Milei under pressure: caught between Trump's straitjacket and key negotiations with the governors

U.S. President Donald Trump shakes hands with Argentine President Javier Milei. Javier Milei's bid to become an international leader collided once again with external headwinds. Lula's victory in Brazil left him trapped and isolated. His political escape route was to coordinate with the United States an operation to smuggle out Flavio Bolsonaro, an intervention that the U.S. Secretary of State, Marco Rubio, denied. He was unable to celebrate the election in Israel, and he also failed to profit in Spain, a trip that proved more profitable for Pedro Sánchez than for his far-right allies. The day after tomorrow he faces a jolt if the midterm elections end up confirming a considerable erosion of Donald Trump's power. The immediate consequence will be an even sharper rise in country risk, which already came close to 800 points, standing at 790 on Friday, the highest level since October 2025. The government lives in a state of permanent tension. The electoral year arrived early, with values that look much more like the moment of the legislative elections and the defeat in Buenos Aires Province than like a year that should have been one of relative calm. Milei feeds that state of eternal conflict. To the already strained relationship he had with Brazil, Milei added one of the most hostile acts diplomacy can carry out. Its consequences, at this point, depend more on Lula than on Milei. So far, bilateral trade has not been affected. The structurally deficitary trend for Argentina remains in terms of trade volume, but the country has a special protection in the automotive industry, Economic Complementation Agreement 14, which Lula could now put on the table. He did not do so during these nearly three years of forced coexistence with Milei. Analysts on both sides argue that it is unlikely he will play that card, but Milei put decades of diplomatic work at risk. Brazilian Senator Flavio Bolsonaro disembarks from a plane upon his arrival at the Opa-locka executive airport, near Miami, Florida, U.S., on October 28, 2026. The party most interested in maintaining and renewing the agreement should be Argentina. Today the ties are cut. There is no dialogue. Nor any coordination, which is fundamental, for example, to navigate with some margin the devaluation of the real that took place in Brazil. The last renewal was in 2019, for 10 years. Both foreign ministries should be negotiating again, especially since any investment takes between 3 and 5 years to be decided and executed, and industrialists need to know that this scenario will not change. There is concern because even before the elections, no one had sat down to discuss it. The agreement establishes that for every dollar Argentina exports to Brazil, the neighboring country can export here only 2. The pact already has update steps that will bring the difference to 3 dollars by 2029. That protection for the automotive industry could be a ground for retaliation. What most surprises international analysts is that the Milei government does not seem to care much about protecting that industry either, nor any industry. The bilateral relationship has always been sustained by logical consensus, even during Mauricio Macri's term, which Lula made a point of highlighting in his response to the former president, who had celebrated his victory. The greatest slight then was that Macri was resistant to Lula's international leadership through the growth of the Brics. "I remember with nostalgia the times when circumstantial differences between our countries were discussed and resolved in a civilized and republican manner," Lula said to Milei in the exchange with Macri. The former president cannot understand the government's foreign policy. It is one of the areas he questions the most, and one he fought hard over during those milanesa lunches in Olivos. He never managed to convince Milei. Leaders in Macri's circle are surprised to see Pablo Quirno, a man who came from the PRO, in a secondary role in decision-making. Macri's dream position was gifted to him by Lula. "That's what we always told him," reinforces an associate of the former president. The other potential point of conflict could arise at the Agency for Accounting and Control of Nuclear Materials, a binational body that guarantees that the nuclear materials and facilities of both countries are used exclusively for peaceful purposes. This model is unique in the world. There are only agreements between countries and the International Atomic Energy Agency (IAEA), but not between two countries. Despite the tensions, it currently runs on autopilot, but the political distance means no progress is being made on its development. On the one hand, the body loses international weight, but above all it is put at stake at a time when Brazil is advancing on the construction of a nuclear submarine. Javier Milei and Luiz Inácio Lula da Silva (Illustrative image Infobae). Milei still has not recognized the government of Brazil, and speculation abounds these days about what decision he will make if Bolsonaro proclaims himself president from the United States. He made a first attempt that he later deactivated, but