Mexico, a longtime US economic partner, has already felt the weight of Trump’s tariff threats. Although Mexico’s President Claudia Sheinbaum successfully defused a potential trade clash in January, the risk remains. A 25% tariff on Mexican exports – that are set to take effect on 4 March – could cost the country over $29 billion, mainly in steel, aluminum and autos, according to the Mexican Institute for Competitiveness (IMCO). Analysts warn that such measures could push Mexico into a recession, shrinking the country’s gross domestic product (GDP) by 1.5% over five years while simultaneously driving up inflation. To further complicate matters, Mexico is also a key oil supplier to the US, particularly heavy Maya crude, which is essential for Gulf Coast refineries. Tariffs on oil would raise costs for US refiners and slash Mexico’s revenues, deepening economic strain. As a US -Mexico-Canada Agreement (USMCA) signatory, Mexico could challenge these tariffs as trade agreement violations, potentially leading to legal disputes. While the Wilson Center notes that the peso’s 23% depreciation in 2024 may cushion the initial impact, prolonged tariffs could disrupt supply chains, weaken manufacturing and strain US-Mexico relations.

Though not the target of direct tariffs, Panama has found itself at the center of renewed US strategic interest. It was no coincidence that Panamanian President Jose Mulino became the first world leader to host Secretary of State Rubio in early February. The Trump administration has honed in on the Panama Canal’s significance as a key trade artery, facilitating roughly 6% of global maritime commerce. Its role in energy is particularly crucial, expediting the transport of liquefied natural gas (LNG) and petroleum from the US Gulf Coast to Asian markets. Beyond trade, the administration has expressed growing concern over Hong Kong-based conglomerate CK Hutchison Holdings’ control of the Cristobal and Balboa ports, which serve as critical nodes in global shipping. The push to curb foreign influence, particularly from mainland China, aligns with a broader effort to reinforce US presence, secure vital trade routes and maintain control over energy exports.

Colombia and Brazil, two of Latin America’s largest economies, have also found themselves in Trump’s crosshairs. In January 2025, the administration threatened to impose a 25% tariff on all Colombian imports, escalating to 50% within a week to pressure Colombia into accepting deportees from the US. The move came in response to reports that Colombia had refused repatriation flights of undocumented migrants. Under mounting economic pressure, the Colombian government entered negotiations, leading to an agreement that temporarily halted the proposed tariffs. Meanwhile, Brazil has faced a separate economic blow as Trump imposed steep tariffs on steel imports, directly targeting one of its most critical industries. The Brazilian government has vehemently opposed the measures, arguing that they unfairly single out its economy and may trigger countermeasures. As Brazilian producers seek alternative markets, the tariffs risk increasing competition in regions like Europe and Asia while weakening longstanding economic ties with the US.

Adding to the region’s economic upheaval, President Trump’s decision to revoke Chevron’s license to operate in Venezuela delivers a significant blow to the country’s fragile oil sector. As the last major US company with a presence in Venezuela, Chevron played a crucial role in sustaining production amid years of mismanagement and sanctions. Its departure will significantly impact Venezuela’s crude output, which has relied heavily on Chevron’s technical expertise, equipment and access to diluent. Without Chevron, state-run PDVSA will face more significant operational challenges, potentially leading to declining production and further deterioration of oil infrastructure. This move may also force Venezuela to deepen energy ties with China, Russia and Iran, though these partnerships may not fully compensate for the loss of US expertise and investment. While Chavistas will frame the decision as economic warfare, the long-term consequences could accelerate the collapse of Venezuela’s energy sector, further destabilizing its economy and government.

Trump’s tariff-heavy strategy in Latin America reflects a modern revival of the economic pressure tactics that were once characteristic of US foreign policy in the region. Much like the Roosevelt Corollary’s gunboats, which patrolled the Caribbean to uphold American interests, Trump’s tariffs function as economic warships, pressuring neighboring economies into compliance. Whether through trade restrictions on Mexico, strategic maneuvering in Panama or economic leverage over Colombia and Brazil, his administration has reinforced US economic influence in the region. Yet, just as early 20th-century gunboat diplomacy sowed both order and resentment, these economic measures may secure short-term gains while breeding long-term tensions. The coming months and years will determine whether Trump’s approach strengthens US influence, or pushes Latin America toward new alliances beyond Washington’s reach.