Trump’s gamble in Venezuela

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

In this issue, you will find:

• Trump turns up the heat on Maduro and his Praetorian Guard

• U.S. ex machina: Milei’s crisis

• What We’re Watching

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Best,

The GCaM Team

The internal collapse Trump seeks in Venezuela is beginning to show signs of success, with Maduro closer than ever to falling.

The big picture. Last week, shortly after Trump announced yet another strike on a Venezuelan vessel, Marshall Billingslea—former Presidential Envoy and Assistant Secretary of the Treasury for Terrorist Financing—set off alarms in Caracas. Billingslea posted two pictures of Maduro’s personal pilot, Bitner Javier Villegas: one in military uniform and another in a meeting with an undisclosed individual. The caption read, “Happy birthday, ‘General’ Bitner!”

• The message suggested Villegas had struck some sort of deal with the U.S., adding to the mounting pressure on Maduro.

  
  

• Sources within Maduro’s inner circle claim paranoia in Miraflores is running at unprecedented levels, as reports of top military deserters allegedly negotiating directly with the White House to hand over the president circulate online.

  
  

• While these are impossible to verify, they have taken a toll on the people surrounding Maduro as well as the president himself, much like it happened in Berlin in early May 1945.

Why it matters. Trump has deployed a military fleet to the Caribbean coast, and the message is clear. Claims that the operations are about stopping drug flows to the U.S. are easily dismissed. If Trump truly aimed to strike cartels, he would focus on Guayaquil, Tijuana, or San Diego—among the busiest drug corridors in the world.

• The Cartel de los Soles is a significant exporter, but pales in comparison to the Sinaloa Cartel’s Pacific operations.

  
  

• Moreover, InSight Crime describes the group not as a structured hierarchy but as a “loose network of cells within the army, navy, air force, and Bolivarian National Guard.”

  
  

• A threat to the Cartel, then, is a threat to Maduro’s inner circle and top brass—his own Praetorian Guard—who now face direct exposure to U.S. intervention if they remain loyal.

Between the lines. Trump means business. He knows he can pressure Maduro with military threats because the Venezuelan president has shown personal weakness. While Maduro takes to television with proud, confrontational rhetoric—calling out Trump and threatening retaliation—Reuters reported he recently sent a personal letter to the U.S. president pledging to work hand in hand to resolve the crisis.

• Trump’s response? Reportedly striking four Venezuelan drug vessels—presumably carrying more than 20 people—and pushing legislation to give the president legal authority to “kill narco-terrorists.”

  
  

• Yesterday, reports emerged that Washington is preparing to strike targets in Venezuela’s mainland. And Trump knows Maduro has no real capacity to retaliate.

  
  

• Trump appears willing to push boundaries to provoke Maduro, either to trigger a timid response justifying further U.S. escalation or to expose him as weak before the only audience that matters: the inner circle keeping him in power.

What follows. Maduro may be approaching a point of no return, something he never imagined possible. Under Secretary of State Marco Rubio’s leadership, oil deals will not slow Trump’s advance. Rubio—personally close to María Corina Machado—has become Maduro’s main concern and has earned Trump’s trust, even above Elon Musk during the early Trump-Musk honeymoon, now long over.

• Maduro has remained in power thanks to the conditional loyalty of his military high command, secured by the economic privileges of his narco-dictatorship.

  
  

• Those privileges, however, are now undermined by a direct threat to their lives from U.S. military power. His inner circle is nervous, and rumors of imminent action flood the halls of Miraflores Palace.

  
  

• Never has the Chavista regime faced such challenges. Maduro’s assumption that the Trump administration would continue Biden’s empty threats turned out to be a bluff call gone wrong.

Milei’s government has slipped into acute financial stress following a major political setback. The Peronist party, led by Axel Kicillof, secured victory in the Buenos Aires provincial elections—where 40% of Argentina’s electorate resides. The liberal administration is losing political room to maneuver, yet the United States appears intent on sustaining it through any financial means necessary.

The big picture. In the weeks leading up to the elections, a trifecta of vulnerabilities converged to undermine Milei’s political and economic standing.

