Relationship whiplash in Latin America
Brazil, Argentina, Paraguay, Venezuela
Last week, I presented a matrix and a map of how Latin American countries respond to Trump. Here is some news from the past week that shows how fluid those relationships can be.
Trump and Lula had a lovely phone call in which they discussed trade and the economy and planned to meet again. Lula offered to travel to the US to meet. Marco Rubio will be in charge of the follow-up. Lula also exchanged phone numbers with Trump so they can communicate directly. It was an elegant bit of personal diplomacy from Brazil’s president to potentially reset a relationship that had been spiraling downward.
The notable topic that didn’t make either president’s statement: Jair Bolsonaro. Think about how much lobbying and personal effort Bolsonaro has made in recent years to get close to Trump, only to see it all turn around on him in a brief few weeks. I think it’s likely Trump will turn against Lula again at some point in the future, but that doesn’t mean he’ll turn toward Bolsonaro.
You know who is looking on at that Trump-Lula call and Bolsonaro snub with nervousness? Javier Milei. As I wrote in this Monday’s newsletter about US policy in Latin America, the big concern in Argentina is that Trump pulls the rug on the promised bailout as the politics of it become more difficult. The US government shutdown, pressure from soy farmers, questions about who backed the deal, and the anti-bailout coalition within MAGA all create incentives in the US political system to back away from Milei. Add to that the potential of the new scandal, and Milei’s political capital will implode in the upcoming midterm elections despite the promise of US support. The Lula call shows how Trump can change his mind. Milei is an ally of convenience; Trump has a long history of preferring to back winners.
Like the Bolsonaro family, Horacio Cartes has been lobbying for years for his sanctions to be removed. Despite the US government shutdown, OFAC announced that those sanctions were lifted as of yesterday. The State Department declined to tell Reuters whether his visa to the US was still restricted, a silence that would have been typical under previous administrations but is odd given the public “Quitavisas” policies of the current one. Cartes took a victory lap on social media and thanked President Trump, whom he viewed as personally responsible for helping him. It also helps that Cartes’s Colorado Party is firmly in control of the country and has a great relationship with Trump and his allies.
Trump ordered Ric Grenell to stop diplomatic negotiations with Nicolas Maduro. That is a big turnaround, given that Grenell’s handshake with Maduro in January of this year occurred during the first foreign visit by any Trump representative during his presidency. Despite the fact that oil is still flowing to the US and migrants are still being deported to Caracas, the relationship between Trump and Maduro continues to worsen. The two countries seem to be on a path toward a more direct confrontation. The US strategy appears to be an attempt to cause panic and paranoia within the Venezuelan government. The Polymarket odds for a US military strike against Venezuela are over 50% as of this morning.
Yet, look at the other news above. Trump is willing to change course. He’s willing to burn previous allies. He likes winners and those who appear strongest. If Maduro survives the pressure of the next few months, negotiations and better relations could easily be back on the table early next year. Maduro’s opponents are trusting that Trump has their back right now, but they should be concerned that Trump’s relationships in the region are often transactional and temporary.
