers from Latin America are skeptical.

Monica de Bolle, a senior fellow at the Peterson Institute for International Economics in Washington, says that “taking Miley’s inspiration for shrinking government makes no sense.”

“The situation in Argentina is very special for Argentina because it was about eliminating decades of mismanagement of public resources. It has nothing to do with the US.”

Ms de Bolle says Argentina had no choice but to take action because government overspending was so excessive that the country “went into crisis every few years”.

“It’s good for Argentina, but not for anyone else.”

Marcelo J. García, director of the Americas at global consulting firm Horizon Engage in Buenos Aires, says Milli’s decision to wield a chainsaw on the campaign trail as a sign of his approach to government was a “masterpiece” of political marketing that “captured the imagination of small-state activists around the world.”

But he argues that while Musk’s own business interests would benefit from less government regulation, that’s not necessarily what Trump wants.

“I’m not sure that Trump’s platform is compatible with small government like the Milei chainsaw,” he told the BBC.

He notes that Trump’s policies “require big government in some areas,” such as border wall construction and mass deportation of illegal immigrants. “You can’t do these kinds of large-scale programs with a small government.”

In Millie’s opinion, infrastructure projects are better left to the private sector and have nothing to do with the government.

Miley and Trump are on the same side in the global culture wars, denouncing what they see as a “woke agenda.” But in economic terms, their ideas are very different.

Miley is an ardent free trader and Argentina is a member of the South American trade bloc Mercasur, which also includes Brazil, Paraguay and Uruguay.

While he advocates for the last MERCOSUR free trade agreement with the European Union, he doesn’t like how the organization refuses to allow individual member countries to make their own deals. As a result, according to him, Mercasur “turned into a prison”.

“If the bloc is not a dynamic engine that promotes trade, stimulates investment and improves the quality of life for all citizens of our region, what is the point?” he said at the MERCOSUR summit in Uruguay earlier this month, where the EU deal was signed.

Trump also has beef with his own regional trade alliance, the US-Mexico-Canada Agreement (USMCA), but for reasons that are the opposite of Miley’s.

Trump wants to renegotiate the USMCA, an agreement he himself negotiated during his first term in office, as a way to protect American manufacturing and keep US jobs.

He even found a way to arm the alliance by threatening to impose the alliance empty tariff 25%. on goods from both Canada and Mexico unless they protect their shared borders with the US.

Monica de Bol doubts that Trump shares Musk’s enthusiasm for a smaller state: “You can’t be a populist nationalist and care about the size of government. So Trump doesn’t care. He put Elon there because it’s fun to have someone. there’s a lot of noise.”

The economic debate continues and continues in both the US and Argentina. But ultimately, if half of your population supports you, that means the other half doesn’t. Trump will have to deal with it after his inauguration on January 20, but Miley is already dealing with her own polarized population.

As Marcelo J Garcia sees it, Miley is a “divisive leader” who did not try to defeat his opponents.

“The other half of the country that didn’t support him may never support him, no matter how good the economy is, because he doesn’t want them to support him,” he says.

“Leaders tend to want to please everyone. That’s not the case with Miley,” he adds.

In his opinion, this is a real weakness: “You can’t build a long-term sustainable political project if you don’t move towards the people who didn’t vote for you.”

Miley’s next major test of public opinion will come in October 2025, when mid-term elections will be held in Argentina. That could prove crucial in deciding whether his small-government revolution defines the country’s future — or, like previous attempts at reform, it fizzles out.