Diego Area, Global Americans President & CEO:
This is a new game. The Trump administration’s approach appears rooted in the belief that disruption can be a tool for transformation — a “pain up front” strategy. President Trump, known as a master dealmaker, is making a bold bet on the negotiating advantage he finds in chaos, having already used similar tariff declarations to extract concessions from the United States’ closest trading partners, including Canada and Mexico.
It appears that the next step in the U.S. tariff dance is how various countries respond — either by implementing retaliatory tariffs or sitting down to negotiate with the U.S. The move will raise questions about the reliability of U.S. free trade agreements and leave countries guessing whether the Trump administration intends to escalate further.
This uncertainty is particularly relevant for Latin American nations that have long-standing trade pacts with the U.S., including middle-income countries like the Dominican Republic, Panama, Chile, Costa Rica, Colombia, Peru, and El Salvador. While these countries may avoid the harshest tariffs aimed at global rivals like China or the European Union, they are not immune to disruption. Their deep trade ties with the U.S. mean that any shift in tone or policy can generate significant economic ripple effects — from investor hesitation to shifts in supply chains — especially in key sectors like agriculture, textiles, and services.
Amparo Mercader, Global Americans’ International Advisory Committee Vice-Chair:
This is the most significant shift in U.S. trade policy since World War II.
Yesterday’s announcements mark a decisive break from the liberal trade order that fueled decades of global economic growth. Washington — once the architect of globalization — now lacks a consensus on its value. Protectionism is rising, and trade is increasingly being weaponized.
Tariffs are no longer just about leveling the playing field — they’re about onshoring production and building domestic technological capacity, even at the cost of comparative advantage. It’s a steep price to protect those left behind by globalization and may signal a world shaped by national security concerns and technological rivalry.
Still, tariffs primarily target goods. Services, digital flows, and the movement of people remain less affected — for now.
For the Americas, the impact is mixed.
First, Latin America never fully integrated into global supply chains and wasn’t a major winner of globalization. It may also be less exposed to the risks of deglobalization. Mexico is the exception — its deep integration with the U.S. makes it highly vulnerable. Future negotiations will be complex, and the U.S. holds considerable leverage.
Second, China — not the U.S. — has become the primary trading partner for many Latin American economies, especially via commodity demand. The effects of U.S. trade shifts will be both direct and indirect.
Third, countries like Colombia and Chile, which benefit from free trade agreements, may now see their preferential edge eroded.
Finally, countries like Brazil — net importers of U.S. goods — still face penalties under the new reciprocal tariffs due to the introduction of minimum tariff thresholds.
Scott MacDonald, Senior Advisor and Senior Fellow at Global Americans:
While the highest tariffs were imposed on those countries with the largest trade surpluses with the U.S., namely China, the European Union, and Vietnam, most of the Caribbean was hit by the new 10 percent levee on all goods exported to the U.S., including the overseas territories of France, the Netherlands and the UK. The exception to this was Guyana, which has had a surplus in trade with the U.S. and was slapped with tariffs of 38 percent. Most of Central America was also hit with the 10 percent tariff, except Nicaragua, which was hit by an 18 percent hike.
While much of the Caribbean and Central America took the 10 percent tariffs in stride, the tariff action will only add to the economic challenges faced by these countries, many of which have become increasingly reliant on trade with the U.S. under either the Caribbean Basin Initiative or the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR).
Allison Fedirka, Senior Fellow at Global Americans:
Most South American countries fared well with the Trump tariffs, receiving the minimum 10 percent. These countries have diversified export markets with U.S. market share of export ranging from 4-20 percent. This means that the most vulnerable sectors will be those with low profit margins (like agriculture) and the overall impact will be felt more by specific sectors — like Paraguayan meat or Ecuadorian cacao beans and flowers.
The threat facing South America economies will be the knock-off effects on the global economy. Tariffs are expected to trigger economic slowdowns in various countries which will impact the purchases of other trade partners. Additionally, South American economies are highly exposed to commodity prices and the value of the USD, both of which are expected to see significant fluctuations.
For now, governments in the region have refrained from retaliatory measures. Instead, they are focused on ways to prop up the most affected sectors and focus on ways to make their economies more competitive.
Lastly, many believe the U.S. will use these tariffs as leverage in negotiations for resetting bilateral ties. In this sense South America countries are well positioned since they can offer various types of security cooperation valued by the U.S. Last week, President Noboa told President Trump of Quito’s interest in hosting a military base. Similarly, Secretary Rubio acknowledged Paraguay’s recent purchase of AN/TPS-78 radars from Northrop Grumman as a move that will radically transform Paraguay’s counter narcotics operations and security cooperation with the U.S.
