We don’t yet know whether the economic bailout of Argentina will work, but the political bailout surely has. After Donald Trump tied U.S. financial support to the outcome of Argentina’s midterm elections—if his libertarian pal Javier Milei lost, “we’re gone,” Trump told reporters—Milei’s party secured a comeback victory, taking 41 percent of the vote in recent midterm elections. It was a victory aided by holding aid for the Argentine economy hostage, but a victory all the same.
Milei will now have more leeway to pursue his austerity agenda, especially as it will be backstopped by humble soybean farmer Scott Bessent and the U.S. government. Already, $20 billion has traveled from the Treasury to Argentina for stabilizing the peso (something that was deemed a “mission-critical” function despite the government shutdown), and another $20 billion private-sector loan could be on the way, if the U.S. guarantees it. As Bharat Ramamurti notes, the lightning speed of this bailout stands in contrast to the molasses that collects around any attempt to aid America’s poor.
The bailout also may not even work. Inflation in Argentina remains over 200 percent and the peso’s value was still plummeting, even after the country took $42 billion in relief from the International Monetary Fund, the World Bank, and the Inter-American Development Bank. Maybe U.S. bailout funds can arrest the slide, and more important, salvage Bessent’s investor friends, who bet on Milei’s program in international markets. But Argentina’s total debt is so unsustainable that the commitment might serve as a short-term sugar high, giving enough space for hedge funds to get out, but not enough credibility to keep the country’s economy afloat.
To add a real-economy boost to the financial machinations, Trump announced a significant increase in imports of Argentine beef. That would help a major national industry and ensure another truckload of U.S. dollars for currency stabilization. But this is a classic Trump maneuver: solving one perceived problem, while causing another.
Trump pitched the Argentine purchase not as a secondary bailout of an ally but a solution to high U.S. beef prices. Quadrupling the quota of Argentine beef to 80,000 metric tons would add steaks and hamburgers to grocery stores. But domestic cattle ranchers are going ballistic.
Trump pitched the Argentine purchase not as a secondary bailout of an ally but a solution to high U.S. beef prices.
Thin domestic herds have sent prices for cattle higher, and domestic ranchers were on the cusp of having profits to reinvest in building up their herds for the first time in years. But substituting their beef imports would destroy that possibility and send cattle ranchers who have endured economic stress into ruin. Cattle sold at auction are based on future prices, and ranchers have already seen revenues fall. (Those price drops have not yet been reflected in lower prices for consumers, an echo of the pandemic era when the spread taken by middlemen meatpackers magnified.)
The National Cattlemen’s Beef Association, not exactly an enemy to Republicans, condemned the president for “manipulat[ing] markets” and ignoring ranchers’ needs for assistance with the causes of thin herds: drought, the return of parasites like the New World screwworm, and the low ebb of the “cattle cycle.”
Senate Majority Leader John Thune criticized the idea, as did 16 Senate Democrats and new Republican apostate Rep. Marjorie Taylor Greene; other ranchers spoke of “betrayal” by Trump. At a caucus meeting on Tuesday, Republican senators lambasted Vice President JD Vance about the imports, urging the administration to focus on building domestic herds.
“The Cattle Ranchers, who I love, don’t understand that the only reason they are doing so well … is because I put Tariffs on cattle coming into the United States,” Trump said in a social media post. Ranchers did not appreciate the false assertion that they are “doing so well,” nor the implication that his supporters are too stupid to understand his plans. Tariffs are not really the cause of small domestic herds—cattle prices were high before he came into office—and quadrupling the Argentine quota is the opposite of restricting imports.
There’s a tension here between what’s good for cattle ranchers and what’s bad for beef consumers, and by trying to fix one—and helping out his buddy Milei in the process—Trump is hurting the other. But that doesn’t have to be the structure of the U.S. cattle market.
