As the US administration shifts its focus away from Europe and Asia (though for how long remains anyone’s guess) back to its Monroe Doctrine backyard, South America's two largest economies find themselves on opposite sides of Donald Trump's ideological ledger. Argentina basks in the glow of unprecedented American financial support, whilst Brazil weathers punitive tariffs imposed purely to protest the prosecution of the president's political ally. The disparity betrays a troubling truth: Washington's Latin America policy has devolved into a personality contest, where economic logic takes a back seat to political theatre.

Just as Argentine authorities burned through $1bn in reserves within 48 hours defending the peso from politically-driven turmoil, Treasury Secretary Scott Bessent last week announced America would deploy "all options on the table", including a proposed $20bn currency swap and direct purchases of sovereign bonds, to prop up what he called a "systemically important ally." Meanwhile, Brazil faces 50% tariffs on its exports to America – from beef to coffee – despite running a consistent trade deficit with the United States. The stated reason? Retaliation for Brazil's Supreme Court convicting former president Jair Bolsonaro on charges of attempting a coup d'état.

Perhaps unsurprisingly, Trump's approach echoes a certain rock-ballad romanticism: the belief that ideological friends will be friends “right till the end,” holding out hands when all hope is lost. But international relations rarely follow the script of stadium anthems. Banking on personal chemistry to override economic realities is a dangerous gambit. And while warmongering against Venezuela, an oil-rich failed state under leftist autocracy, plays well across the US political spectrum, Trump's contradictory posturing towards Brazil and Argentina presents a harder sell. How does one explain bailing out Buenos Aires and punishing Brasília, when both policies harm American wallets?

The Bolsonaro factor

Trump's intervention on behalf of his “mini-me of the Tropics”, whom he apparently believes is suffering a witch hunt at the hands of leftist judges, represents an extraordinary breach of diplomatic protocol. In fact, the Brazilian judiciary's methodical prosecution of Bolsonaro and seven co-conspirators, including generals and cabinet ministers, consecrated the nation's institutional maturity. For the first time in Brazil's history, a failed coup has been tried in civilian courts rather than swept aside. The 27-year sentence handed down in September sent an unmistakable message: democratic institutions will no longer tolerate attempts to subvert the popular will.

But far from being impressed by this textbook application of democracy, Trump has responded with economic warfare, deploying tariffs as a cudgel to interfere with Brazil's judicial process. The irony is rich: these measures harm American consumers more than Brazilian producers. From January to July, Brazil exported 199.7 thousand tons of beef to America – around 23% of the US’ total beef imports – underlining the country's crucial role in feeding American consumers whilst the domestic beef industry stumbles due to drought and cyclical herd decline. The bottom line is, Trump's tariffs threaten to inflate grocery bills for his red-meat-loving base.

Brazil, for its part, has responded with equanimity. Foreign Trade Secretary Tatiana Prazeres announced plans to accelerate diversification efforts, prioritising markets in Mexico, Canada and India whilst deepening ties with China and other BRICS partners. The episode merely reinforces a trend already well underway: the US share of Brazilian exports has steadily declined as Latin America’s biggest market pivots towards Asia and Europe.

The economic illogic becomes even more apparent when considering America's actual trade relationship with Brazil. Despite Trump's claims to the contrary, official data show America runs a consistent surplus with the world's fourth-largest democracy. The tariffs appear driven in large part by Jair Bolsonaro's son Eduardo's relentless lobbying in Washington, combined with Trump's personal sympathy for a fellow strongman who, like him, refused to accept electoral defeat and inspired a violent mob of supporters to storm government buildings.

Milei's moment

Argentina presents the inverse scenario. President Javier Milei, the self-styled anarcho-libertarian who consults his dead dogs through a medium, has become Trump's favourite Latin American leader. The mutual admiration society reached peak absurdity when Trump adopted the slogan "Make Argentina Great Again" and offered what he termed his "full endorsement" for Milei's 2027 re-election campaign.

To be fair, Milei has delivered impressive early results. Annual inflation has plummeted from over 200% when he took office in December 2023 to 39.4% by June. He achieved a fiscal turnaround of five percentage points of GDP in just two months—a feat economists describe as previously unthinkable in Argentina. Monthly inflation has remained below 2% for four consecutive periods, whilst the government has maintained primary surpluses.

Yet these achievements came through brutal recession and wage compression, with many workers and pensioners experiencing declining purchasing power compared to early 2023. Milei's party suffered a devastating defeat in Buenos Aires provincial elections in September, whilst his sister – and political mistress – Karina faces corruption allegations. Legislative rebellions have successfully overturned presidential vetoes on spending measures, sparking capital flight, investor distress and a run on the peso.

This is where American support becomes crucial – and controversial. Bessent's promise of a $20bn swap line and bond purchases amounts to a massive bet on Milei's political survival. Yet the Treasury Secretary hedged carefully, stating that "immediately after the election, we will start working with the Argentine government on its principal repayments", suggesting Washington wants to see October's midterm results before opening the cheque book.

Senator Elizabeth Warren has already fired warning shots, lambasting plans "to use significant emergency funds to inflate the value of a foreign government's currency" whilst "cutting health care for millions of Americans at home."

