President Trump’s Latin America Policy: Short-Term Gains, Long-Term Risks

Commentary by Christopher Hernandez-Roy, Juliana Rubio, Jessie Hu, and Sam Smith

Published October 6, 2025

This commentary is part of a report from the CSIS Geopolitics and Foreign Policy Department entitled Navigating Disruption: Ally and Partner Responses to U.S. Foreign Policy.

Introduction

One lament often heard from Latin America and the Caribbean (LAC) since the turn of the twenty-first century is that the United States has paid insufficient attention to the region. LAC has been left wanting for trade and support for development-and in some cases, support for democracy. For example, the idea of creating a continent-wide free trade area to increase prosperity, launched at the First Summit of the Americas, quietly died as the deadline for concluding negotiations passed in 2005. President Obama, at the Fifth Summit of the Americas in 2009, acknowledged that promises of partnership with Latin America had gone unfulfilled in the past and vowed to do something about it. Aside from a recalibrated approach toward Cuba, however, not much has changed as of 2025. President Trump's first administration launched the América Crece initiative, of which, as of this writing, officials in the region have only a vague memory; meanwhile, President Biden's Americas Partnership for Economic Prosperity was labeled as intentionally unambitious and vague.

Under President Trump's second term, the United States has given the Western Hemisphere more attention in nine months than many past administrations of either party have since the Cold War-though in the region, some now regret getting what they wished for.

Under President Trump's second term, the United States has given the Western Hemisphere more attention in nine months than many past administrations of either party have since the Cold War-though in the region, some now regret getting what they wished for. This change in approach springs from a concern that the United States has prioritized power projection and policing global hotspots over attending to its "shared neighborhood" for too long, thereby allowing China to expand its influence in LAC and allowing criminal organizations and record migration flows to directly threaten U.S. security. In response to these challenges, and to a perceived need to right trade imbalances in parts of the region, the current administration seems to be adopting a "Monroe Doctrine 2.0" approach to the Western Hemisphere: decimating soft-power initiatives in favor of deploying (or threatening to deploy) military force, while also relying on economic coercion and trade pressure. This is in line with an "America First" approach guided by narrower country-specific interests, rather than by the "enlightened" self-interest of past U.S. foreign policy.

The Trump Administration's Policies

Soft Power

Foreign assistance and soft-power programs are important tools for engaging with the LAC region. They foster a sense of goodwill and cooperation while strengthening the United States' influence and reputation. At the same time, these programs have been criticized for fostering dependency and failing to enable countries to achieve self-sufficiency; combined with the view that they were incompatible with an America First foreign policy, this led the Trump administration to attempt to end or significantly reduce them. While official reactions to the closures have been mixed, this decision has had an outsized impact to parts of LAC-especially Central America, Colombia, and Haiti.

International development initiatives like the U.S. Agency for International Development (USAID) strengthened democracy and the rule of law, reduced poverty and corruption, fortified civil society, supported the development of more professional police forces, and contributed to the fight against drug trafficking. Most USAID programs have now closed, allowing competitors, including China, to potentially step into poverty reduction or development projects-though not likely democracy or human rights projects-thereby gaining greater leverage in the region. Much of U.S. aid to LAC was meant to support refugees and migrants. Now, projects that provided food, shelter, water, and health care are also shutting down. For communities living in poverty and experiencing displacement, this means more hunger, more untreated illness, and greater desperation-right when large numbers of deportees are being sent back to Latin America under President Trump's aggressive migration enforcement efforts. The ripple effects of the United States' wholesale deprioritization of soft power are being felt throughout the region.

Hard Power

Since coming into office, the Trump administration has demonstrated a willingness to respond to public safety issues-particularly drug control-with military assets. President Trump has also threatened the use of military force to achieve political objectives, such as to "take back" the Panama Canal or to acquire Greenland.

The Trump administration has demonstrated a willingness to respond to public safety issues-particularly drug control-with military assets.

The return of hard power in the Western Hemisphere is most evident in the militarization of the "war on drugs," where the administration has increasingly relied on the U.S. military to curb the flow of illegal drugs. On January 20, 2025, President Trump issued Executive Order 14157, designating cartels and other organizations as Foreign Terrorist Organizations (FTOs). This shift broadens the range of countermeasures available for the United States to target these groups. Shortly thereafter, the Department of Defense sent 1,500 active-duty service members and additional air and intelligence assets to the southern U.S. border.

