The 2024 U.S. Presidential Election: Implications for Latin America
With Donald Trump's expected return to the White House, it’s clear that his presidency will have significant consequences for Latin America. His administration's policies are likely to impact the region in three critical areas: immigration, trade, and the war on drugs.
Immigration Policy
One of the most immediate effects of Trump’s presidency will be on immigration policy. His administration is expected to implement stricter immigration laws, including what he calls the “largest mast deportation in US history”. This would have devastating economic consequences for Central American countries like El Salvador and Guatemala, where remittances account for approximately 20% of GDP. If these financial lifelines are cut off, the economic stability of these nations could be severely threatened. Not to mention, these deportations would also have a significant impact on the American labor force. Industries like agriculture, construction, and food services, sectors that heavily rely on immigrant labor, could face severe labor shortages, driving up costs and potentially causing slowdowns in production. This ripple effect would mean higher prices for consumers. The U.S. economy would feel the weight of these policies just as much as Latin America, complicating the picture for both regions.
Trade Relations
In terms of trade, Trump's intention to place tariffs on all imported goods may lead to more expensive imports. His inflationary policies could result in slower economic growth and higher borrowing costs across Latin America. For Mexico, the U.S.’s biggest trading partner, things could get tricky. Though Trump probably won’t dismantle the U.S.-Mexico-Canada Agreement (USMCA), he may use trade as a tool to push Mexico on migration issues, especially regarding foreign investments from countries like China, which use Mexican ports to avoid higher U.S. tariffs. On a broader economic level, Trump’s spending increases and tax cuts have inflationary effects: they strengthen the dollar, reduce capital flows into Latin America, and create higher borrowing costs. In short, countries south of the U.S. could face greater challenges in financing their economic growth, also generating substantial uncertainty for the region’s export-oriented economies.
Political Dynamics
With Trump back in office, Latin America's political landscape could see increasing political tensions. Countries with leftist leaders, such as Colombia under Gustavo Petro and Brazil with Luiz Inácio Lula da Silva, may find themselves at odds with a Trump administration that favors right-wing counterparts like El Salvador's Nayib Bukele and Argentina's Javier Milei. The potential deterioration of relations with left-leaning governments could further complicate diplomatic ties in the region. In terms of drug policy in the region, increased pressure from Washington could exacerbate tensions between the U.S. and Colombia, especially given the recent rise in cocaine production. The ongoing challenges surrounding drug policy could add yet another layer to already complex U.S.-Latin American relations
Just east of Colombia, Trump’s approach to Venezuela remains ambiguous. While he might adopt a strong anti-communist stance, his history of engaging with authoritarian leaders like Kim Jong Un raises concerns about whether he would reimpose sanctions on Nicolás Maduro or instead prioritize a more transactional relationship for oil purposes. This path would put the Venezuelan opposition in a tough spot, with few options left for advancing democratic change.
Trump’s second presidency is set to redefine U.S.-Latin American relations, bringing heightened tensions and uncertainty to the region. Stricter immigration policies, potential disruptions in trade, and shifting political alliances will pose significant challenges. With U.S. decisions increasingly influencing the region’s future, Latin America finds itself at a critical point, where the stakes are higher and the path ahead more uncertain than ever.