Merry Christmas, from Trump to Maduro

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM), the last of the year.

Trump and Maduro are at it again. While Trump talked little about Maduro and his regime, focusing his public interventions on what seems to be an anticipated crusade to save the midterms, Maduro did quite the opposite. The tyrant is facing a strong hit and the abandonment of his inner circle, so war is his only hope. Perhaps fear is enough to rally citizen support for his cause, but so far, Venezuela is looking at freedom right in the eyes.

In this issue, you will find:

• Venezuela’s Week of Maximum Pressure

• An Ideologically Contested Region

• Chile Joins the Party of Conservative Realignment

• What We’re Watching

As always, please feel free to share GCaM with your friends and colleagues. We all, at the GCaM team, wish you a Merry Christmas and a happy New Year. We will be back with you on Saturday, January 10, 2026.

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Best,

For much of this week, Nicolás Maduro allowed Venezuelans to believe the United States could strike at any moment. It didn’t happen, but direct intervention might not be far away.

State of Affairs. Air raid rumors spread, military units were put on alert, and state television warned of imminent aggression. That sense of impending attack was not accidental. It coincided with President Donald Trump’s most explicit escalation yet: formally designating the Maduro government as a foreign terrorist organization and announcing what he described as a “total and complete” blockade of sanctioned Venezuelan oil tankers.

• While the language was deliberately maximalist, the substance of the move reveals something more calculated than a rush to war.

• Washington is tightening the vise, not pulling the trigger—at least not yet.

Why it Matters. The blockade announcement sits in a carefully constructed gray zone. Trump’s wording focused on “sanctioned oil vessels,” signaling strict enforcement of existing restrictions rather than an indiscriminate naval quarantine. In practice, this distinction matters. A full blockade would constitute an act of war; selective interdiction remains coercive but legally defensible.

• Even so, the threat alone is destabilizing. Venezuela’s oil exports—already constrained and heavily reliant on opaque shipping networks tied to China—depend on risk tolerance from traders, insurers, and shipping companies.

• By injecting uncertainty, Washington can choke off revenue without firing a shot.

• For a regime whose survival rests on oil cash flows, this is economic warfare by design, aimed at accelerating internal stress rather than provoking external confrontation.

Between the Lines. This escalation is unfolding alongside a broader reframing of the regional security environment. The Trump administration’s declaration that fentanyl constitutes a weapon of mass destruction is a matter of authority. The recent strikes on alleged drug-smuggling vessels underscore that this is no longer a symbolic campaign. Notably, the geographic focus has shifted. After initial actions in the Caribbean, U.S. forces are increasingly operating in the eastern Pacific, a pivot that places Colombia squarely in the crosshairs and reframes Venezuela’s crisis as part of a wider narco-security theater.

• That regionalization is politically explosive. The designation of Colombia’s Gulf Clan as a foreign terrorist organization, coupled with Washington’s decision to label Colombia as uncooperative in the drug war for the first time in decades, marks a sharp rupture with a historic ally.

• President Gustavo Petro’s opposition to U.S. operations has only deepened the rift. From Washington’s perspective, this is coherent. Venezuelan state criminality cannot be addressed in isolation if cocaine production and trafficking routes remain intact elsewhere.

• From Bogotá’s vantage point, it looks like collective punishment and unilateralism. The result is a widening diplomatic fault line, one that Maduro is eager to exploit rhetorically even as his own strategic position deteriorates.

Feet on the Ground. Inside Venezuela, the regime’s reaction reveals both resilience and fear. By amplifying the possibility of an imminent U.S. attack, Maduro seeks to rally nationalist sentiment, discipline wavering elites, and justify repression under the banner of external threat. Yet the same narrative betrays anxiety. The White House’s rejection of Maduro’s reported offer to step down after a delayed transition suggests Washington believes time favors pressure instead of negotiation.

• That belief rests on a critical assumption: that sustained economic strangulation, coupled with psychological and intelligence operations, can fracture the regime from within.

• The most plausible scenario remains neither invasion nor sudden collapse, but erosion—officers reassessing loyalties, business intermediaries exiting, and foreign partners quietly hedging their exposure.

