By Kuldeep Ojha
Donald Trump’s re-election in 2024 marks the beginning of a potentially transformative era for U.S.-Latin America relations. Trump promises to promote his ‘America First’ policy, based on a combination of neo-conservative thought, and the Monroe Doctrine's principles of “American dominance” in the Americas, given that Republicans dominate the Senate and House. If the first Trump presidency and his campaign rhetoric are any indication of things to come, his policy approach on trade, border security, immigration, and energy transition are likely to shape Latin America’s own policy choices. President Trump’s affinity with right-wing nationalist leaders in the region might also play a role in shaping bilateral ties. However, Trump’s transactional and personalistic approach would translate into uncertainty and even policy reversals. Within this scenario of an ‘America First’ presidency that will withdraw from the leadership role, Latin American countries are likely to resort to bilateral diplomacy to wrest concession and avoid conflagrations.
The Protectionist Disruption
Trump’s transactional approach to foreign policy, evident during his first term, treats international relations as a series of deals prioritizing the US economic interests. By withdrawing from the Trans-Pacific Partnership (TPP) and renegotiating the North Atlantic Free Trade Agreement (NAFTA) into the US-Mexico-Canada Agreement (USMCA), Trump clarified that multilateral arrangements would take a back seat to bilateral deals designed to boost the US influence. Since most Latin American countries rely significantly on commercial activity with the United States, this position could pose serious difficulties.
For example, Trump's proposed 10% import tariff could severely impact Latin American economies, which are heavily dependent on exports to the U.S. market. While Mexico is particularly prone to tariff-induced disruption, Brazil and Argentina’s already troubled economies may face a double whammy. On one hand, Trump’s proposed tariffs would negate their excess to the lucrative US market. At the same time, sapping demand from China might deprive them of an alternative destination. In kind, the protectionism used by Trump may have reciprocal measures such as tariffs and devaluations of currencies. This may lead to the collapse of mutually trading system with smaller countries, that will ensure the weaker economies become volatile and unstable. Concretely, Trump’s policies may affect Latin American Agrarian and Industrial products that define the continent’s export baskets. Especially Brazilian soybeans and Argentine beef are imported to a large extent into the United States and would particularly be harmed by a high tax on agriculture imports. Moreover, it seems that Trump’s bolder ways of achieving the economy through reduction of corporate taxes and increased spending in the US may lead to the larger fiscal deficit and cause inflation to increase the unadjusted interest rates. This may, in turn, lead to the Latin American currencies decline by even a larger extent; thus, negatively affecting the region’s economy growth rate.
According to the Pew Research, Latin American gross domestic product may have difficulty breaking the 3% growth mark in the following years. The unpredictable and skeptic decision making, that defines Trump policies around the region, could prompt regional leaders to continue applying a persuasive leadership principle to secure political favor or trade export permits for certain key sectors. However, in the long-run, the most potent way of countering protectionism and policy risks that are evident in the American inward turning strategy, is to build relationships with Asian, European and African markets. After Trump withdrew from the TPP, the redesigning of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP), negotiated by Japan, shows the potential of such an approach.
Crackdown on Illegal Immigration
Trump 1.0 took a zero-tolerance stance on non-traditional security issues emanating from Latin America, including drug trafficking, gang violence, and illegal immigration. It is reasonable to expect a continuation of the hard-line approach in his second term, including stricter border control and potential military action against the Mexican drug cartels. More recently, Trump’s Vice President-elect J.D. Vance has sought consent to let the US president launch strikes against cartel compounds in Mexico. This could distort the relationship between Mexico and the US.
The effects of these policies would be felt most acutely in countries like Mexico, El Salvador, Guatemala, and Honduras, where poverty and violence drive thousands to seek refuge in the US. Trump’s strict immigration stance has translated into policies of family separations and deportations, with significant impacts on the economies of Central American countries. However, illegal immigration was a hot political issue in the recent presidential campaign, in which the Republican candidate associated the issue with its impact on economy and ethno- cultural identity. In this case, Trump’s immigration policies will be harmful to immigrants and Latin American economy particularly because of issues of deportation and construction of Camps. For example, nearly 5 million Mexicans and 2 million Central Americans reside illegally in the United States. Remittances sent by migrants from the US, contribute substantially to these economies, particularly in Guatemala and Honduras. If deportations go through and the erstwhile illegal residents are forced to return to their home countries, it will add to the pressure on the Latin American governments to generate suitable opportunities for the influx of returnee population. The failure to meet the economic aspirations of deported people would cause social and political discontent. Therefore, massive deportations or restrictions in remittances may further destabilize these economies. This situation may lead Latin American countries to increased unemployment, poverty, and, in essence, pressures towards more human movements.