But opposition crosses party lines. Republican Senator Chuck Grassley complained that America would “bail out Argentina while they take American soybean producers' biggest market,” adding that “family farmers should be top of mind” in any negotiations.

The criticism resonates because it highlights an uncomfortable truth: Trump is simultaneously harming two key constituencies, using taxpayer money to bail out Argentine bondholders whilst his Brazilian tariffs drive up prices for American consumers

The China conundrum

Both relationships are complicated by Beijing's growing foothold in South America. Despite fierce campaign rhetoric about distancing from China, Milei quietly renewed a $5bn currency swap with the People's Bank of China. Trade with Beijing has actually expanded under his administration, with volumes doubling in some categories. Brazil has gone even further, accelerating its pivot towards the Asian superpower and other BRICS partners in response to American tariffs − a relationship Chinese Foreign Minister Wang Yi now calls “the best in history.”

The contradictions deepened last week when Argentina's emergency tax holiday for grain exports backfired spectacularly on American interests. Buenos Aires had eliminated its 26% soybean levy to encourage farmers to liquidate much-needed dollar holdings, but the move triggered such intensive Chinese buying that Argentina hit its $7bn sales threshold in just three days. The buying frenzy redirected Chinese demand away from American suppliers already struggling with retaliatory tariffs, prompting Bessent to hastily announce that Washington was “working with the Argentine government to end the tax holiday.” Having reached its revenue target whilst heeding Washington's grievances, the Milei administration promptly reinstated the levies.

Trump has thus achieved the opposite of his intentions: his ideologically rooted policies are pushing both countries closer to Beijing, undermining his administration's stated goal of reducing Chinese influence in Latin America.

Electoral arithmetic

The sustainability of both approaches faces imminent tests. Argentina's October midterms will determine whether Milei can secure the legislative majority needed for his ambitious reform agenda. Current projections suggest his La Libertad Avanza party will struggle to overcome the combined opposition of Peronists emboldened by recent provincial victories.

In Brazil, meanwhile, Trump's intervention has paradoxically boosted President Luiz Inácio Lula da Silva's flagging popularity ahead of next year's election. The tariffs have united even moderate conservative Brazilians against perceived American bullying. Tarcísio de Freitas, São Paulo's governor and the emerging centre-right presidential candidate, has distanced himself from both Bolsonaro and his American patron.

When hope is lost

How long can ideology trump economics? Market realities suggest not very long. Reuters reports that Trump's recent softening stance towards Lula, a prelude to a possible meeting in the coming weeks, may have been prompted by warnings from American agribusiness about the impact of Brazilian beef tariffs on domestic prices. The president who promised to protect American workers can hardly afford to be blamed for inflating their grocery bills.

Similarly, Argentina's fundamental vulnerabilities persist despite American promises. The country maintains an $18bn currency swap with China and carries a renegotiated IMF programme requiring strict conditionality, with peak exposure to the fund expected to reach some $58bn by 2026. Government bond yields remain between 16% and 26%: levels that effectively lock it out of international capital markets. Even massive American support may prove insufficient if October's elections perpetuate the legislative deadlock that has already forced Milei to water down his reforms.

The deeper question is whether Washington can afford to conduct Latin America policy as an ideological beauty contest. China stands ready to fill any vacuum left by American caprice, offering infrastructure investment without political strings attached. European and Asian partners offer enticing alternatives to countries tired of Washington's mood swings. Most importantly, the region's voters have repeatedly shown they prioritise economic stability over ideological purity – the very reason why Milei triumphed in 2023 over the free-spending Peronists whose interventionist policies had plunged Argentina into yet another crisis.

But that pragmatism cuts both ways. Bessent’s dollars and IMF praise may not save Milei from the harsh judgment of Argentines next month, as many face declining living standards from his sweeping austerity measures. In Brazil, voters are distancing themselves from the toxic far-right narrative embodied by Bolsonaro and amplified by Trump's intervention. The likely result? Both countries gravitating towards the centre, whether through Tarcísio de Freitas in Brazil or, ironically, a Peronist revival in Argentina led by Axel Kicillof. Despite his disastrous tenure as Kirchner's finance minister, Kicillof has successfully rebranded himself as the pragmatic governor of Buenos Aires province. Voters, it seems, have remarkably short memories when desperation sets in.

Ultimately, Trump's erratic interventionism reveals the poverty of treating complex economies as simple morality plays. Brazil's democracy deserves respect for prosecuting an attempted coup, not punishment for following the rule of law. Argentina's pro-market reforms merit conditional support based on economic fundamentals, not personal chemistry between presidents. Until the MAGA administration learns to separate personality from policy, it risks accelerating America's loss of influence in its own backyard to more pragmatic rivals.

Trump may genuinely believe that political friends will be friends "right till the end.” But in the unforgiving world of international economics, bills come due regardless of personal affection. When American consumers face higher prices and Argentine reforms falter despite American largesse, ideological bromance will provide cold comfort. Reality, as always, will have the last word.

Marco Cacciati is the regional editor for Latin America at bne Intellinews.