Argentinian President Javier Milei was quick to seize on Donald Trump’s suggestion the US would not back the UK in a future conflict over the Falkland Islands.
Revealing the US was reviewing its longstanding recognition of de facto UK control, Trump said Britain was “not there to help me” with the Iran conflict – a gripe he has frequently used to criticise Nato allies.
Milei, who is facing a potentially difficult election fight next year, jumped on the opportunity to place the Falklands at the centre of political debate in Argentina.
Describing the islands as “the most important and sacred cause we have as Argentines”, he announced a televised address to outline “diplomatic progress” on resolving the sovereignty dispute.
Milei used the speech to claim Trump was assessing the US’ “historical position in regard to the Falklands”.
“That is not empty words as they understand that Argentina is a reliable partner and a valuable ally for decades to come,” he added.
Both presidents’ remarks were motivated by different factors and goals, but combined they could pose a significant issue for John Healy as the Chancellor prepares to hand down a closely-watched Budget in October.
Why does Trump care about the Falklands?
Trump has been largely silent on the sovereignty dispute between Argentina and the UK, and his comments on the issue were vague.
The President said US neutrality in regard to the Falklands was “one of many” foreign policy areas his administration had placed under review in remarks on Monday, before his comments on Iran to GB News on Thursday.
In that interview, Trump did not directly respond when asked if the US would “aid” Britain in any future conflict over the islands.
“Well look, I was there when they had the first war. That was a long time ago and I watched it so carefully, and you comported yourselves very well,” he said.
“Your country’s not doing well. Don’t forget, you get a big percentage of your oil from the Strait of Hormuz, and you weren’t there to help me.
“Your country was not there to help me. We didn’t need help, but I did ask Nato, and I asked your former leader: ‘Why didn’t you send a couple of ships?’ He said we don’t have any, and it was pretty sad, the whole thing.”
In April, a leaked memo from the US State Department proposed using the Falklands as a point of leverage over the UK, with media reports subsequently linking Trump’s raising of the issue to efforts to push Britain into raising its defence spending.
US interest in the Falklands could also be tied to concerns over energy markets.
The Sea Lion oilfield, owned by a British and an Israeli firm, is due to begin production in 2028, a prospect which has angered Argentina’s President and may have caught the eye of US officials.
Trump said US neutrality in regard to the Falklands was “one of many” foreign policy areas his administration had placed under review (Photo: Kent Nishimura / AFP)Sarah Rogers, a senior member of the US State Department, captioned a picture of herself with Milei: “Exciting things are happening in the Western Hemisphere” in a social media post ahead of the President’s planned address.
Milei used his televised speech to threaten sanctions on oil producers operating in the Falklands and the presence of Rogers has fuelled speculation the US could be seeking access to the oilfield.
Trump has been seeking ways to boost oil supply, and lower fuel costs, for the US in the wake of the Iran war and effective closure of the Strait of Hormuz.
What do Trump and Milei’s threats mean for the Budget?
While the Government will not relish the prospect of a diplomatic row with Argentina over the threat of sanctions, the most immediate concern for the Chancellor will concern the UK’s defence spend.
Healey is already under pressure over reports he will shelve his own target of spending three per cent of Britain’s GDP on defence by 2030 when he hands down the Budget in October.
Having spectacularly resigned as defence secretary under Sir Keir Starmer over the former prime minister’s refusal to hit that goal, the Chancellor is facing claims he is now abandoning the armed forces.
US officials, particularly Trump and Defence Secretary Pete Hegseth, have exerted pressure on Britain and other Nato countries to lift spending as high as five per cent of GDP.
Trump has in past suggested the US would fail to honour its mutual defence commitments to nations the US believes are not adequately funding their military forces.
If the US makes clear it will revoke its support for British control of the Falklands unless Healey commits more funds to defence, the Chancellor could be faced into a number of uncomfortable decisions.
Persistent inflation, sluggish growth and a recent rise in the UK’s borrowing costs have eaten away at the fiscal headroom available to Healey.
According to the Financial Times the Chancellor could also face a further £4bn hit due to lower migration.
At the same time, questions remain over how Healey will fund several of Andy Burnham’s major policy pledges, including VAT cuts on energy bills and lower business rates for pubs and other venues.
The Prime Minister has repeatedly declined to rule out raising taxes in the upcoming budget – Healey has been coy on the prospect – a move which would likely lead to accusations the Government is suffocating the economy and households.
However, the alternative, significant cuts to welfare, the NHS or pension reforms, would likely meet fierce opposition from within Labour’s own ranks, effectively limiting the Chancellor’s options for meeting funding shortfalls.
While it is almost certain Healey will place more stock on delivering a Budget in line with the Government’s domestic priorities, Trump’s comments and Milei’s assertiveness could be about to make the Chancellor’s job a lot more difficult.
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