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What Does Trump Mean for Central America?

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM). Starting this week, GCaM will be published on Saturdays in recognition of its status as a weekend read.

In this issue, you will find:

Títulos en este boletín

What Does Trump Mean for Central America?

The Demographic Trends Behind Trump’s Victory


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The GCaM Team

Learn more at sgennari@republica.gt

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What Does Trump Mean for Central America?
867 words | 4 minutes reading time


Donald Trump clinched a landslide victory over Democratic nominee and outgoing Democratic Vice President Kamala Harris, going as far as to carry every swing state and win the popular vote. The Republican Party earned a comfortable Senate majority, and projections indicate they will retain control of the House of Representatives. In sum, Republicans rode Trump’s coattails to a federal trifecta.

  • While polls suggested a closer race, it must be admitted that the result mostly falls within polls’ margin of error, although they largely failed to identify a vast, nationwide pro-Trump shift, even in solidly blue states. In any case, Trump now has a clear mandate to implement his platform, centered around immigration control, protectionism, and “government efficiency” reform.

  • The president-elect’s more controversial policies, like his promise of an executive order to end birthright citizenship for the children of undocumented immigrants, will likely be questioned in the courts. The Supreme Court’s 6-3 conservative majority is likely to prove useful in this regard. 

  • Indeed, the Court’s conservative majority may even grow, with Trump nominating conservative successors to Justices Clarence Thomas and Samuel Alito, now 76 and 74, respectively. This does not, however, mean that conservative justices will serve as a mere rubber stamp for Trump.

Immigration. Trump has repeatedly promised the “largest deportation operation in American history.” There is no reason to underestimate his drive and not take his promise at face value: Trump will restrict immigration and ramp up deportations, for he believes mass immigration lowers cultural cohesion, increases crime, and saturates the labor market, thereby suppressing wages. 

  • This will be troublesome for Mexico, which received $66.24 billion in remittances in 2023, but it will particularly hurt Central American nations, which have come to rely on consistent year-on-year increases in remittance flows. 

  • Nearly 3.2 million Guatemalans reside in the United States. Last year alone, remittances totaled USD 19.98 billion, representing approximately 19.6% of Guatemala’s GDP. For Nicaragua, Honduras, and El Salvador, remittances make up 26.8%, 25.7%, and 24.1% of GDP, respectively.

  • In an extreme scenario, perhaps caused by Latin American nations’ noncompliance on immigration, Trump could consider taxing remittances or imposing other restrictions on them. Last year, Vice President-elect J.D. Vance, presented a bill setting a 10% “fee” on remittances, with the proceeds going towards a new Border Enforcement Trust Fund. Under the bill, U.S. citizens, but not undocumented aliens, would receive a tax credit for any fees paid.

Trade. The United States is Central America’s main trading partner. In 2023, U.S.-Guatemala bilateral trade was worth $14.55 billion, with the United States buying 32% of Guatemalan exports and selling 33% of Guatemalan imports. The figures are starker for Mexico, perhaps the country that stands to lose the most under a second Trump presidency; indeed, around 80% of Mexican exports are U.S.-bound.

  • Trump’s decisively protectionist inclinations are unlikely to translate into significant disadvantages for Central America, given the essentially agro-industrial and textile nature of the region’s U.S.-bound exports.

  • The risk could lie in the possibility of implementing a universal tariff of 10% to 20% on all imports, something that Trump has mentioned on several occasions. Such campaign talk, however, likely only sets the stage for negotiations with important trading partners like China, Mexico, and the European Union.

  • Trump is also likely to have mixed effects on nearshoring efforts in Latin America. He evidently prefers reshoring to friendshoring, and looks askance at Chinese efforts to use countries like Mexico as intermediaries to gain tariff-advantaged access to the U.S. market.

China. Trump’s aggressive approach towards China could intensify the dispute for commercial and political influence in Latin America, possibly resulting in more favorable negotiating conditions for countries like Guatemala and El Salvador.

  • In Washington, there is growing concern regarding Chinese firms’ contracts to operate vital ports, their participation in infrastructure programs, and the expansion of Chinese technology giants in Latin America’s digital infrastructure. 

  • In this context, the resurgence of the Monroe Doctrine under Trump—a phenomenon observed during his first term—could evolve into a more equitable partnership, based on shared economic interests and national security concerns. This would require Latin American, particularly Mexican, compliance on the immigration front.

  • Guatemala has few bargaining chips; its principled defense of Taiwan keeps it from appealing to Beijing. El Salvador is better positioned to negotiate on favorable terms, while Honduras and Nicaragua, whose leftist governments’ relations with Washington are strained, stand to suffer. Costa Rica’s semiconductor industry is unlikely to be targeted by Trump. Panama will benefit from growing domestic skepticism of immigration, which facilitates cooperation with the United States.

Balance. A few months ago, J.D. Vance said a Republican administration would seek a “less moralizing” foreign policy to counter Chinese policy. This bodes well for Latin America, whose leaders find Chinese funding tantalizing and often lament the lack of similar large-scale U.S. initatives.

  • Unlike the Biden administration, everything indicates Trump’s foreign policy priorities do not include an “anti-corruption agenda.” This is a further implication of Trump’s eminently practical foreign policy, which prioritizes interests over values.

  • At the same time, the removal of existing sanctions, especially visa revocations, is uncertain. Actions against individuals and organizations involved in the drug trade are likely to see a pronounced increase.

  • U.S. Treasury sanctions, especially those issued pursuant to the Global Magnitsky Act, are unlikely to be overturned. In many cases, these are national security, and not partisan, decisions.

