Trump’s Latin American Southern Strategy

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

In this issue, you will find:

•Trump’s Latin American Southern Strategy

•All Quiet on the Venezuelan Front?

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Trump’s Latin American Southern Strategy
959 words | 5 minutes reading time

Latin America’s U.S.-aligned club of friends will be reshuffled on January 20, and much of Central America appears to have fallen out of favor.

Panorama. The Trump administration will emphasize Latin America, which had in recent years been somewhat neglected. U.S. priorities in the region need not be repeated: immigration, transnational crime, and China’s growing influence.

• It remains to be seen whether, on balance, this newfound attention is to the region’s benefit. Trump may seek to crowd out Chinese investment, which is unlikely to be ousted in sectors where China commands a substantial lead and U.S. lenders remain skeptical, like infrastructure and project finance.

• He may prove assertive in his defense of U.S. interests, adopting punitive measures against countries deemed “recalcitrant” in their cooperation on immigration. 

• It is often forgotten that certain countries, among them Venezuela and Cuba, but also China, are invariably reluctant to take in their repatriated citizens. This explains drives to resettle migrants elsewhere, with Panama being a strong contender. Indeed, pressure will be placed on Central American nations to act as buffer states.
  
  

American System. Save for Mexico, trade with Latin America has attracted relatively little attention. Trump’s much-vaunted universal tariff would, if enacted, encourage heightened trade with China, which has in recent years largely displaced the United States as South American nations’ leading trading partner.

• Central America is at particular risk. Unlike South America, it is U.S.-reliant on all fronts, with China being a relative newcomer, although a steadily advancing one. Its exports are primarily U.S.-bound; its remittances, U.S.-outbound.

• In 2022, for example, 52% of Nicaraguan exports went to the United States. In 2023, nearly 80% of remittances, representing 26.1% of GDP, were attributed to the U.S.-based Nicaraguan diaspora. Similar patterns hold across Central America.

• Trump’s fondness for tariffs, combined with Rubio’s vehement distaste for the region’s extant dictatorships, could lead to Nicaragua’s suspension from DR-CAFTA. The State Department has traditionally scorned the idea, arguing it would inflict suffering upon the Nicaraguan people, who would emigrate in droves. Trump, a maverick, may do away with such norms.
  
  

The Club. Incoming Secretary of State Marco Rubio’s “Building a Pro-America Future in our Hemisphere,” published in The National Interest last April, shines light on Trump’s envisioned system of alliances. At the time, Rubio listed a number of preferred partners: Argentina, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guyana, Peru, and Paraguay. 

• Governed by right-wing, or at the very least technocratic, presidents, these nations’ are not all alike, with some quite open to flirtations with Beijing. To illustrate, Paraguay maintains diplomatic relations with Taiwan, while Peru recently cut the ribbon on its Chinese-built Port of Chancay.

• This perhaps explains Rubio’s nod to cultural issues: “[W]e should stop exporting progressive social values that are controversial even inside the United States.”

• “[W]e need to be more supportive of our neighbors when they signal a willingness to work with us, as opposed to China,” Rubio adds, suggesting increased U.S. involvement in the region will not be purely corrective.
  
  

Isthmian Worries. In the Northern Triangle, only El Salvador makes the list of future Trump allies. The current Guatemalan government, closer to the Biden administration than to the United States per se, may lose the preferential treatment it has enjoyed over the past year. 

• In Honduras, President Xiomara Castro, ever closer to China, Russia, and Iran, has been treated with kid gloves despite her open vendetta against the State Department, which she holds responsible for the 2009 coup against her husband, then-President Manuel Zelaya. 

• Tegucigalpa is negotiating a free trade agreement with Beijing; an early harvest scheme is already in place. Last year, Castro denounced the ICSID Convention, which protects—with excessive zeal, some suggest—foreign investors, and terminated the U.S.-Honduras extradition treaty, limiting counternarcotics efforts, and if cynics are to be believed, protecting her relatives.

• As Central American leaders are wont to do, she remains largely unbothered by the immigration crisis and recently threatened to expel U.S. forces at Soto Cano Air Base if Trump’s mass deportations come to pass.
  
  

Between the Lines. For Guatemalan President Bernardo Arévalo, the Biden administration has served as an invaluable stalwart. U.S. support has been vital to Arévalo’s long-running feud with the attorney general and the passing of Guatemala’s Antitrust Law.

• Until now, U.S. foreign policy has aligned with Arévalo’s interests; this will change under Trump. Arévalo will have to focus on what matters to Washington: countering immigration and maintaining a strong relationship with Taiwan.

• He is unlikely to irritate Trump or Rubio on the latter front. In the early days of his presidency, he briefly toyed with the idea of establishing commercial, but not diplomatic, relations with China. Beijing deemed this idea risible, an amateurish attempt at circumventing the One China principle, later blocking several shipments of Guatemalan goods.

• Regarding immigration, he will have to give in if he wishes to retain U.S. support, as former President Jimmy Morales was compelled to do with the Safe Third Country Agreement, which was highly resented by his supporters.
  
