How the Trump administration learned to love foreign aid

Mr Trump set it up in his first term; its loan book is capped at $60bn, mostly raised from private investors. The White House wants to lift that to $250bn, which will need congressional approval. Officials at all three say they will scrap most handouts, instead lending at close to commercial interest rates or making equity investments. Anything that does not turn a profit must serve anarrow set of priorities to avoid being considered a waste of public funds.

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US rarely extends bilateral bail-outs, leaving it to the IMF.

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On what can money be spent? One use is supporting friendly leaders. America rarely extends bilateral bailouts, leaving it tothe IMF. Now Mr Bessent is not only rescuing Argentina, he has declared unconditional support for Mr Milei. Despite Mr Trump’s isolationist tendencies, the bailout shows he is willing to be generous to allies. America may struggle to recover funds drawn from the facility, as Argentina is burning through foreign reserves to protect the peso. Even after the bailout, it still probably lacks the dollars to cover next year’s imports and loan repayments.

Mr Trump is also willing to pay to hurt rivals. China is the world's biggest bilateral cred-

itor. According to researchers at the College of William and Mary, it has spent $185bn since 2016 on bailouts alone, second only to the IMF. That has become a problem during tariff negotiations. American officials had hoped to persuade more trade partners to place duties on China, but it is difficult to do so when countries are indebted to Chinese creditors.