What could Donald Trump's return mean for Latin America?
Jan 14, 2025
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The podcast dives into the potential repercussions of Donald Trump's return to the White House for Latin America. It highlights his alarming trade tariff threats against Mexico and possible repercussions for immigration policies. Discussions include how Mexico might retaliate and the strained relations with Brazil, particularly under Lula's presidency. The impact of Trump on U.S.-Latin American trade dynamics and the geopolitical implications for countries like Argentina are also explored, sparking a conversation about the future of these critical ties.
Trump's proposed tariffs on Mexico could disrupt $800 billion in annual trade, creating economic uncertainty on both sides of the border.
Strained US-Brazil relations may arise due to differing political ideologies, complicating environmental discussions and diplomatic negotiations in the region.
Deep dives
Impact of Trump's Tariff Policies on Mexico
Donald Trump's proposed tariffs on Mexican imports, set to reach up to 25%, could significantly disrupt US-Mexico trade relations. Mexico has become the US's largest trading partner, with bilateral trade totaling $800 billion annually, making any tariff implementation potentially devastating for both economies. Mexican business leaders, such as Jose Mario Sanchez, express concerns over the political nature of these tariffs, noting that they could lead to retaliatory measures harming industries on both sides. The uncertainty surrounding these tariffs has resulted in a halt in business operations, with companies waiting to see how the political landscape will unfold.
Challenges for Brazil Under Trump's Presidency
Brazil's relationship with the United States may become strained under Trump's administration due to the differing political ideologies of the two leaders. With Trump's ally, former Brazilian President Bolsonaro no longer in power, the current leader, Luiz Inácio Lula da Silva, presents a stark contrast that could lead to tensions. Moreover, issues like the environmental policies, especially in light of Brazil hosting the COP30 climate summit, may further complicate relations. As China’s influence in the region grows, the United States may find itself with less leverage in negotiations with Latin American countries, including Brazil.
Opportunities and Risks in US-Latin American Relations
Despite Trump's controversial remarks about Latin America, the potential for a shift in US-Latin American relations exists, particularly with the appointment of Marco Rubio as Secretary of State. His familiarity with the region and command of Spanish symbolizes an opportunity for enhanced diplomatic engagement. Many experts believe that this could lead to increased investment and trade that have historically been lacking. However, the path forward is riddled with risks, as Trump's aggressive stance on issues like migration and tariffs may threaten the fragile partnerships that are crucial for regional stability.
Even before taking office, President-elect Donald Trump has threatened to impose huge trade tariffs on Mexico, deport millions of undocumented Latino migrants out of the United States and crack down on the flow of drugs like fentanyl from Latin America into the US. And he's threatened to take control of the Panama Canal and re-name the Gulf of Mexico as the “Gulf of America”.
He has criticised the BRICS group of developing nations – which includes Brazil – for floating the idea of a new currency to challenge the dominance of the US dollar in international trade. And he has praised Argentina’s maverick right-wing president Javier Milei for cutting state expenditure.
So what will Trump’s second presidency mean for Latin America – a region that used to be known as “America’s back yard”?
If you would like to get in touch with the show, please email: businessdaily@bbc.co.uk
Presented and produced by Gideon Long
Additional reporting by Vianey Alderete in Ciudad Juarez, Mexico
(Picture: The border wall on the US-Mexico border, as seen from Ciudad Juarez, Mexico October 23, 2024. Credit: Reuters)
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