Trump opened the door on the Falklands. But how far will he let Milei go?

FALKLAND ISLANDS

Javier Milei is turning Argentina’s historic claim into economic and military pressure, but Donald Trump is unlikely to sacrifice the special relationship over the Falklands.

FOR more than four decades, Argentina’s claim to the Falkland Islands has been an article of national faith, periodically invoked by presidents seeking to rally voters around the flag.

But Javier Milei is beginning to do something different.

Emboldened by Donald Trump’s suggestion that Washington is reviewing its position on the islands, the Argentine president is turning rhetoric into economic pressure, threatening companies involved in Falklands oil exploration and rebuilding his country’s ability to project power into the South Atlantic.

At the centre of the escalating dispute is Sea Lion, the giant oilfield north of the islands being developed by UK-based Rockhopper Exploration and Israel-linked Navitas Petroleum.

Milei has declared the project a threat to Argentine sovereignty and announced measures designed to force companies to choose between exploiting Falklands resources and accessing the increasingly lucrative Argentine economy.

For Azul Hidalgo Sola, Sibylline’s North America analyst, the change is significant.

“Previous presidencies were more of a patriotic rally-around-the-flag statement to get people mad and nationalistic,” she says.

“This, to me, is different.”

Milei announced last week that companies involved directly or indirectly in unauthorised Falklands projects could be prevented from operating in Argentina.

Crucially, access to RIGI, Milei’s flagship investment regime offering tax and regulatory incentives for major foreign investors, will require declarations concerning involvement in unauthorised activity around the islands.

The message is straightforward: companies wanting access to Argentina’s vast oil, gas and mineral resources may have to choose.

“Any firm that doesn’t align themselves with us is no longer welcome to exploit the riches of our nation,” Hidalgo Sola says.

Milei has also ordered additional funding for an integrated naval base at Ushuaia, created a National Security Council and promised tougher penalties against companies involved in Falklands resource extraction.

The Argentine president says a country must be “politically relevant, economically influential and militarily respectable” if it is to recover the islands.

It is a marked departure from the approach adopted by many governments since Argentina’s military dictatorship invaded the Falklands in 1982, triggering a 74-day war which left 255 British servicemen and 649 Argentines dead.

Yet the catalyst for Milei’s latest offensive may lie thousands of miles north.

Asked about the islands last month, Trump told reporters: “I always review every position. That’s just one of many.”

He offered no support for Argentine sovereignty. But Milei seized upon the comment, declaring that “winds of change” were blowing in Argentina’s favour.

Hidalgo Sola believes Trump’s intervention opened a door, though she suspects conversations may have preceded the public remarks.

“There had been backchannel conversations about this previously, and now it’s coming to a forefront,” she says.

There is another, more unexpected dimension.

Navitas Petroleum, the operator and 65% owner of Sea Lion, is Israeli-linked, while Milei is one of Israel’s closest international allies.

A Republican source says some influential pro-Israel Republicans have become increasingly hostile towards Britain following the deterioration in relations between London and Jerusalem and believes this could be feeding into the Falklands debate.

“There are some deals going on between the Israelis and the Argentinians over these oilfields,” the source says.

“My concern is that those with strong Israel connections are going to get to the president.”

The source believes Trump’s ideological affinity with Milei, coupled with anger towards the Labour government, could make Washington more receptive to Buenos Aires than previous US administrations.

Hidalgo Sola is more cautious, though she acknowledges Israel is part of the equation.

“This whole decree came about because of the Sea Lion project,” she says.

“There are definitely conversations happening with Israel. Milei is an incredible ally for Israel.”

But there are limits to how far Trump is likely to travel.

The United States has its own growing strategic interest in the South Atlantic, as Washington seeks to counter Chinese influence and secure strategic maritime routes and access to Antarctica.

An economically resurgent, pro-American Argentina therefore has obvious appeal.

Milei is simultaneously seeking to rebuild armed forces neglected since the restoration of democracy in 1983.

Argentina is already exploring the acquisition of amphibious assault ships and tank landing ships capable of transporting troops and equipment ashore as part of a wider naval modernisation programme.

Hidalgo Sola believes that military revival forms part of a much broader attempt to restore Argentina’s regional importance rather than preparations for another Falklands invasion.

“They want Argentina to go back to the grandeur of many, many decades ago,” she says.

That includes exploiting Argentina’s enormous energy and mineral wealth and becoming less dependent on imports while rebuilding military capabilities.

But Hidalgo Sola does not believe Milei is preparing for another invasion.

“I don’t see a military event happening in the next couple of years,” she says.

Instead, greater military capability could become another bargaining chip.

“Any kind of Argentine military buildup is going to be leverage for concessions,” she adds.

And therein lies Milei’s problem.

Trump may admire the libertarian president, resent Britain’s Labour government and see Argentina as an increasingly useful strategic partner. But governments change.

For Washington, Britain remains a nuclear-armed NATO ally with an intelligence and military relationship spanning generations.

“I think the UK continues to be the more reliable partner,” Hidalgo Sola says.

“Milei might be out next year. You don’t know what this experiment is going to turn into in Argentina.”

Trump has therefore given Milei something previous Argentine presidents lacked: the possibility that Washington’s traditional position is no longer immutable.

But that is very different from backing Argentine sovereignty, and further still from supporting any attempt to impose it.

For now, Milei’s economic threats, military investment and diplomatic offensive may increase the pressure on London without fundamentally altering the balance of power.

“The US is not coming to Argentina’s aid when it comes to this issue,” Hidalgo Sola says.

“I think the rhetoric might be there. But Trump is not willing to further exacerbate already sore transatlantic relations with the UK.”