The Trump administration’s aggressive use of tariffs is reshaping economic ties between the U.S. and Latin America, reviving tactics reminiscent of past U.S. foreign policy in the region. W. Schreiner Parker, Managing Director for Latin America at Rystad Energy, compares the approach to “economic warships,” pressuring neighboring economies into compliance.
“Much like the Roosevelt Corollary’s gunboats, Trump’s tariffs function as economic warships, pressuring neighboring economies into compliance,” he said.
Colombia and Brazil have become key targets. In January 2025, Trump’s administration threatened a 25% tariff on all Colombian imports, escalating to 50% within a week, to force Colombia to accept deportees from the US. Under pressure, Colombia entered negotiations, temporarily halting the tariffs. Brazil, meanwhile, faces steep tariffs on steel imports, directly impacting one of its largest industries.
“The Brazilian government has vehemently opposed the measures, arguing that they unfairly single out its economy and may trigger countermeasures,” Parker noted.
Mexico, a longtime US trade partner, narrowly avoided a trade clash in January but remains at risk. A 25% tariff on Mexican exports, set to take effect on March 4, could cost Mexico over $29 billion, mainly in steel, aluminum, and autos.
“Such measures could push Mexico into a recession, shrinking the country’s gross domestic product (GDP) by 1.5% over five years while simultaneously driving up inflation,” Parker warned. Mexico could also challenge the tariffs as violations of the US-Mexico-Canada Agreement (USMCA), leading to legal disputes.
Panama, though not a direct tariff target, has drawn renewed US strategic interest. The Trump administration has focused on the Panama Canal’s role in global trade and concerns over foreign influence. “The administration has expressed growing concern over Hong Kong-based conglomerate CK Hutchison Holdings’ control of the Cristobal and Balboa ports,” Parker said. Efforts to curb Chinese influence align with Washington’s push to secure energy exports and maintain control over critical trade routes.
While Trump’s tariff-heavy strategy reinforces US economic influence, it may also strain long-term relations. “These economic measures may secure short-term gains while breeding long-term tensions,” Parker cautioned. The coming months will determine whether Trump’s approach strengthens US dominance or drives Latin America toward new alliances.
