Many political and business leaders in Latin America look ahead to 2025 with concern over the worst-case scenarios that could potentially result from U.S. President-elect Donald Trump’s imminent return to the White House. If Trump follows through with his promise to deport millions of Latin Americans currently in the U.S. back to their countries of origin, the societal impact would be immense. If he follows through on his promised global trade war—including the threat of imposing 25 percent tariffs on all goods from Mexico—the economic pain would likely create a regional recession. If the new administration launches military operations against criminal groups in Mexico, it could create new interstate tensions without resolving the massive security challenges the region faces.
It is all the “ifs” in the preceding paragraph that represent the major challenge for countries in the region seeking to plan out their scenarios for next year. Nobody knows whether Trump will attempt any of those policies or, if he does, whether their scale in practice will match his rhetoric. Once implemented, their real-world impact could turn out to be quite different from what is expected. While Trump promised similarly big changes in his first term, those policies when they were enacted did not become the worst-case scenarios that many of the United States’ international partners feared. It’s also possible that Trump’s second term will be hit by a “black swan” event similar to the pandemic that derailed his first term. So, while the worst-case scenarios are concerning, it is hard for regional leaders to quantify exactly how concerned they should be, given all the unknowns.
Meanwhile, though many of Latin America’s political and business leaders are concerned, the regional reaction is far from uniform. Argentine President Javier Milei and Salvadoran President Nayib Bukele, for example, are celebrating the incoming Trump administration and eager for him to implement his agenda. Both men believe they and their countries will benefit economically and diplomatically from a Trump administration far more than they did under outgoing President Joe Biden. Other center-right politicians around the region, while less openly enthusiastic, are content to embrace Trump. They will find ways to cooperate with his agenda, trading assistance on the logistically challenging deportation scheme—by accepting return of third-country nationals whose governments refuse to cooperate, for instance—for other policy goals. Meanwhile, some business leaders dismiss the possibility of a tariff and trade war altogether and look forward to what they believe will be a more pro-market administration in the United States.