  

Balance. According to Rubio, the left can only be neutralized via a regional right-wing alliance to reassert U.S. hegemony. Patronage is in store for those who join the club of friends, meant to ward off China, Russia, and Iran—but especially China. For those explicitly hostile to the United States, a painful four years await.

• Like his father—who allowed the Truman administration to conduct syphilis experiments on Guatemalan soldiers, inmates, and psychiatric patients—Arévalo will have to compromise his government’s ideological vision to retain Washington’s favor, or at least avoid invoking its wrath.

• In El Salvador, President Nayib Bukele can count on a more favorable view from the United States. Little will change for Costa Rican President Rodrigo Chaves, already a Washington darling. 

• Rubio’s idealized alliance is far from unbreakable. Trump has shown himself perfectly willing to blackball those found wanting, and he has not shied away from criticism of Bukele, a heterodox centrist-cum-conservative idol.

All Quiet on the Venezuelan Front?
743 words | 4 minutes reading time

On Friday, Venezuelan strongman Nicolás Maduro was sworn in for his third term in office. If he gets his way, he will rule for at least the next six years. Maduro is widely believed to have been trounced at Venezuela’s July presidential election, but official results accorded him 51.95% of the vote.

• Of course, the opposition’s credible forensic recount of the results paints a different picture: 67.08% for retired diplomat Edmundo González Urrutia against Maduro’s 30.46%.

• González, it must be recalled, substituted opposition leader María Corina Machado after Venezuelan courts capriciously found her ineligible to run. He regards himself as Venezuela’s rightful president, a claim the United States supports, although it appears unlikely to act upon it.

• For the time being, the United States has increased its $25 million reward for information leading to Maduro’s capture. The European Union and the United Kingdom have sanctioned additional Venezuelan officials.
  
  

Overview. Maduro’s hold on power rests on his control over the security forces. To a considerable degree, the “Bolivarian pact” is kept from fraying by fear of what may come after the regime’s fall; Maduro’s generals, although perhaps not their men, are right to fear repercussions, including but not limited to imprisonment. 

• González has not renounced his quest for the presidential sash. Granted asylum by the Spanish government, he had vowed to enter Venezuela in time for the inauguration. This did happen, with Machado deeming it impracticable. 

• González recently embarked on a tour of the Americas, where he sought to drum up support for his cause. He met with President Joe Biden at the White House, likely to no avail. 
  
  

Between the Lines. The day before the inauguration was a chaotic day. Hundreds of thousands of Venezuelans took to the streets to demand the election results be honored, while María Corina Machado, the anti-Maduro opposition’s undoubted leader, made her first public appearance in 133 days. 

• According to Machado’s team, she was detained by regime security forces and coerced into recording videos denying her capture. Machado was released after the videos were published to a bewildered response. Regime figures, for their part, deny she was ever detained.

• This comes after military counterintelligence operatives were alleged to have warned against attending the demonstrations, lest participants be arrested by the security forces.
  
  

Highlights. In Washington, general repudiation of Maduro’s regime constitutes a bipartisan consensus, although Republicans have lambasted what they interpret as a meek response from the Biden administration. The incoming Trump administration is likely to favor more assertive policies. Particularly aggressive scenarios, like a U.S.-led intervention, remain fanciful.

• To this end, the president-elect appointed Mauricio Claver-Carone, a confidant of Marco Rubio, as the State Department’s special envoy to Latin America. Claver-Carone, a Cuban-American, is known for his hardline stance against the Cuban and Venezuelan regimes.

• When announcing his appointment, Trump said, “It’s time to restore order in our own hemisphere. Mauricio knows the region, and how to put America’s interests FIRST.”
  
  

Yes, But. It remains to be seen whether the Biden administration’s single-largest concession to the Venezuelan regime—a sanction-circumventing license for Chevron—will be affected. This is a byproduct of the Barbados Agreements, under which the regime agreed, and failed, to hold free elections in exchange for sanctions relief. 

• With the scandal following the elections, the White House reintroduced most of the previously lifted sanctions, but it allowed Chevron to continue operating in Venezuela. This provides some relief to energy markets, at the cost of bankrolling Maduro’s regime. 

• In December, outgoing Secretary of State Antony Blinken did not rule out the possibility of shuttering Chevron’s Venezuelan operations. There is an additional consideration: Venezuela could see an intensification of its exodus if economic conditions further deteriorate.

• Trump’s calculus is identical to Biden’s. He is favorable to the hardliners’ stance, but stricter sanctions could run against his promise of cheaper energy.
  
  

Postscript. Despite the international outcry and overwhelming popular support for the opposition, Maduro retains power. Oil revenues, along with the regime’s involvement in transnational crime, have endowed him with the financial firepower to keep the military high command under his control. The opposition is stronger and more unified than ever, but its task is Sisyphean. 

• The opposition believes it is in a far better position than in 2019, when it used its control of the National Assembly to declare Juan Guaidó acting president. Guaidó would ineffectually claim the presidency for the next four years.

• Maduro, however, controls the entire state apparatus, although there are signs of his hold over the lower echelons fraying. 

• The regime is not at immediate risk, but regime collapses tend to be sudden, unexpected affairs.