The Green Transition Setback
Trump's re-election also means that he shall continue to have the same policy on climate that he has laid in his first presidency, which is pro-fossil fuels. He has continuously supported such measures to bring back coal and oil industries. This could help oil rich countries in Latin America such as Guyana, Suriname, and Trinidad and Tobago get more US investments in fossil fuel. Nevertheless, for the countries such as Brazil and Colombia, the members of the rainforest, Trump’s attitude towards climate action might be costly.
For instance, Brazil, which will be hosting the COP 30 climate conference in 2025, has cited the Lula presidency to its readiness to gain a place among world powers in the preservation of the environment. Nevertheless, Trump’s support of fossil energy and his previous exit from the Partnership with Paris Agreement may alienate the better cooperation with Brazil regarding climatic conservation programs. Additionally, Trump’s policies could strain biodiversity in Latin America’s tropical rainforests, crucial for absorbing global carbon emissions. Trump’s disregard for climate action may not sit well with the environmentally conscious Latin American leaders like Lula. The green transition sceptics constituency that Trump represents would cause harm to the American reputation for leadership on climate change in the eyes of Latin America.
Trump’s disregard for green energy transition may also dash hopes for a Marshall Plan-like endeavour on the part of the US to enable technology transfer to the Global South. Ironically enough, the void created by the US in this domain shall allow China to step in with its ‘green transition diplomacy’. Since clean energy is increasingly going to dominate economic activity, China’s aid and technology transfer to enable this economic transformation in Latin America will provide it with economic gains in terms of market access and diplomatic support in terms of favourable bilateral relationship China’s green energy leadership in the US backyard then will amount to a strategic setback for the US. While Latin American countries may partially hitch their wagon to Chinese tech and services, they would do well to find alternatives to reduce the risks of excessive dependency. Such a diversification bid may also involve cooperating with the US by engaging with the private sector, civil society experts, and provincial governors more attuned to the climate risk.
Diplomatic Shifts and Future Relations
Trump’s re-election has galvanized right-wing leaders across Latin America, including Argentina’s Javier Milei and El Salvador’s Nayib Bukele, who share with Trump an affinity for “tough” policies and nationalist rhetoric. Central American countries such as Costa Rica, the Dominican Republic, and Panama, as well as South American countries such as Paraguay, Chile, and Uruguay, that are in synergy with the US economic and security agenda are likely to benefit from this Trump regime. Trump support for conservative right- wing governments in these countries could foster enhanced economic and security cooperation mainly in the fight against drug cartels, and management of economic risks.
However, Trump’s re-election could create diplomatic hurdles for left-leaning governments, such as those in Mexico, Chile, and Brazil, which will find it hard to deal with his militaristic, unilateralist approach to foreign policy with a disregard for diplomatic norms. He proposed an aggressive approach to so-called anti-American states, including Cuba, Venezuela, and Nicaragua, which he calls, the “Troika of Tyranny”. His aggressive policy could only deepen the measures to impose more sanctions and a more profound isolation of these countries. For instance, Nicolás Maduro of Venezuela could get even heavier sanctions that will imply limitation or even total banning of the export of petroleum, which is the main exportable commodity of Venezuela, and could exacerbate a present scarcity of foodstuffs and drugs.
Furthermore, Trump's focus on alleviating China's clout in Latin America adds another dimension of geopolitical rivalry. Under The America Crece initiative, the US seeks to promote private investments in Latin American infrastructure sector. If done rightly, this initiative could counter China's Belt and Road Initiative (BRI) and help revitalize the Latin American economy. However, during the COVID-19 pandemic, China’s ‘mask diplomacy’ helped it gain a foothold in Latin American markets, where public sentiment towards China has become increasingly favourable. Pew Research Centre further reveals that most of the Latin Americans view China as an economic- ally and, at some point, even as a geopolitical ally.
Conclusion
Trump’s second term is set to redefine the US-Latin American relations through a transactional lens, where bilateral treaties, strict immigration reforms, and strategic anti-China measures take precedence. For Latin America, where the pace of growth is still low, estimated at 1.8%, Trump can increase existing economic and social problems, and some can turn to other partners and cooperate with China or Russia.
While Latin America struggles with how to cope with the aftermath of the downturns, its leaders will have no choice but to be business-like in relation to Trump while relying on diplomacy to obtain the best possible conditions for their countries. Trump’s neo-conservative policy and, in addition, the absolute adherence to an ‘America First’ doctrine may catalyze a new phase of Latin American diplomacy in front of a binary choice: cooperation or divergence. Sustainable foundations for this new bilateral the US-Latin America relationship will be predicated on how the two regions will maneuver around the swirl of economic relations, security, and environmental concerns caused by evolving power realignments
This Article is an Original Contribution to the SIS Blog
Kuldeep Ojha is a PhD scholar in Latin American Studies at SIS, JNU. His research focuses
on environmental governance in Central America, and his interests extend to the Latin
American region and its geopolitics.