The U.S. and China are in conflict over a major currency swap deal between China and Argentina. This deal has helped Argentina stabilize its finances, but the U.S. sees it as a problem.
Last week, U.S. Special Envoy for Latin America, Mauricio Claver-Carone, called the $18 billion swap “extortion” by China and said the U.S. wanted it to end.
In response, Chinese foreign ministry spokesperson Lin Jian said the U.S. was trying to create division between China and its partners in Latin America. He defended the deal, claiming that Argentina has benefited from the swap and it has helped stabilize its economy.
Argentina, struggling with a weakened currency and low foreign reserves, has relied on the currency swap with China for years.
China is Argentina’s key trade partner, buying products like soy, beef, and lithium. Argentina renewed the swap agreement last year, and it’s set to last until mid-2026.
Claver-Carone expressed concerns about China’s influence in Argentina, especially as the country seeks a new loan deal with the International Monetary Fund (IMF).
He criticized the Chinese credit line as harmful and extortionate, claiming it gives China leverage over Argentina.
However, China argues that its investments benefit the region, while the U.S. accuses China of using debt to manipulate Latin America.
For more on this, credit Reuters for the detailed coverage.