on Friday night he issued an unsettling message, warning that he would compete in elections again but would not wait for the next electoral turn, in 2030. A poll published yesterday by O Globo showed that 3 out of every 4 voters of the Liberal Party do not back the "coup-mongering text," as they call Bolsonaro's first letter, and it states that only 38% defended it, deepening the isolation of that political sector. Milei, in his permanent war, opens and leaves yet another conflict unresolved. Meanwhile, internal pressures pile up around the President. Santiago Caputo found himself in the eye of the storm over doubts about his role in the escape. The formal head of the Intelligence Secretariat, Cristian Aguadra, will have to give explanations to the bicameral oversight committee on intelligence agencies. Meetings and requests entering that body are supposed to be secret. In this case, it became public that Unión por la Patria had requested his presence. The body is chaired by Sebastián Pareja, Karina Milei's right hand. Who leaked it?, people ask suspiciously in Congress. Caputo is Aguadra's boss. The presidential advisor is the most exposed if the Justice system moves forward with investigating how Bolsonaro's escape was financed and whether public resources were used for the operation. The web of what happened exposed a parallel foreign ministry — no longer just an embassy, as in other times. But it also laid bare Caputo's ties with marginal American sectors, outside the formal channels of diplomacy. Caputo exposed himself by stepping into the scene, an oddity for a wizard whose strings should not be seen. The most striking thing about the case is that no one defended the reasons why Argentina collaborated with Bolsonaro's flight — a kind of guilty attitude of someone who knows they are at fault. Presidential advisor Santiago Caputo. The government has long been promoting policies without a spokesperson. There are no convincing narratives. It happened with the land law last week, when no one could defend that they were reinstating a norm of Cristina Kirchner, and it was repeated last Wednesday with the changes they had to make to the national sovereignty project to comply with American demands. In the committee debate, only Damián Arabia ended up carrying the case, to present the changes. Earlier, another deputy had spoken, Federico Pelli, from Tucumán, and Lisandro Almirón closed. They did not bring any specialist to defend the law in the five meetings held. Only the Legal and Technical Secretary, María Ibarzabal, was there. All the presentations were critical of the project. Martín Menem merely rounded up the votes but avoided exposing himself. The final fate of Caputo's dream will be seen in the full session. It is scheduled to be brought to the floor on November 18. The ruling party obtained the signatures thanks to its allies, who did so in dissent. The debate right now in all the opposition blocs is how to vote: they were trapped by the government, which placed in Chapter 1 the entire defense and sanctions regime for oil exploitation and natural resources in the Malvinas, and incorporated an unprecedented state control through the creation of a National Security Council in the remaining articles. They would have to vote in favor in general and against in particular. Paradoxically, in the national sovereignty project, the United States prevailed, and the ruling party accepted limiting sanctions for companies and investment funds that hold a minority share, of up to 2%. Previously, all of them were covered. And not only that. With the changes, any company will be able to argue that it did not know. "Guarantees are given to those who were unaware of an illicit purpose," explained Arabia when announcing the modifications. The ruling party still has to build its majority to pass it. There will surely be more changes, such as Article 111, which establishes prison sentences of five to twelve years for those involved in mass disinformation campaigns financed by foreign actors — all decided by the Executive Branch with subsequent congressional oversight, which was incorporated during the committee debate. "Let's not let what happened with the moratorium happen to us," points out an allied deputy. There are more than 15 days to negotiate. Karina Milei with governors. Once again the governors were willing to play along with Milei. Those from Misiones and Catamarca, who had drawn close to Peronism, now backed the government. The most striking piece of data was the signature of Pablo Farías, of Santa Fe's Socialist Party. Governor Maximiliano Pullaro asked him for it. It wasn't even about the numbers, but he signed anyway. They needed 54 deputies and got 60. Pullaro de facto intervened in the Provincias Unidas bloc. He is also playing his own provincial internal politics. For three weeks he has had a new security bill stuck in the legislature that fails to get the votes even from his own ranks. He had already been exposed during the DNU 70 debate when he provided the last signature needed for the ruling party's majority opinion. Candidates on the run. The Karina-Caputo internal dispute also has its counterpart in the run-up to the debate on eliminating the PASO