Image Source: The Telegraph.
Trump’s transactional approach, relying heavily on tariffs, has secured short-term wins – such as Mexico deploying 10,000 guardsmen, Panama withdrawing from the Belt and Road Initiative, Brazil’s announcement to shelve plans for the creation of a common currency with fellow BRICs+ members, and Colombia resuming migrant repatriation flights. However, his inflammatory remarks – like “We don’t need Latin America” during his second inauguration address and a pledge to reclaim the Panama Canal – threaten to erode decades of regional goodwill and cede influence to U.S. competitors at a time of global realignment.
Paradoxically, with Marco Rubio as Secretary of State, Michael Waltz as National Security Advisor, and Mauricio Claver-Carone as Special Envoy, Trump’s administration may be the most Latin America-focused in modern times. Rubio’s first overseas trip to Panama, El Salvador, Costa Rica, Guatemala, and the Dominican Republic underscored this emphasis. Can Trump engage constructively with Latin America, to the benefit of American voters and businesses, or is conflict inevitable?
Changes in U.S. Policy Toward Latin America Under the Trump Administration
The Trump administration’s early policy toward Latin America marks a clear departure from past U.S. involvement in the region, embracing a more transactional and frequently confrontational stance. Key executive actions, such as freezing foreign aid to important regional allies, undermining the UMSCA, redesignating Cuba as a state sponsor of terrorism, withdrawing from the Paris Agreement, and instructing the Department of Homeland Security to reassess Temporary Protected Status (TPS) designations, have underscored a shift away from the multilateral initiatives pursued by past administrations.
U.S.-Colombia relations stand out as a notable example of a partnership that has been particularly impacted by Trump’s return to office. Colombian President Gustavo Petro – who has consistently used anti-American and anti-Israeli rhetoric while relying on and benefiting from U.S. foreign aid, security assistance, and market access via its trade agreement with the US – was the Trump administration’s first target. Indeed, the U.S. threatened to impose tariffs and visa sanctions on Colombia after Petro initially refused to accept repatriation flights. However, Petro swiftly reversed his position, leading to a negotiated agreement. Still, the Trump administration’s executive order to reevaluate and realign U.S. foreign aid – including a 90-day freeze on most assistance – has led to the grounding of U.S.-origin 30 Black Hawk helicopters used by the Colombian National Police and Army, disrupting critical counternarcotics operations and efforts to combat organized armed groups. This development is particularly challenging for Colombia as it grapples with soaring cocaine production, a worsening humanitarian crisis in the region of Catatumbo, and violent clashes between the National Liberation Army (ELN) and the General Staff of Blocks and Fronts (EMBF), a dissident faction of the FARC-EP.
Beyond Colombia, key flashpoints include threats to the sovereignty of the Panama Canal – despite a conservative Panamanian government keen to work with the U.S. on migration – and threats of military intervention in Mexico to counter growing state capture by cartels. Additionally, tariff pressures on Mexico, the U.S.’s top trading partner and with which the U.S. ran a $172 billion trade deficit last year, have further strained regional relations and introduced high levels of uncertainty and concern among investors, which could worsen if Trump levies tariffs on Mexico in a more lasting fashion.
On the other hand, several Latin American leaders, such as Argentina’s Javier Milei, Ecuador’s Daniel Noboa, Paraguay’s Santiago Peña, and El Salvador’s Nayib Bukele – who share personal affinities with Trump – have high hopes for his presidency. However, it remains uncertain whether this will result in tangible policy victories for their countries. For example, the imposition of a 25 percent global tariff on aluminum and steel imports is expected to impact Argentina significantly. In 2024, Argentina exported $500 million in aluminum and $100 million in steel.
Is There a Long-Term U.S. Strategy in the Region?
For decades, the U.S. has lacked a coherent strategy toward Latin America, and the Trump administration’s vision remains unclear beyond curbing illegal migration and drug trafficking. A more strategic, mutually beneficial approach – centered on economic investment, security cooperation, and mutual respect – could enhance U.S. security and competitiveness while promoting regional stability. Strengthening local institutions and fostering growth would help address migration and trafficking at their roots while countering China’s influence. Notably, the administration has more high-level regional expertise than at any point in its modern history.
Encouraging U.S. private sector investment is also critical for both Latin America’s development and America’s long-term economic interests. Rubio and Claver-Carone were initial supporters of the Americas Act, a bipartisan bill that sought both to counter Chinese influence while rewarding and solidifying trade partnerships with countries in the region. The logic is that expanding and encouraging investment would create new opportunities in Latin America, offer an alternative to Chinese manufacturing, and complement U.S. reshoring efforts.