• Allegations of a corruption scandal involving the president’s sister, Karina Milei, eroded the administration’s moral authority and dominated media coverage.

  
  

• Signs of a weak grip over his cabinet—suspected “moles” and a damaging statement from a former key adviser—projected disarray at precisely the moment markets demanded coherence.

  
  

• Beneath the political turbulence lay persistently high inflation and a fragile exchange-rate regime that heightened investor anxiety.

How it works. Political instability and a self-reinforcing cycle of dollar demand are at the core of Argentina’s financial crunch.

• With Central Bank reserves running low, widespread hedging against peso depreciation drove up demand for dollars, pushing the dólar blue—the black-market exchange rate—ever higher.

  
  

• Argentine stocks and bonds sold off as default risks mounted: fewer dollars imply a weaker ability to service debt. Investors demanded higher yields, raising financing costs.

  
  

• Absent a clear plan on fiscal deficit, tariffs, and currency management, interest rates rise, and growth slows.

Why it matters. For Washington, Argentina represents a critical geopolitical hinge. U.S. foreign policy in the region has tilted toward right-wing, U.S.-aligned governments ahead of a series of key elections.

• Washington’s readiness to provide dollar liquidity backstops has improved market sentiment, indirectly boosting Milei’s electoral prospects.

  
  

• Argentina’s position is strategic: it influences Brazil’s trajectory and, by extension, global value chains in agriculture, energy, automobiles, and aerospace—making Buenos Aires pivotal for regional alignment and supply-chain resilience.

In conclusion. Argentina’s crisis stems from the convergence of politics and prices: a credibility shock from scandals and cabinet drift, a brittle forex regime under stubborn inflation, and markets quick to punish uncertainty.

• If fiscal discipline, tariff normalization, and a coherent FX strategy take precedence, Milei’s narrative of recovery and adjustment may yet regain oxygen on the brink of a critical election.

What We’re Watching 🔎 . . .

DEA faced pushback at White House, Pentagon after urging Mexico strikes [link]

Dan Lamothe and Ellen Nakashima, The Washington Post

Internal divisions have surfaced in Washington over how far the Trump administration should go in using military force against Latin American cartels. According to people familiar with the matter, DEA officials earlier this year advocated for targeted strikes inside Mexico—against cartel leaders and drug infrastructure—after cartels were labeled foreign terrorist organizations. The proposal alarmed officials at the Pentagon and White House, who stressed there was no congressional authorization or clear legal framework for such action.

While the Mexico plan was shelved, this month the administration launched deadly maritime strikes on alleged Venezuelan “narco-terrorist” boats in the Caribbean, killing over a dozen people. The Pentagon insists the operations comply with U.S. and international law, though some officials and legal experts disagree. Mexico’s President Claudia Sheinbaum has repeatedly demanded respect for national sovereignty, even proposing a constitutional amendment to bar foreign interference. Yet U.S. officials continue exploring legal and legislative avenues to expand the fight. A draft bill circulating in Congress would authorize the president to use “all necessary and appropriate force” against designated narco-terrorists.

Trump´s change of heart on Lula may be thanks to Brazilian beef tycoon [link] Luciana Novales Maghalaes and Bernardo Caram, Reuters

A behind-the-scenes meeting between U.S. President Donald Trump and Joesley Batista, co-owner of Brazilian meat giant JBS, may explain Trump’s unexpected softening toward Brazil’s President Luiz Inácio Lula da Silva at the UN General Assembly. Trump, who recently imposed sweeping 50% tariffs on Brazilian imports—including beef—praised Lula in his UN remarks after months of friction. Sources claim the Batista meeting, held three weeks earlier, influenced Trump’s shift. Batista reportedly argued that the tariffs were driving up U.S. beef prices.

The Batistas have longstanding ties to Brazilian politics, including loans to JBS under Lula’s earlier presidency. JBS’s U.S. subsidiary, Pilgrim’s Pride, also donated USD 5M to Trump’s inauguration committee. Other Brazilian firms, such as Embraer, are lobbying Washington and have already secured partial tariff relief. While Lula and Trump are expected to meet soon, the episode highlights how economic leverage can reset fraught political relationships across the Americas.