What follows. If pressure succeeds, Trump secures a rare geopolitical victory in the Western Hemisphere without committing ground forces. If it fails, he faces an unenviable choice between escalation and retreat. A prolonged, low-intensity conflict would strain regional relations and test domestic tolerance for sustained intervention. Walking away, after signaling resolve, would damage U.S. credibility and embolden adversaries elsewhere. For now, Washington is betting that ambiguity itself is leverage—that fear of what might come is more destabilizing than what has already occurred.

• This week was a reminder that the confrontation has entered a decisive phase. Venezuela is being squeezed economically, isolated diplomatically, and encircled strategically, even as the United States avoids crossing the formal threshold of open conflict.

• Whether that pressure produces defection, negotiation, or prolonged standoff will determine not just Maduro’s fate, but how far the United States is willing—and able—to reassert dominance in its hemisphere without paying the price of war.

The electoral map of Latin America at the close of 2025 captures a region in transition, not through a sudden ideological awakening but through exhaustion.

State of Affairs. The post-pandemic leftist wave that swept the continent after 2019 promised renewal, social justice, and a moral break with the past. In most cases, it delivered rising insecurity, fiscal fragility, institutional drift, and an increasingly self-referential political elite. The result has been a broad, though uneven, correction at the ballot box.

• From the Southern Cone to Central America, voters have not so much embraced the right as they have punished a left perceived as disconnected from daily realities, governing more through symbols and discourse than through results.

Why it matters. This backlash is visible in the succession of elections that reshaped the region over the past two years. Left-wing incumbents or heirs have fallen or weakened in Argentina, Chile, Uruguay, parts of Central America, and key subnational races elsewhere, while right-leaning or market-oriented alternatives have gained ground.

• Even where the left remains in power, as in Brazil, Colombia or Mexico, it governs under growing skepticism and declining political capital.

• Crime, inflation, migration pressures, and institutional paralysis have proven far more decisive to voters than identity politics or ideological purity.

• The post-pandemic left overestimated its mandate, mistaking a moment of social frustration for a durable realignment, and often responded to complexity with moralism rather than policy competence.

The Bigger Picture. The regional shift is also part of a wider global pattern. Across Europe and North America, electorates have rebelled against what they perceive as a detached, technocratic, and culturally prescriptive progressive elite. Latin America, with weaker institutions and less margin for error, has felt this tension more acutely.

• Governments that prioritized performative politics, expansive rhetoric and permanent confrontation with “the system” struggled to manage security, growth and state capacity.

• The right’s resurgence, therefore, is not driven primarily by ideology but by demand for order, predictability and effectiveness.

• Voters are signaling fatigue with governments that speak the language of virtue while failing to deliver basic governance.

In the Radar. This creates both an opportunity and a risk. The opportunity is historic: the right now governs or competes seriously across much of the continent at a moment when voters are receptive to pragmatic reforms, institutional rebuilding, and economic normalization. The risk is familiar. Latin American politics has long been defined by cyclical disappointment, where each ideological swing promises rupture and ends in frustration, paving the way for the next pendulum shift.

• If the new right reduces its mandate to cultural backlash, symbolic reversals, or elite self-preservation, it will merely confirm the region’s pattern of democratic erosion.

• Delivering growth, security, and credible institutions—rather than just opposing the left—is the test ahead.

• Whether this moment becomes a turning point or just another rotation of the wheel will depend not on ideology, but on governance.

José Antonio Kast’s victory confirms Chile’s shift toward a harder right after years of progressive fatigue.

In perspective. A disciplinarian conservative with a clear law-and-order profile, Kast capitalized on insecurity, migration pressures, and economic anxiety to secure a landslide victory with 58% of valid votes in his favor. His win immediately reshapes expectations around governability, market discipline, and state authority. At the same time, it places Chile back into the regional and geopolitical realignment now unfolding across the Americas. The landslide outcome reflects a prolonged internal erosion of Chile’s progressive administrations rather than a sudden ideological realignment.

• After years of unmet expectations on security, migration, and cost-of-living pressures, the governing left entered the election cycle structurally weakened, carrying the cumulative fatigue of the post-2019 period and two failed constitutional processes.