primaries. While the presidential advisor was generating one of the greatest episodes of political tension with the country's main trading partner, Karina Milei was surrounded by 13 governors in Rosario, at the presentation of the RIGI business round for domestic production. Pullaro was the host. The contrast is stark. The Secretary General endorses the possibility of reaching agreements with the governors while Caputo shelters the rebels. It happened with Luis Petri. Much of the agreement with the Radical governors is stuck in Mendoza. Petri took refuge with the presidential advisor to avoid being removed from the candidacy. The current governor, Alfredo Cornejo, has been demanding that in exchange for supporting the government. In Mendoza they took note that Caputo's entire digital machinery came out to boost Petri. "He is not our candidate," responded the Karinista wing when pressed for explanations. They are certain there was distribution of Petri content through the agency Caputo runs. Luis Petri, LLA deputy. The Radicals changed their strategy with Diego Santilli. Now they negotiate as a bloc, tired of the lack of agreements. Former Corrientes governor Gustavo Valdés took charge. "We won't close until the Radicals close," they say in Macri's PRO. The matter is more stuck in the inner ring of allies than in the broader one. All the actors consulted maintain that the project will pass, but to the government's haste, the governors answer with a tortoise's pace. It is their last chance to negotiate and they want to make the most of it. First comes the Budget, which goes to the floor on November 25. Political reform will be left for extraordinary sessions. There is no more time. Bills can only be reported out of committee until November 20. The government has a bottleneck. Like someone who won't make it to the end of the month. It is not literal, and it manages to keep going, but with an agenda that is not its own. In Deputies, the project to reform the Central Bank's Charter is still piling up, along with Defense of Sovereignty, the Budget, and Biofuels. In the Senate they await the new vehicle license plate regime, Super RIGI, and political reform. Patricia Bullrich gave preliminary approval this week to a Radical project that will touch Luis Caputo's till. It provides tax benefits for small businesses. The allies need some reassurance that there will be no competition over governors' reelections — an imaginary pact, a kind of promissory note. But in addition, they need a containment dam for the districts where they do not govern but can field competitive candidates, even above the libertarian leaders. One example is Córdoba, with Rodrigo De Loredo. They also aim at La Pampa, Catamarca, and Misiones. The question the governors ask themselves is why they should pawn their brand. The project of cover-list candidates returns. It is the only viable option to contain them from below. Jujuy is also stuck. The libertarians present Ezequiel Atauche, more closely tied to Caputo, and Tesla deputy Manuel Quintar, an ally of Karina. In the PRO they still have doubts, but they maintain that the agreement in the City for Jorge Macri's reelection is closed. The logo and the name change, everything goes from yellow to violet, but they say they have a commitment that the candidacy will be respected. Diego Santilli, Cristian Ritondo, Martín Menem, Fernando de Andreis, and Lule Menem. No one wants to sign in advance. Especially at a time when the economy shows no signs of recovery. Macri also wants to wait to see how Patricia Bullrich's game plays out. He rules no one out, only himself, as he does not want to be a candidate. In the PRO they say the agreement is also ready in Chubut and Entre Ríos, the other two districts they govern. As with the Radicals, the moment to make Santilli and Milei wait is now. No one wants to jump ahead. Yesterday the revenue forecasts came out. According to economist Nadin Argañaraz, national VAT collection for October would have fallen 7.6% in real year-on-year terms. That would make twelve consecutive months of year-on-year real declines, since November 2025. Demand for dollars does not wane. In September, 3,410 million dollars were bought, 1.3% more than in August. The number of bounced checks grew 30% in September. Equilibra reported inflation of 1.8%, trending downward, but the government announced tariff increases for electricity and gas services that could add more pressure. As an available tool, it could only postpone by one more month the fuel tax increase. Luis Caputo announced that he is not moving from his plan, to deny differences with the President. The differences are with the political table, which, without economic reactivation, sees an recovery of expectations as increasingly difficult. According to Pulso Research, the evaluation of Milei's administration reached a 66.4% rejection rate against a 28.9% approval. That is what the political wing is demanding. He has a year left to correct course, but neither Milei nor Caputo want to touch anything. They count on one added value, which for now is their great ally. Faced with the open question, that same poll showed that when asked who is the leader of the opposition, 43.5% answer "nobody."