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PRESS REVIEW

What We’re Watching

What’s at Stake for Mexico in a Second Trump Presidency? [link]

Simón Romero and Emiliano Rodríguez Mega, The New York Times

Donald Trump’s return to the White House undoubtedly poses risks for Mexico. The United States is the market for around 80% of Mexican exports, as well as the source of the vast majority of Mexico’s $66.24 billion in remittances. Against all odds, Trump achieved a productive working relationship with former Mexican President Andrés Manuel López Obrador; under a gentleman’s agreement, effectively left untouched by the Biden administration, Mexico would agree to limit migrants trekking north from Central and South America (and beyond), in exchange for little U.S. interference in its domestic affairs. It remains to be seen whether Claudia Sheinbaum, Mexico’s newly sworn-in president, is able to maintain similar levels of rapport. In any case, Trump’s objectives are simple, if expansive: immigration control; a more muscular Mexican security policy; and a renegotiation of trade terms, particularly those that allow Chinese firms to use Mexico as a middleman on account of its privileged access to the U.S. market. 

Haitian activists demand halt to deportations as gang violence and poverty soar [link]

Evens Sanon, Associated Press

In recent months, the Dominican Republic has dramatically increased its deportations of Haitian migrants, with more than 61,000 being repatriated in the past month. Dominican President Luis Abinader insists his country will continue deporting around 10,000 migrants per week. This is seen as a direct response to the rampant gang violence and chronic poverty that plague Haiti, where gangs control 85% of the capital, Port-au-Prince. The international community has criticized the Dominican position, but Santo Domingo insists that it is well within its rights. Trump’s victory will likely serve to partially alleviate international pressure on the Dominican government.

Bolivia’s Turmoil May Lead to a Political Shift [link]

Raúl Peñaranda, Americas Quarterly

The power struggle between President Luis Arce and former President Evo Morales within the Movement Towards Socialism (MAS) has triggered a deep political crisis in Bolivia. Morales, whose leadership has been undermined since his departure from office in 2019, has attempted to regain control of the party and return to power in 2025, but his influence has waned. He remains barred from running for office next year. Last month, his supporters organized vast protests and roadblocks. Internal squabbles within the ruling party are likely to strengthen the opposition, particularly in light of Bolivia’s pronounced economic crisis. Indeed, dollar scarcity, part of a larger economic crisis, has triggered fuel shortages.

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The Demographic Trends Behind Trump’s Victory
612 words | 3 minutes reading time


In the wake of the 2020 election, Donald Trump was widely seen as a passé, politically defeated figure. His comeback obscures this fact, but it must be recalled that outgoing President Joe Biden’s victory sank the Republicans into a morose state, with few anticipating such a striking reversal of fortunes scarcely four years later.

  • Much ink has been spilled on the issues that most favored Trump: economist discontent and opposition to mass immigration. The Democratic campaign insisted the economy was chugging along, while the border crisis was close to being resolved. The electorate does not appear to have found these arguments convincing.

  • Much ink, admittedly, has also been spilled on Trump’s “weak link”: abortion, a political threat the president-elect has repeatedly tried to defuse, albeit to no avail. 

  • In light of his victory and the failure of ballot initiatives in several states, it is now clear that abortion remains a sensitive, but not catastrophic, topic for Republicans.

Minorities. To examine the reasons behind Trump’s landslide, one must examine exit polls, which although imprecise, provide a general picture of shifts in the electorate. NBC’s exit polls suggest that on this occasion, 45% of Hispanic voters—54% in the case of Hispanic men—voted for Trump. In 2020, the Republicans’ annus horribilis, Trump a mere 39% of Hispanics sided with Trump; even so, this figure was regarded as one of the election’s few saving graces.

  • This trend is confirmed by local analysis: Trump carried Miami-Dade, a 68.8% Hispanic county, by 11%. Republicans had not won there since the election of George H. W. Bush in 1988.

  • Upon consulting 2016 figures, it quickly becomes apparent that some Hispanic-dominated Texas counties have recorded pro-Trump shifts of over 70% in the last eight years. Pro-Trump shifts among Hispanics in blue states are also evident, although less pronounced.

  • Similar dynamics can be seen in the black vote: 21% of black men voted for Trump; in 2016, only 8% to 10% did so. Overall, 85% of black voters sided with the Democrats; in 2020, 92% of these voters opted in favor of Joe Biden.

Between the Lines. To be sure, Trump’s movement has retained its general contours, with increased minority support strengthening the bulk of Trump’s base, still overwhelmingly made up of middle-class white voters, especially those without a university degree. 

  • Trump has always commanded comfortable majorities among white voters without college degrees. In 2020, however, Biden managed to convince a majority of white, college-educated voters, carrying around 56% of them. This year, these voters shifted towards Trump, with only 53% voting for Harris.

  • Local analysis is once again illustrative: Trump received 55% of the vote in New York’s Suffolk County. Suffolk, with an 85.2% white population (2020) and an annual median household income of $122,498 (2022), showcases trends among white, college-educated voters.

  • In 2020, Trump carried the county by a mere 0.03%, obtaining 49.3% to Biden’s 49.27%. Needless to say, this year’s improvement is substantial.

Regional Echoes. President-elect Trump did not run a moderate campaign. Nonetheless, Hispanic voters, particularly Hispanic men, found him sufficiently persuasive. Bush-era fears of immigration skepticism scaring Hispanic voters away appear to have been misplaced.

  • Latin American nations, it seems, cannot rely on Hispanic voters as resolute lobbyists. These voters’ cultural background may distinguish them from the rest of the U.S. electorate, but when it comes to voting patterns, their gradual assimilation is patently evident.

  • Latin America—particularly Central America—must be aware that a crucial plank of its development model, based on remittances’ perennial and uninterrupted growth, is now in danger.

  • If Trump were to implement only half of what he has promised, there would be a large drop in the number of immigrants, as well as a deportation wave of historic proportions. This would, by extension, negatively affect remittances.