• In the first round, the surge of far-right candidacies fragmented the conservative vote, revealing symptoms of shifting political responses to left-wing governance. Voters increasingly gravitated toward harder, more punitive discourses as confidence in gradual reform and technocratic management collapsed.

• That fragmentation ultimately worked in Kast’s favor. By concentrating the demand for order, state authority, and policy clarity in the runoff, the dispersed right reconsolidated behind the most legible candidate, turning internal division into a pathway for victory.

Why it Matters. The post-election balance of power in Congress sets the real limits of any incoming administration and frames the market’s reading of Chile’s near-term stability. The Chamber of Deputies remains atomized across left, center, and multiple right-wing factions, while the Senate preserves veto power for minorities, making structural reforms difficult and forcing any government into permanent negotiation rather than unilateral action.

• Nonetheless, markets reacted positively but cautiously to Kast’s advance. Sovereign risk indicators stabilized rather than spiked, reflecting expectations of fiscal discipline, respect for macroeconomic rules, and continuity in debt management, even amid political uncertainty.

• Equities and debt pricing also signaled confidence. The IPSA posted selective gains concentrated in banks, utilities, and commodity-linked firms, while bond yields reflected an assumption that Chile retains both the institutional capacity and the willingness to service its debt, provided legislative gridlock does not paralyze governance.

Between the lines. Beneath the domestic adjustment, Chile is repositioning itself within a broader geopolitical realignment in the Americas. Chile is re-entering the right-wing scramble to consolidate supply chains for critical minerals tied to U.S. industrial and financial strategy. Lithium sits at the core of this shift: SQM and Chile’s regulatory framework position the country as a reliable node within broader capital-market narratives linked to the energy transition.

• A harder migration containment posture aims to absorb and neutralize spillovers generated by neighboring left-wing states—governance stress, security externalities, and long-term electoral volatility—by restoring border control as a core function of the state, even at the cost of narrowing the regional humanitarian discourse.

• At the geopolitical level, Chile begins to function as a legitimizing node. As right-leaning governments accumulate across the region, they provide political cover for U.S. pressure strategies on Venezuela, hedging against international lawfare by constructing a belt of electoral and institutional legitimacy that can frame future interference as regionally sanctioned.

In conclusion. Kast inherits a country that has repeatedly shown low tolerance for structural overhauls, even when they originate on the right, forcing any reform agenda into gradualism rather than shock therapy. Furthermore, the president will face a Chilean middle class—still numerically dominant—marked by income stagnation, high indebtedness, and limited upward mobility, making it highly reactive to disruptions while simultaneously demanding order and predictability.

• Kast must balance closer alignment with Washington on security, minerals, and regional strategy without being framed domestically as a U.S. proxy.

• At the same time, Chile’s credibility as a rule-based economy requires Kast to push for the EU–Mercosur agreement, while protecting wine industries and capitalizing on retail and logistics to leverage the new deal.

What We’re Watching 🔎 . . .

Honduras begins manual count of presidential vote after delays [link]

Laura García, Reuters

Honduras’s delayed manual recount underscores how fragile electoral legitimacy has become in polarized systems with weak institutional trust. The decision by the National Electoral Council of Honduras to move beyond the preliminary electronic tally reflects a technical caution, but political pressure from parties unwilling to concede narrow margins.

While a manual count may add procedural credibility, it also extends uncertainty, feeding narratives of fraud and manipulation on all sides. When elections are decided by slim pluralities in a single-round system, every delay becomes a political weapon. The recount may settle the numbers, but it is unlikely to fully restore confidence in a process already shaped by suspicion rather than consent.

El Salvador teams up with Elon Musk’s xAI to bring AI to 5,000 public schools [link]

AP

El Salvador’s decision to integrate artificial intelligence into its public education system, with support from xAI, reflects President Nayib Bukele’s broader strategy of using technology to leapfrog institutional constraints. The initiative aims to introduce AI tools and training in public schools, signaling an ambition to reposition El Salvador as a regional tech hub rather than a low-skill labor exporter.

Beyond education, the move has geopolitical undertones: aligning with U.S.-based innovation ecosystems while distancing the country from traditional multilateral development models. If executed well, AI education could strengthen human capital and attract private investment. If not, it risks becoming another headline-driven reform that outpaces state capacity and widens inequality between connected elites and the broader population.