However, Trump’s protectionist rhetoric and early trade policies risk deterring U.S. businesses from looking southward at a time when companies are already reassessing their supply chains in response to tariffs and export controls targeting China. Indeed, although in his first presidency Trump renegotiated the USMCA, today the imposition of arbitrary trade tariffs not only erodes the USMCA but also threatens decades of effective economic and political regional integration. Moreover, it remains unclear what will be the fate of the Americas Act, which directs the U.S. Trade Representative (USTR) to negotiate with USMCA partners for the inclusion of Americas Partnership countries in an expanded USMCA+, and temporarily extend the Caribbean Basin Trade Preference Area to these countries until full USMCA membership can be achieved.
Claver-Carone has mentioned transforming the U.S. International Development Finance Corporation (DFC) into a private equity-style fund to attract private capital, particularly for energy and infrastructure projects in smaller countries in Latin America. His strategy emphasizes shifting away from debt-based financing to ensure the U.S. and its partners have a direct stake in investments that might attract increased U.S. private sector interest once they see that the government is taking a more vested stake in the region.
While the administration’s regional expertise is unquestionable, what strategy they may follow remains unclear. Moreover, besides the regional economic agenda other pressing questions arise: What is the administration’s strategy for dealing with the regimes in Cuba, Nicaragua, and Venezuela? Will the US look to build regional consensus against these regimes, reminiscent of its support for the Lima Group, or seek to deal with them unilaterally? During his first presidency, Trump launched an unsuccessful ‘maximum pressure’ campaign against Maduro’s regime. However, now his administration has not only reestablished communication channels with Maduro’s government but has also promised to send approximately 350,000 Venezuelans – many of whom fled political persecution and economic hardship – back to the regime they escaped from. The perils of continuing without a clear and consistent strategy risk the U.S. perpetually ceding economic and geopolitical influence in the region to its great power rivals.
Is Trump a Modern Day McKinley?
Trump’s vision for Latin America remains ambiguous – deprioritizing alliances and trade while framing himself as a modern-day McKinley, ready to use military and economic leverage to reassert U.S. dominance. Indeed, President William McKinley’s (1897-1901) economic strategy centered on high tariffs to protect American manufacturers and fund the government, although he later began advocating for freer trade to expand U.S. exports before his assassination in 1901. Trump has stated his admiration for McKinley calling him the “tariff king” and shared McKinley’s earlier vision for an American economy propped up by protectionism, but with a more nationalist focus on renegotiating trade deals and restricting immigration, particularly with Latin America. McKinley’s legacy in Latin America is one of expansionism, as he pushed the U.S. to intervene in Cuba, seize Puerto Rico, and purchase or otherwise acquire lands in Panama to construct a canal connecting the Atlantic to the Pacific.
While regional leaders remain interested in working with the U.S., Trump’s use of coercive foreign policy to address domestic priorities risks eroding confidence and narrowing the regional cooperation agenda. His withdrawal from the Paris Agreement for a second time has sent discouraging signals, especially on climate resilience and disaster aid. Questions also remain about continued funding for key initiatives like the Caribbean Basin Security Initiative and the Haiti stabilization mission – likely to be assessed through a “What’s in it for the U.S.?” lens.
Whether Trump is a modern-day McKinley or not, the reality is that the region’s economies and leaders’ political interests are dramatically different from those of McKinley’s time. Indeed, while Trump has threatened to take control of the Panama Canal and use military force in Mexico, late last year, Chinese President Xi Jinping, alongside Peruvian President Dina Boluarte, inaugurated the $3.6 billion Chancay megaport, of which Chinese state-owned enterprise Cosco Shipping contributed $1.2 billion for a 60 percent stake and promises to boost regional trade. Earlier this month, Cosco Shipping likewise opened a new shipping route directly to Colombia, which celebrated the development as “a great step in strengthening trade relations between Colombia and China.” The contrast between each rival power’s approach to the region could not be more striking.
Unless the administration delivers concrete economic benefits to willing partners and admirers like Argentina and El Salvador, U.S. influence in the region will remain fragile, likely ceding increasing space to China. Opportunities for security and economic benefits to the U.S. abound in Latin America. To capitalize on these, the administration should adopt a measured and strategic approach, leveraging the expertise of regional specialists like Rubio and Claver-Carone rather than resorting to public coercion of valuable partners.
Joseph Cain is a graduate of the Patterson School of Diplomacy and International Commerce. Formerly, he was a research intern at Global Americans.
Alejandro Trenchi is a Political Science PhD candidate at the University of Florida. Formerly, he was Director of Research and Programs at Global Americans.