The FTO designation marked a first step toward legitimizing the use of unilateral military responses to perceived drug threats. On August 8, 2025, the New York Timesreported that President Trump had secretly signed a directive to the Department of Defense to begin using military force against Latin American drug cartels, indicating that attack plans would be ready by mid-September. This was followed by the deployment of three Aegis-guided missile destroyers, along with the Iwo Jima Amphibious Ready Group and the 22nd Marine Expeditionary Unit (which includes more than 4,500 sailors and Marines), to waters off Venezuela. On September 2, U.S. forces carried out a strike against a Venezuelan boat allegedly carrying drugs and killed 11 "terrorists" on board. The next day, the administration declared the start of a new campaign against Venezuelan cartels. This gunboat diplomacy is clearly aimed at pressuring the Maduro regime and sending a message to other Latin American governments, including Mexico, to intensify efforts against cartels and curb illicit drug flows to the United States.

Economic Coercion

The Western Hemisphere has been a test case for President Trump's use of import tariffs to achieve non-trade foreign policy objectives through economic coercion. He used the International Emergency Economic Powers Act to impose a 25 percent tariff on Mexico and Canada (as well as China), with the justification that drug and migrant flows from those countries represented a national emergency for the United States. He briefly imposed a 25 percent tariff on Colombia when the country attempted to block the return of its citizens deported from the United States. His 50 percent tariff on Brazil is an intrusion on the country's judicial system, aimed at pressuring the government to drop charges against former President Jair Bolsonaro, who was accused and subsequently convicted of staging a coup after losing the 2022 election. It is also an effort to challenge Brazil's judicial rulings on freedom of speech issues. While president-elect, Trump also threatened Canada with "economic force" as a means to make it the 51st U.S. state.

President Trump's separate sectoral tariffs on steel, aluminum, and copper have hit the Western Hemisphere particularly severely. Canada, Brazil, and Mexico are the United States' top sources of steel imports. Canada is its single-largest source of aluminum, while Chile, Canada, Mexico, and Peru account for 97 percent of imported copper. While these tariffs are likely related to the president's laudable expressed goal of increasing production of these metals at home, there is no doubt that in negotiations with Canada and Mexico they are also used as pressure to address non-trade irritants. While the Mexican economy seems to be weathering the tariffs for now, Canada's GDP shrank in the second quarter of 2025 by 1.6 percent on an annualized basis-a much larger contraction than expected.

Outside of North America-with the exception of Nicaragua, which saw an 18 percent "reciprocal" tariff imposed-the rest of the hemisphere has either had the 10 percent baseline tariff imposed or a slightly higher 15 percent tariff. The variation seems to be related in part to if countries have a trade surplus or deficit with the United States. In an effort to further squeeze the Maduro regime, countries that import Venezuelan oil may also face a secondary 25 percent tariff on goods they export to the United States.

How Has the Region Responded?

Soft Power

One of the leaders most concerned with the deep cuts to USAID is President Luis Abinader of the Dominican Republic, who fears not only the impact at home but also in neighboring Haiti, where ongoing turmoil inevitably spills over into his country. In Guatemala, despite the election of a progressive leader, the country has become a willing ally of the Trump administration by accepting deported Guatemalans as well as other migrants, while remaining largely silent about the cuts to aid. Mexico's President Claudia Sheinbaum, in contrast, has said "it is better that they close it," referring to USAID-which her predecessor deemed "interventionist"-while in El Salvador, President Nayib Bukele has happily said that there is "no opposition without [USAID] money," leaving him in control of a one-party state. In Colombia, President Gustavo Petro welcomed the cuts, as he claimed the dependency on the United States was detrimental to Colombia's sovereignty. It is evident that reactions to diminished aid have thus been shaped less by the programs' benefits for democracy, human rights, or civil society than by effects on current leadership, with the strongest criticism coming from governments facing democratic backsliding or led by ideological opponents of the U.S. administration.

Hard Power

So far, responses to Trump's hard-power projection have been mixed. President Sheinbaum has firmly defended Mexico's sovereignty, rejecting the suggestion of U.S. boots on Mexican soil. At the same time, she has made concessions by sending 10,000 additional troops to the border and handing over high-level cartel leaders to face justice in the United States. President Nicolás Maduro in Venezuela condemned the U.S. deployment actions as "illegal" attempts to topple his regime and announced that he would mobilize up to 4.5 million militiamen throughout the country in response. Colombia's President Petro responded by saying a military strike against neighboring Venezuela could drag Colombia toward a regional conflict and warned that "it would be the worst mistake."

On the other hand, some governments in the region have been supportive of U.S. policy. Argentina designated the Tren de Aragua and the Cartel de los Soles as terrorist organizations, as did Paraguay and Ecuador; the Dominican Republic also singled out the Cartel de los Soles, but not Tren de Aragua. Guyana and Trinidad and Tobago expressed their willingness to collaborate on joint actions with the United States against drug trafficking. The prime minister of Trinidad and Tobago, Kamla Persad-Bissessar, said she would give the United States access to its territory should Venezuela invade Guyana, revealing another possible aspect of U.S. naval deployment to the area.

