A recent report revealed that the new administration of US President Donald Trump is generating significant pressure on trade, migration and social stability in the countries analyzed, including specific implications for Central America.
Analysts present their most recent analysis entitled Trump II: Impact and Reconfiguration of Relations with Latin America, which examines the consequences of the policies implemented by the administration of President Donald Trump in his second term and their impact on the region.
During the first days of the new administration, a more confrontational discourse has been used that could generate greater distancing from left-wing governments and closeness to governments more aligned with Trump’s vision.
Likewise, the new protectionist measures, the reconfiguration of trade agreements and the reduction in international cooperation generate significant pressure on Latin American economies, with direct effects on trade, migration and social stability, as revealed in the report.
Trade relations in Latin America are at risk due to the increase in tariffs in strategic sectors such as the automotive sector in Mexico and the agro-industrial sector in Brazil and Argentina. In addition, the possible revision of trade agreements such as the T-MEC and the DR-CAFTA would impact key exports in countries such as Peru, Panama and the Dominican Republic. The commercial dependence of economies such as Colombia and Chile makes them vulnerable and limits their negotiating capacity.
Regarding migration policy, mass deportations of undocumented migrants affect economic and social stability in countries such as Mexico, Colombia and the Dominican Republic and the reduction of remittances represents a direct threat to the economy of households in Peru, El Salvador and Guatemala.
International cooperation is also in limbo. The review and possible cut of funds from the United States Agency for International Development (USAID) is contemplated, which which would affect security, education and health programs in the region. The withdrawal of the US from environmental agreements such as the Paris Agreement weakens conservation efforts in the Amazon.
According to the report, countries such as Mexico and Brazil have opted for diplomacy and the strengthening of their trade strategies to minimize risks. In contrast, nations such as Colombia face tensions due to their political and commercial alignment with the US, contrary to what happens with Argentina.
A Look at Panama
The Panama Canal, which is a strategic axis for world trade and an economic and sovereignty pillar of the country, remains an important issue within the new agenda of the US president, which has caused tense situations between both countries. The strategic route of the canal, as well as the logistics industries around the route, can also be impacted by local or international decisions that may be taken in the coming months.
Panama and the United States have had a Trade Promotion Agreement (TPC) in force since 2012, and Panamanian productive sectors had already requested adjustments to the agreement due to unfavorable terms on key products such as rice and chicken. However, the new protectionist provisions of the Trump administration, which include base tariffs of between 10% and 20% for imported products, could seriously affect the country’s competitiveness.
Given this scenario, Panama has strengthened its diplomatic and commercial agenda, seeking to diversify markets and establish new strategic alliances that mitigate dependence on the United States.
Conclusion
The analysis concludes with the urgent need for market diversification and the strengthening of internal policies that mitigate economic dependence on the United States and highlights that the environmental agenda and multilateral agreements could become points of friction with the Trump administration.
Under this scenario and the reconfiguration of the United States’ relations with the region, China could increase its influence in the region as a strategic partner of Latin American economies.
