Trump's return to White House draws polarised Latin American response

Trump's return to White House draws polarised Latin American response
Central America is likely to face particular challenges, with expectations that programmes addressing structural causes of migration will be terminated. / bne IntelliNews
By Marco Cacciati January 22, 2025

Latin America has split over Donald Trump's White House return, with a handful of leaders rushing to embrace the new president while others eye his protectionist agenda with alarm.

The January 20 inauguration ceremony highlighted these divisions: right-wing leaders such as Argentina's Javier Milei, El Salvador's Nayib Bukele, and Ecuador's Daniel Noboa were among the select few regional heads of state to receive personal invitations.

Glossing over Trump’s warm ties with former far-right Brazilian president Jair Bolsonaro, who was barred from attending the swearing-in ceremony by the Supreme Court, President Luiz Inácio Lula da Silva struck a diplomatic tone, citing "historical friendship" and cooperation in trade, science, education and culture, despite clear policy differences.

Honduras's Xiomara Castro focused her congratulations on migration dialogue, a crucial issue given Honduras's significant proportion of US asylum seekers.

However, some leaders have taken more confrontational stances. Panama's President Jose Raul Mulino notably declined to offer congratulations, instead issuing a firm rejection of Trump's inflammatory statements regarding the Panama Canal. "The canal is and will remain Panama's," Mulino said, rebuffing Trump’s territorial claims and accusations of Chinese interference in the waterway’s operation.

Meanwhile, Colombia's leftist President Gustavo Petro eschewed diplomatic niceties entirely, sharing pointed criticism on social media referring to Elon Musk’s controversial Nazi salute.

As widely expected, immigration stands as a central flashpoint, with the administration pledging unprecedented deportations and potential closures of key programmes including Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS). Legal migration routes, including Safe Mobility Offices in Colombia, Costa Rica, Ecuador and Guatemala, may also face closure.

The new administration's protectionist economic agenda, centred on tariff increases, threatens to disrupt regional trade. While aimed mostly at China, these measures – which analysts view primarily as a means of obtaining concessions from trade partners – could significantly impact Latin American economies, with Mexico's and Argentina's agricultural sectors particularly vulnerable.

The policy towards Venezuela remains uncertain, despite the nomination of Marco Rubio, a vocal critic of President Nicolás Maduro, as Secretary of State. Whilst Rubio has accused Venezuela of being "controlled by a criminal and drug-trafficking organisation", pragmatic considerations - including US oil interests and migration management - may necessitate some level of engagement and lead to a transactional approach with Maduro, whose authority is disputed in the wake of the controversial July 28 election.

Yet during his inauguration speech Trump indicated that the US could completely halt oil purchases from Venezuela as part of efforts to weaken the Caracas regime, declaring, “We don’t need it.”

His comments pointed towards the possibility of a renewed embargo, mirroring actions from his previous term, characterised by a “maximum pressure” policy that, however, failed to unseat Maduro.

For Argentina, the warm personal rapport between the newly inaugurated US president and "anarcho-libertarian" President Milei could prove crucial as Buenos Aires seeks support in negotiations with the IMF over a vital $44bn loan agreement. Still, this relationship may face strains if Trump's promised tariffs begin to affect Argentina's agricultural exports, and a strengthening dollar may derail Milei’s dollarisation plans.

Central America is likely to face particular challenges, with expectations that programmes addressing structural causes of migration will be terminated. Relations with Cuba are also expected to deteriorate, reversing the modest opening seen in the last days of Joe Biden's presidency, which had included removing the communist-ruled island from the US list of state sponsors of terrorism. Trump placed Cuba back on the terror list just a few hours after taking office.

Mexico, as the US's largest trading partner, finds itself particularly exposed to the "America First" policies, with Trump determined to slash the $152.4bn trade deficit with the Central American country and revive domestic manufacturing. For now, President Claudia Sheinbaum has maintained a conciliatory approach, offering cooperation and unveiling new measures targeting Chinese imports in a bid to appease the new administration.

But that did not deter Trump from announcing 25 per cent tariffs on Mexico and Canada from February 1, citing concerns over immigration and fentanyl flows into the US, while also taking steps to rename the Gulf of Mexico into “Gulf of America.”

In a cool-headed response, Sheinbaum said "For us, it is still the Gulf of Mexico, as it is for the rest of the world.” She has previously hinted at the possibility of imposing retaliatory measures against Washington, however this may prove difficult given that Mexico exports 80% of its goods to the US.

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