Economic Coercion

The primary result of the Trump administration's economic coercion approach is that major regional trading partners have sought to diversify their markets to reduce their reliance on the United States. Canada has looked to beef up trade with Europe by signing a security and defense partnership with the European Union, allowing Canadian companies to participate in the $840 billion ReArm Europe program, and it now sells more oil to China than to the United States from its Trans-Mountain Pipeline. It has also restarted trade discussions with Mercosur (a block including Argentina, Bolivia, Brazil, Paraguay, and Uruguay). Mexico and Canada are having discussions about strengthening their trade and diplomatic ties, and Mexico has also signed a trade agreement with the European Union, as have the Mercosur countries (though its ratification is far from certain). Meanwhile, longtime U.S. ally Colombia recently joined the Belt and Road Initiative and acceded to the BRICS Bank, and Brazilian exporters are accelerating partnerships in Africa, Europe, the Middle East, and Southeast Asia. Brazil also signed an agreement with Vietnam and sent a trade mission to Mexico. Even smaller countries such as Guatemala that rely heavily on the United States are looking for new partners, including India.

Implications

Soft Power

The loss of U.S. foreign assistance weakens Washington's broader influence; any messaging on democracy, human rights, and the rule of law now carries less weight, making it harder to rally support against backsliding, corruption, and abuses. The loss of assistance in places like Central America, Colombia, and Haiti could fuel political and social instability and undermine regional cooperation. The resulting instability-caused by increased migration pressures and greater openings for China and Russia and the undemocratic values they promote-runs counter to long-standing U.S. interests in the hemisphere.

Hard Power

While military operations may deliver headline-grabbing metrics-such as sinking the Venezuelan boat, killing or capturing a certain number of cartel leaders, destroying production centers, or seizing large quantities of drugs on land or at sea-cartels can quickly replace their leaders and rebuild operations with their substantial financial networks. Only a sustained and intensive campaign against cartel activity-whether in Mexico, the Caribbean, or South America-may significantly erode the capabilities of foreign terrorist and transnational criminal organizations. If the United States were to launch extensive military actions against cartels, inter- and intra-cartel violence would escalate, there would likely be large numbers of collateral casualties, and internal displacement could increase. The resulting chaos and bloodshed, compounded by the reawakening of traumas from past U.S. military interventions, would likely fuel widespread anti-American sentiment. This, in turn, could push countries away from cooperating with Washington on the issues the Trump administration prioritizes most and pave the way for LAC to seek alternative partners, including Beijing and Moscow.

Economic Coercion

A May 2025 opinion poll commissioned by The Economist found that most South American countries surveyed now view China as the more respectful superpower and the more reliable trading partner. Although countries will likely make concessions to maintain access to the important U.S. market in the short term, the Trump administration's economic coercion is leading to a deliberate effort to rewire international trade networks to diversify away from the United States in the medium and long term.

Recommendations

The lament that the United States did not pay enough attention to the LAC region was really a call for greater investment and business partnerships that would allow the region to grow under stable democratic governments, therefore benefiting the United States both economically and geostrategically. Yet under the Trump administration, Western Hemisphere countries are being pressed to take back large numbers of migrants, intensify efforts to combat drug trafficking, and take steps to box out China. All this is happening while U.S. support for development, rule of law, and democracy-strengthening programs has essentially ceased, and as the administration has increasingly used economic coercion or threats of military force to achieve its goals. Even continued access to the U.S. market occurs under less favorable conditions than in the past. These efforts may produce some results desired by the Trump administration in the short term, but they will likely create more distance between Washington and the region over time, to the benefit of U.S. rivals.

These efforts may produce some results desired by the Trump administration in the short term, but they will likely create more distance between Washington and the region over time, to the benefit of U.S. rivals.

To help avoid that outcome, the Trump administration would do well to adhere to the vision outlined by Secretary of State Marco Rubio on the eve of his first visit to the region, when he stated that "even when circumstances demand toughness, the president's vision for the hemisphere remains positive. We see a prosperous region rife with opportunities. We can strengthen trade ties, create partnerships to control migration, and enhance our hemisphere's security." This U.S. "toughness" needs to be accompanied by efforts to create opportunities that contribute to the region's prosperity.

Christopher Hernandez-Roy is a senior fellow and deputy director of the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Juliana Rubio is an associate director with the Americas Program at CSIS. Jessie Hu was an intern with the Americas Program at CSIS.

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