Name: How Latin America tries to cope with Trumps tariffs
Uploaded: 2025-11-24T20:46:26.563Z
Duration: 5 min 52 s
Description: Trade between the U.S. and Latin America tops more than a trillion dollars, but tariffs and shifting supply chains are causing uncertainty. How do Mexico, Brazil, and others navigate this changing landscape?

Trade between the U.S. and Latin America tops more than a trillion dollars, but tariffs and shifting supply chains are causing uncertainty. How do Mexico, Brazil, and others navigate this changing landscape?

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

US President Donald Trump imposed a 10% tariff on most Latin American countries as part of a broader policy of reciprocal tariffs. Despite these measures, trade between the US and Latin America and the Caribbean exceeded $1 trillion in 2023, with Mexico being the largest partner. The US maintains a significant trade deficit with Mexico but holds favorable balances with other countries in the region.

Latin American industries, especially those heavily dependent on the US market, are experiencing uncertainty and are seeking ways to adapt, including relocating production and urging their governments to negotiate new deals. While some sectors are exempt from tariffs, such as oil and certain minerals, the overall impact is expected to unfold over time. Meanwhile, China is increasing its economic presence in the region, offering Latin American countries alternative trade and investment opportunities.

How Latin America tries to cope with Trump's tariffs

How do you see our relationship with Latin America and Brazil? Great. It should be great. They need us much more than we need them. We don't need them. Shortly afterwards, the US president announced what he called reciprocal tariffs for the entire world. Most Latin American countries received a 10% tariff. But what is the state of trade between the United States and Latin America and the Caribbean? The exchange of goods, including services, between the two markets exceeded $1 trillion in 2023. According to the UN, this enormous figure is due primarily to Mexico. In 2024, US trade with its southern neighbor totaled $840 billion. Brazil followed with $92 billion in bilateral trade, then Colombia with approximately $36 billion, and Chile with $34 billion. And what goods are we talking about? The US imports vehicles and auto parts, capital goods, industrial supplies and materials, food, animal feed and beverages, and consumer goods from the region. As for exports, it sends industrial supplies and materials, capital goods, motor vehicles, parts and engines, food, animal feed and beverages, and consumer goods. But the US maintains a growing trade deficit with Mexico, which exceeded $170 billion in 2024. With several other Latin American countries, the trade balance is actually quite favorable. Experts believe the tariffs imposed by Donald Trump have been used more as a bargaining chip on migration and fentanyl trafficking. The question is whether the United States can be self-sufficient in these goods. Could it adapt to having refineries produce and use the oil produced in the US? That's very expensive and takes a long time to process. So for the moment, it would imply an increase in prices, and the same goes for agricultural goods. And the same is true for manufactured goods. Müller Technoplastics of Mexico makes injection-molded plastic parts for vehicles and has many customers in the United States. Clients are trying to relocate projects within the United States to avoid potential disputes and risks related to possible decisions by the American market or the American government. He explains that clients who decide to relocate will no longer benefit from the low labor costs and the lower costs in general in Mexico. As we know, labor in the US is much, much more expensive than what we have here in Mexico. The flexibility we have here is very high, including when there are peak customer demands, so we can even manufacture on weekends if necessary. Other countries can also be affected by having specific industries dependent on the US market, such as the Guatemalan textile industry, which in 2023 exported $2.2 billion worth of textiles, 70% of which went to the US. For the moment, there's a bit of uncertainty, a bit of concern. We know of other industries like ours that, for example, are currently in a period of rest because they aren't able to absorb the tariff that was imposed on them. We have to rearrange work orders. We have to find a way to react faster. One thing that many affected companies have in common is that they hope their country's governments will negotiate new deals with the US that will reverse the tariff burden as soon as possible. But why is there so much talk of uncertainty in Latin America rather than the economic blow that Trump's tariffs represent? Firstly, because the real effects can take months to materialise, since large companies plan their contracts and supply chains well in advance. Furthermore, a significant portion of the region's imports are subject to these tariffs. So far, oil and certain minerals have been exempt, meaning the average effective tariff per country can be lower, and in some cases much lower, than the nominal 10%. It's clear that the number one strategy is to maintain good trade relations with the US in a scenario where potential tariffs are minimised. On the other hand, industrial powers like China could expand their influence in the region due to US protectionist measures. In 2024, bilateral trade with the Asian giant exceeded $500 billion and could grow even more this year. Latin America will most likely remain an important trading partner and an important investment partner, especially in infrastructure projects with China in the coming years. Despite Trump's rhetoric about needing little from the Latin American market, productive interdependence with Mexico makes it a fundamental pillar for the United States, even without Mexico. Trade ties with the rest of the region are significant enough that an escalation of tariffs would strain both markets, making negotiations with Washington and diversifying export destinations crucial in the coming months and years.

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How Latin America tries to cope with Trump's tariffs

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