J.D. Scholten, a Democratic member of the Iowa House of Representatives, told me that the economy in his southwestern section of the state is bleak. “It’s been a couple years of places all across the state laying off workers,” he said. “The farm economy was in recession even before the tariffs … I stopped at a restaurant in Sioux City a couple weeks ago, and they said no one’s coming in.” The grim picture mirrored a New York Times article that found significant declines in gross domestic product in Iowa in the first three months of the year.
But rather than solely blame Trump policies, Scholten linked the recession to continued consolidation on all sides of the food economy that is squeezing the family farmer. Inputs like fertilizer (where 90 percent of the market is imported) and equipment have skyrocketed in price, as a few firms predominate. Equipment and even bank loans have gotten more expensive.
On the output side, the top four meatpackers buying American cattle control 85 percent of the market as well. “The solution isn’t giving them more foreign beef to manipulate prices with,” said Dan Osborn, the independent Senate candidate from neighboring Nebraska, who has been highlighting the issue. “The solution is breaking up the monopoly [and] enforcing the antitrust laws we already have on the books.” By contrast, Osborn’s opponent, Sen. Pete Ricketts (R-NE), has said nothing on this issue except to parrot the words “market-based solutions” repeatedly.
This squeeze has created a ridiculous situation where America imports substantial amounts of food, despite having vast amounts of highly fertile farmland. While some commentators have pointed to Argentina only totaling 2 percent of total beef imports last year to say that quadrupling the quota won’t create any problems, the larger point is that a record amount of beef comes from abroad and prices are still high for shoppers.
That’s what needs to be reformed, Scholten said. “Our food system is in serious danger … Ninety percent of Iowa food is imported. It’s the same in Indiana. We grow all of this but for whom, who’s making the money here? It’s not the farmers, it’s multinational corporations. We’re used as pawns.”
When he was briefly in the race for U.S. Senate in Iowa, Scholten released a food and agricultural policy blueprint that foregrounded breaking up food-related monopolies in seeds, fertilizer, grain, meat, dairy, and railroads. He called for a strategic fertilizer reserve to stabilize supply of the key input, reforms to commodity payments that only benefit the richest farmers, limits on foreign and investor purchases of farmland, regional food systems that focus on local supply chains rather than international trade, and greater crop diversity rather than “fencerow to fencerow” planting that has harmed profits and created environmental harms, with Iowa among the top in the nation for cancer rates.
Both Scholten and Osborn also support mandatory country-of-origin labeling (COOL), so consumers know where their food comes from. The U.S. Department of Agriculture recently expanded a voluntary COOL program, but mandatory labeling would provide more certainty, and prevent the games whereby foreign producers can claim their products to be made in the USA. “I view it as borderline fraud,” said Scholten. “You can have a South American cow born there, raised there, processed there, and then brought here and a ‘Product of USA’ label gets slapped on it.”
In Congress, a COOL bill was introduced last week by four Republicans (including Freedom Caucus stalwarts Chip Roy of Texas, Tom Massie of Kentucky, and Paul Gosar of Arizona) and progressive Rep. Ro Khanna (D-CA). “I had a conversation with ranchers and others of the importance of supporting our domestic production of cattle,” Khanna told the Prospect in an interview. “I think it supports local ranching. That doesn’t mean I think we need these insane tariffs on food products.”
The COOL bill is a component of an agricultural policy that favors sustainable production and open markets instead of Big Ag profiteering. It also happens to be the same policy framework Republican senators urged Vance to adopt. But while it’s good that some Democrats are also coming around to talking about these issues—a recent Rural Policy Action Report has a ton of other ideas—the Democratic brand is so trashed among rural communities that the people carrying those ideas don’t get a fair hearing, Scholten said.
“There are a lot of farmers and ranchers who are upset with Republicans but really hate Democrats,” said Scholten, who has written a series of state-level bills in Iowa under the heading “Reforming Iowa’s Farmer Independence.” Trump’s tone-deaf policies and inability to think structurally about the farm economy gives Democrats an opportunity, he thinks. “We’re borrowing money from China to pay our farmers to not sell our food to China. It doesn’t make sense. To me the winnable message is allowing our farmers to be more independent.”