Latin America survived the first wave of the U.S. tariff war — despite Trump
On April 2, Donald Trump appeared in the White House garden to announce new tariffs against 185 countries around the world, which he claimed «have been robbing us for decades like no country has ever been robbed before». He dubbed this date «Liberation Day», claiming the decision would reshape global trade for months, if not years, to come.
Colombian coffee, Peruvian blueberries, Argentine wine and steaks, Ecuadorian shrimp, Bolivian lithium, Peruvian silver, and Chilean copper — these are just some of the Latin American products facing new 10% tariffs from the U.S. government.
Mexico was excluded from these reciprocal tariffs announced by Trump, as he had previously imposed 25% tariffs on Mexican steel, aluminum, and cars.
Almost all Latin American products will be subjected to a 10% tariff, which is the minimum established by the White House in this new era of international trade, undermining decades of a rules-based tariff system.
Usually, countries apply tariffs to protect domestic industries against unfair competition from abroad. However, this time the U.S. government unilaterally unleashed a tariff storm upon almost the entire world.
This new U.S. tariff war has brought uncertainty to markets, paused investments, created doubts about future exchange rates, and raised concerns about reactions from the most affected countries.
Latin American countries were among the least affected, except Venezuela and Nicaragua, facing tariffs of 15% and 18% respectively, driven purely by political rather than economic motivations.
Similarly, despite the base tariff on most Latin American imports into the U.S., the new tariff policy includes exceptions. Goods currently exempt include copper, pharmaceuticals, semiconductors, wood products, gold bullion, energy, and other minerals unavailable in the U.S.
Experts from the oil sector believe the absence of energy from the tariff list means oil exports will remain unaffected.
Overall, the tariff war has placed Latin America at a crossroads between the U.S., Europe, and China. While China is tempting, it remains dangerous due to North American sanctions. The U.S. route is tried-and-true but risky due to Trump’s unpredictable policies. Europe seems like the safest option — but also the least reliable.
Regardless of whether the region prospers next year or experiences mild recession due to the trade war, Latin America and the Caribbean will reduce dependence on the U.S., strengthening regional ties and global trade relations.
Significantly, «Over the past two decades, the internationalization of Latin American companies has gained increasing prominence. Driven by the need to diversify markets, reduce regional risk exposure, and seize new trade and technological opportunities, many regional companies began expanding beyond national borders», notes the latest 2025 Global Latam report. According to its data, foreign direct investments from Latin America reached $53.035 billion in 2024, a 50% annual increase.
Recent IMF forecasts project growth in Latin America and the Caribbean at 2.0% in 2025, rising to 2.4% in 2026 — double the EU’s rate and higher than the U.S. and the average of developed nations.
At first glance, Trump made little distinction between allies and adversaries. Leftist presidents like Brazil’s Luiz Inácio Lula da Silva and Colombia’s Gustavo Petro faced the same tariffs as right-wing presidents Javier Milei of Argentina and Nayib Bukele of El Salvador. Panama and Ecuador, where the U.S. dollar serves as the national currency, are also in the same boat.
In French overseas territories like Martinique and French Guiana, tariffs turned out lower than in France, opening loopholes for circumventing higher tariffs on French goods via these territories.
Moreover, Trump’s administration is considering higher tariffs on goods, including components, from Asia transiting through Latin American countries.
These complexities suggest that the White House gave minimal thought to the 10% base tariff specifically for Latin America and the Caribbean.
Amid these uncertainties, the 10% base tariff doesn’t appear reassuring. If Latin America emerges victorious from this trade war, it will be despite, not thanks to, Trump’s policy.
When Trump declared from the Oval Office that Latin American countries «need us far more than we need them», he exaggerated significantly. The recent «Liberation Day tariffs» bear a striking resemblance to Latin America’s Import Substitution Industrialization (ISI) policies of the 1950s, which used high tariffs to develop domestic industries, seeking economic independence and boosting local production.
Trump’s tariffs likely serve primarily as a political tool rather than economic policy. Analysts suggest the President may offer tariff relief to companies aligned with his broader political agenda. If he succeeds in compelling these firms to invest significantly in key industries, they effectively become conduits for state investment. It’s a risky bet, but it might make his tariff plan viable.
«It appears that Latin America is better positioned than others. Nonetheless, we will all face a global downturn in trade», Joan Domene, chief Latin America economist at Oxford Economics, told BBC World. «An economic slowdown in the United States, a major regional trading partner, will directly impact Latin America’s economy», the expert added.
Economies are so intertwined that a downturn or recession in the U.S. will immediately ripple through Latin America. JP Morgan already forecasts a 60% chance of U.S. recession this year.
What is behind these dramatic policy shifts?
The most likely explanation is that Trump’s tariff obsession is less about trade and more about power.
«By imposing exorbitant taxes on foreign goods, Trump forces everyone — foreign governments, major corporations, and even U.S. labor unions — to come begging for relief», writes Miami Herald international affairs columnist Andrés Oppenheimer. «He alone decides who deserves leniency».
Meanwhile, Latin Americans, relieved by this temporary respite in Trump’s tariff wars, risk overlooking the broader picture — a potential global recession sparing no one, not even the United States.