US President Donald Trump hit the ground – and Latin America – running when he took office on January 20. Developments through the first weeks of his administration revealed the power that US holds, and its limitations, in the region.
The first encounter was with Colombia. President Gustavo Petro refused to accept flights from the US bringing back illegal Colombian immigrants, who, Petro claimed, were being treated like criminals. He relented after Trump threatened to impose tariffs and sanctions but sent Colombian Air Force planes to being his citizens back.
Formerly the closest ally of the US in LAC, Colombia veered away after electing Petro, its first left-wing president in decades, in 2022. Colombia received billions in US military and civilian aid over the past two decades under Plan Colombia, a US project to eliminate drug trafficking. It became a NATO “global partner” in 2017 and hosts seven US military bases (two naval, three air force, two army), joint operations, training exercises and infrastructure investments. US influence over the country’s energy and mineral resources persists. Colombia also has a free trade agreement, over $50 billion in bilateral trade, and a diaspora of over 1.6 million in the US.
Next came Mexico. Trump decreed 25% tariffs on all Mexican imports from February 4, only to put this step on hold for a month after talks with President Claudia Sheinbaum and her team. The latter committed to posting 10,000 border security personnel to control illegal immigration and drugs, while the US agreed to take steps to control the smuggling of weapons to Mexico.
President Sheinbaum, who took over a few months ago, outlined ‘Plan Mexico’ just before Trump’s inauguration, a gesture of cooperation as an ally in the North American trading bloc with shared strategic interests. There was also a concerted move to reduce dependence on, and presence of, China in the Mexican economy.
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Economy secretary Marcelo Ebrard declared that Mexico would align itself ‘100% with the United States as regards China and its presence in Mexico.’ Mexico launched raids on ‘illegal’ Chinese markets and is trying to replace Chinese imports with substitutes from within the North American trading bloc, starting with 35% tariffs on the textile sector, hitting mainly Chinese imports. It also aims to lift foreign direct investment (FDI), through tax and fiscal incentives, from $39 billion in 2024 to $100 billion by 2030.
Mexico was the United States’ top goods trading partner in 2023 with total trade at $807 billion and a surplus of $130 billion for Mexico, while trade with China was $123 billion, heavily weighted in favour of the latter. US goods trade hovered around $782 billion with Canada and $576 billion with China. Similar figures are expected for 2024.
However Mexico faces several challenges. Among them is an ambitious reform program, rolled out under the previous president, which envisages sweeping changes in judicial appointments. At the same time, threats to state authority by entrenched drug cartels and waves of immigrants heading to the US will continue to influence its relationship with its northern neighbour.
Secretary of State Marco Rubio set off on his first foreign trip early February to Panama, El Salvador, Guatemala, Costa Rica and the Dominican Republic. Backed by Trump’s threat to “take over the Panama Canal”, which Panama publicly rebuffed, he warned President Jose Raul Mulino that Washington will “take necessary measures” if Panama does not immediately take steps to end China’s influence and control over the canal.
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Soon after, Panama gave China notice withdrawing from the Belt and Road Initiative which dates back to a 2017 memorandum of understanding with China (when it shifted recognition from Taiwan). Hong Kong based C.K. Hutchison Holdings – owned by the Hong Kong billionaire Li Ka-shing – has operated two of the canal’s five ports along the 51-mile canal route since 1997.
After Rubio left, the state department announced that US government ships would transit the canal free of cost. Mulino claimed this was “simply and plainly intolerable,” and denounced “bilateral relations based on lies and falsehoods.” Nevertheless, Mulino agreed that Panama could be a transit post for expelled illegal migrants from the US.
Several US military planes shipped hundreds of illegal migrants from India, China, Uzbekistan, Pakistan and Afghanistan to Panama, which has the unenviable task of repatriating them.
El Salvador President Nayib Bukele impressed Rubio with an offer to take in all convicted prisoners that the US wanted to send to CECOT (Terrorism Confinement Centre), irrespective of their nationality, for a fee that would be convenient for the US government. CECOT already houses thousands of gang members, who some claim are innocent citizens. El Salvador has the highest per capita incarceration rate on the planet, with 1,659 prisoners per 100,000 of population currently.
Trump is also expected to double down upon other regimes like Ecuador, where the US closed its naval base in 2009. In a widely reviled decision initiated in 2023 by former right-wing President Guillermo Lasso (who was forced to demit office), and ratified by his interim successor Daniel Noboa in 2024, US ships, military personnel, armament, equipment and submarines were installed in the sensitive Galapagos archipelago, a World Natural Heritage Site about 1000 kilometres off Ecuador’s coast.
The agreement grants US soldiers and their contractors several privileges, exemptions and immunity in Ecuadorian territory, similar to members of diplomatic missions, without paying the administrative taxes that other entities have to pay. Ostensibly, the presence of US troops seeks to counter drug trafficking by transnational cartels, which have caused a serious security crisis.
Peru’s embattled right-wing President, Dina Boluarte, accused of illegally deposing the former left-wing President Pedro Castillo, in May 2023 approved deployment of US troops to train the Peruvian military and national police.
Further south, Argentina, whose President Javier Milei has lost no opportunity to proclaim his affinity with Trump, declared in January that it would exit the World Health Organisation, following Trump’s lead.
In the Caribbean, US activism may increase in Haiti, where gangs threaten the existence of the state itself. Guyana has ceded offshore areas to US companies drilling its massive reserves. Rubio has repeatedly called Cuba, Nicaragua and Venezuela as the evil triangle. It is highly likely that the US will begin mounting pressure on these countries in the near future.
While other countries dominate reactions to US foreign policy under President Trump, Latin America and the Caribbean are crucial because of geography, linkages to the US political, military and economic establishments. They have also been a cause of alarm to the US due to the rise of the democratic left in the region, which is taking an increasingly independent stand on issues such as migration, narcotics, etc.
The autocratic left in Cuba, Nicaragua and Venezuela overtly challenges the US and maintains close ties with Russia. China’s ubiquitous and growing economic presence all over the region has recently assumed strategic overtones, according to the US establishment.
The Trump administration will be attempting to bring uncooperative regimes to heel, while forcing more pliant and vulnerable ones to cooperate, primarily using levers of trade and perhaps other means as well.
Deepak Bhojwani is a retired diplomat and former Consul General of India in Sao Paulo, Brazil.
