Revisiting the responses of LatAm leaders
I look forward to more readers telling me how wrong my chart is!
Tomorrow, I’m the lunchtime keynote speaker at Jefferies Latin America Conference. The event is invite-only, but I hope to see at least a few readers there. Come say hi.
The big theme for my talk is how the policies and uncertainties coming from the US will reshape Latin American political risk over the next 12 months. It’s less about what the US is doing and more about the various ways Latin American leaders, companies, and populations respond. That’s definitely been a theme across articles I’ve published in recent months, especially the 3x2 matrix of how Latin American leaders are responding to Trump.
As I prepare for tomorrow’s presentation, it’s a good opportunity to mark up the chart and see what I got wrong and what may have changed in the past two months. Also, it was fun to make the chart more chaotic because that’s how we all feel.
When I wrote about that matrix, one comment was that no leader should be considered stuck in the box I put them in. Trump may start to treat various leaders differently, and the leaders can adapt and respond in new ways.
That’s something we’ve seen out of both Gustavo Petro and Xiomara Castro. Petro has toned down his criticisms of Trump online and is reportedly among the leaders negotiating with Trump on reducing Colombia’s tariffs. Despite losing his very professional foreign minister, he has given more responsibility to his team to handle the Trump administration through bureaucratic channels rather than via Twitter fights. Castro, meanwhile, is allowing the US to use an airfield in Honduras to transfer deported Venezuelan migrants. There is something significant to the fact Castro does not see benefits in publicly fighting Trump, even in a moment when populist rhetoric may benefit her party in the election later this year.
With Petro and Castro changing style, it’s clear leaders don’t want to stick around for long in that bottom-right box of danger. Every single leader who has attempted it has figured out that confronting Trump on his own turf - a confrontational populist - is a losing battle against a leader who is willing to use heavy coercion and who delights in the attention of a good public feud.
Maduro, on the other hand, is being pushed by at least some officials of the Trump administration into the Trump opponent camp even as he attempts more backroom negotiations. Yesterday’s newsletter mentioned Claver-Carone’s recent comments about how the Trump administration is united on an agenda to implement “maximum pressure” this time that they failed to get even half-done last time. It’s a comment that suggests far more pressure ahead. Yet, the fact that Trump can move faster to shut down USAID, NED, and the Wilson Center than it can to remove Chevron’s license to produce oil in Maduro’s Venezuela demonstrates some of the political and economic limitations on this new sanctions and “secondary tariffs” policy.
The other leader who may be headed for that confrontation box is Lula. Brazil’s president has been visiting foreign leaders and wants to position himself as a key alternative voice in various international fora (G20, UNGA, BRICS, COP30) later this year. Trump, meanwhile, will be pushed by his allies to take on Lula more publicly as they position themselves for the 2026 Brazilian election. There is a clash coming here. While I don’t know that Lula will stick it out in the bottom right box, don’t doubt that Brazil brings a lot more power and influence to the table than Colombia or Honduras could. Trump, in his relations with China and Russia, has shown greater respect for antagonistic foreign leaders who can stand toe-to-toe with him compared to US allies. Lula wants to play in that league.
The other box to watch is the bottom left box of Trump’s populist allies. Bukele and Milei have both received favorable IMF agreements, and Bukele is getting money and influence from his role in the deportation effort. Other leaders will take note of the economic benefits.
As I wrote in the initial post about this matrix, I’m less concerned with getting the categorizations exactly correct than I am with thinking about the framework and determining takeaways.
The other issue on my mind for this speech is how the uncertainty and Trump-focused politics will play into upcoming LatAm elections and the anti-incumbent environment. Both the Ecuador and even the (usually not considered Latin American) Canadian elections will be interesting tests in that regard. I’ll write that up for a future week.