Lessons from Argentina: Javier Milei at Davos

Key points.Milei's reforms deliver results: Achieved Argentina's first fiscal surplus since 2009.China policy shift: Milei embraces closer ties with China despite past criticism.Mercosur dilemma: Weighs leaving the trade bloc for a US deal while seeking balance..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Manuela Tobias___STEADY_PAYWALL___.Little more than a year after storming to the presidency with a mandate to rip up the rule book and do whatever was needed to turn Argentina around, Javier Milei feels vindicated in his tear-it-down approach to governing. .But he's also learning its limits..Milei, who attended Donald Trump's inauguration in Washington this week before flying on to the World Economic Forum in Switzerland, was full of praise for the US president's promised "golden age" during an interview with Bloomberg Editor-in-Chief John Micklethwait in Davos. .He equally displayed a pragmatic streak that risks being at odds with the new administration..Asked about his views toward China, having previously slammed Beijing as "assassins," he referred to "some very positive meetings" with Chinese Embassy officials in Argentina and with President Xi Jinping during last year's Group of 20 summit in neighbouring Brazil. ."We consider we have complementary economies and we have a lot to do together — they're great trade partners," Milei said. "The idea is to deepen the commercial relationship." That includes with an upcoming visit to China. .It's a very different tack to Trump, who has just threatened tariffs of 10% on China from February, and whose Secretary of State Marco Rubio is a noted China hawk. ."Well, sometimes one has to learn," Milei said, when asked about his new appreciation for China in office, eliciting laughs and applause from the audience. "Don't you learn every day? Well, if I don't learn, I hurt Argentines. I have extra pressure to learn fast.".Milei was in an ebullient mood, cheered on by an appreciative Davos audience. He has some justification for a victory lap after delivering Argentina's first fiscal surplus since 2009 and wrangling monthly inflation to under 3% — from over 25% when he took office in late 2023. .But the challenges ahead remain gargantuan. Milei has promised to remove currency and capital controls this year, just as Argentines go to the polls for midterm elections. Any misstep in their removal could send inflation spiralling. And the need to spur growth is urgent. .Milei said he would leave Mercosur if necessary to cement a free-trade agreement with the US, although — in another display of pragmatism — added that he hopes to reach a deal without needing to take such drastic action. He demurred on whether he had discussed a potential agreement with Trump or members of his administration while in Washington. But, he said, his government has been "working very hard" on a deal with the US..Asked if he would exit the South American customs union, Milei paused before saying yes, if such an extreme move were necessary..Read more: 🔒 The Economist: Javier Milei has turned Argentina into a libertarian laboratory."But there are mechanisms that can be used even within Mercosur, so we think it can be done without necessarily having to leave," he said..Mercosur, the bloc originally formed by Argentina, Brazil, Uruguay and Paraguay, represents a major potential hurdle to such an agreement. The bloc has in the past pushed back against its members negotiating individual agreements, as it did when Uruguay sought to join one of Asia's biggest trading pacts in 2022. Leaving Mercosur would in any case be extremely painful for Argentina because Brazil is the main destination for its exports. .Javier Milei arrives at Bloomberg House during the World Economic Forum in Davos..A senior Brazilian official said the comments were the latest instance of Milei taking a practical approach to relations with Argentina's major partners, after the EU-Mercosur deal. Milei is playing the game of suggesting he could leave Mercosur in order to avoid friction with Trump, but Brazil sees no concrete movement from Argentina toward abandoning the group, the official said, requesting anonymity to discuss sensitive matters..As for Trump's use of tariffs, Milei said that it would be disrespectful to offer an opinion — before going on to offer a justification..Trump, he said, understands geopolitics very well, and uses tariffs as a strategic tool. "It's not that he's protectionist," Milei said. "If you fail to understand the playing field that Trump is playing on, it will be hard to understand his vision. But the guidelines he is putting forward will create a much better world.".Milei displayed some of the idiosyncrasies that have endeared him to the right. Describing himself as a "libertarian liberal, not just a silly liberal," he said that his administration is slashing regulations — "about four every day" — and insisted that he is an outsider, not a real politician, despite his polished performance. .The Argentine leader said he plans to tap capital markets after he lifts the country's web of currency controls, although he did not provide a specific timeline. Milei highlighted his team's commitment to sticking to their zero-deficit goal when asked about the return to international bond markets. Economy Minister Luis Caputo previously told investors in New York that the goal was to tap money managers by 2026..Asked about governments in Europe and whether they were too soft to take a page out of his book, he stressed the imperative to slash regulations and government spending and pursue "freedom." On that front, he said, "next to me they are all timid.".Read also:.In conversation: Argentine president Javier Milei talks economy, China, Trump and more🔒 Argentina's president Javier Milei faces economic turbulence as inflation soarsJavier Milei is proving more pragmatic than radical.© 2025 Bloomberg L.P.

Lessons from Argentina: Javier Milei at Davos

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