The Pan-American Trade Wars have begun

Trump's aggressive policy may "Make America United Against the U.S Again"

Politicians in Panama and Colombia, who have been the subject of Trump attacks in recent days, are no doubt watching with grave concern after the U.S. slapped devastating tariffs on its two closest allies in the hemisphere — Canada and Mexico.

Announcing the 25% tariffs on all imported goods from both countries (except energy products from Canada, which will be taxed at 10%), the White House justified the decision by saying “President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”

In the same statement, the White House further claimed that cartels in Mexico “have an intolerable alliance with the government”, suggesting that the economic measures are being implemented as “leverage” with which to force a change in dynamics that Trump has described as “dangerous”.

The tariffs, if sustained, could significantly worsen inflation in the U.S., causing a rise in the price of consumer goods just two weeks into the Trump presidency.

The Trump order also includes a mechanism to escalate import taxes against retaliation by other countries, raising the specter of a severe economic disruption both domestically and throughout the Americas.

U.S. Secretary of State Marco Rubio flew to Panama over the weekend as rhetoric between the two countries has escalated. In some speeches, Trump has insisted that military action is on the table over issues he often rails against regarding the Panama Canal.

In an interview with Político, Panama's former president, Ernesto Pérez Balladares said of the specter of an invasion. “I think there will be many, many casualties on our side,” he said, “and international condemnation of the U.S.”

President Gustavo Petro in Colombia has clashed with the fresh Trump administration as well, briefly threatening to refuse deportation flights, but he backed down when the Trump administration threatened blanket economic sanctions.

Many experts in Latin America, at least so far, believe that in a multipolar world, Trump may have overplayed his hand. Panama and Colombia are already making overtures to Chinese markets. The country has aggressively entered Latin America in recent years via trade deals and investment in, and construction of, infrastructure projects.

In addition, escalation by Trump could also potentially threaten cooperation on migration enforcement, a point of leverage particularly strong in Mexico, which enforces U.S. policy domestically, as well as Colombia and Panama— whose shared border has become the largest land migration route in the Americas.

In the same Politico interview, Balladares suggested that, among other tactics like inviting the Chinese military into the canal, “One of the things that we might do, if, you know, if things become worse, is just open up the gates,” to migrants in the Darien Gap.

In Colombia, Petro seems to also be testing the waters over potential actions. He has demanded that Colombian citizens on U.S. deportation flights be treated humanely, and not be placed in handcuffs. It is a demand that the U.S. has so far ignored, with flights continuing normally.

But Saturday, in an interview with Colombian media, Petro floated the idea of assuming the role of picking them up in Colombian ships. He claimed, once again, that Colombia had paused giving permission for the U.S. flights, but at least 4 have arrived since an argument on Twitter (X), exploded into a diplomatic confrontation between the two countries last week.

Mexican President Claudia Sheinbaum has ordered retaliatory tariffs in response, though she has yet to specify how broad they will be. Mexico is one of the U.S.’s top global trade partners and the largest buyer of U.S. imports in the world.

U.S. food prices, in particular, will likely be hard hit by the Trump tariffs. The United States imported $9.9 billion worth of vegetables and more than $11 billion worth of fruit and frozen juices from Mexico last year.

She also rejected U.S. accusations over alliances between cartels and the Mexican government. “If the United States government and its agencies wanted to address the serious fentanyl consumption in their country,” she wrote in a post on Twitter (X), “they could fight the sale of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”

Canada has also placed retaliatory tariffs on some goods, such as fruits, cotton, and whiskey, and criticized the decision, as Justin Trudeau warned Canadians to “brace for some economic pain.”

Rubio, in Panama, according to officials speaking anonymously to multiple U.S. media orgs, is looking to “de-escalate” growing tension over Trump’s Panama comments, but an errant social media post or public comment from the increasingly aggressive and unpredictable U.S. president could easily derail attempts to do so.

Current Panamanian President José Raúl Mulino has strongly rejected any U.S. claims on the canal in public comments, and sharply criticized the idea that Panama is somehow favoring Chinese interests in the region — a claim he says “is completely without substance.”

Just two weeks in office, and Trump has already inspired a trade war across the Americas, one that could easily spread to other U.S. allies in the region, and push them towards deeper relationships with other actors and countries.

Trump supporters hoped that he could “Make America Great Again”, which remains to be seen. But this new trade war is certainly an important step towards “Making all of America Resist the United States Again.”

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The Big Headlines in LATAM

As part of a deal for El Salvador to secure funding from the IMF, the country passed a series of law reforms that remove the status of BitCoin as legal tender in the country. As part of the changes, BTC will no longer be accepted for all tax payments, nor will merchants be required to accept it.

Bukele has already seemingly abandoned his informal “buy a BitCoin a day” policy. The step back from promises to “implement a global financial revolution,” was also, coincidentally, an interesting backdrop for the arrival of Tether to the country.

Tether is a “stable-coin”, backed by billions of dollars in US-treasury bonds, that is tied to the value of the U.S. dollar. They have chosen El Salvador as their global headquarters, a decision that will likely strengthen defacto US control over crypto markets.

Argentina held a massive “Make Argentina Gay Again” demonstration in Buenos Aires. The anti-fascist pride parade was organized after a diatribe by President Javier Milei against “wokeism” in Davos, in which he equated queer people with child abuse, claiming that femicide put women’s lives over men’s and accusing migrants in Europe of crime.

Our own Amy Booth breaks it all down succinctly at the Buenos Aires Herald.

Trump special envoy Richard Grennell met with Maduro in Caracas, Venezuela, in a high-level diplomatic meeting Friday. He secured the release of five U.S. prisoners and promises that Venezuela will accept deportation flights. In return, Venezuela achieves nothing, which, for Maduro is the best possible scenario.

Maintaining the status quo after fraudulent elections, and avoiding a “Maximum Pressure” campaign, as was the case last time Trump held office, is a victory.

Trump is currently applying more threats and pressure to US allies than he is to Venezuela. Maduro no doubt views that as a victory as well.

Spanish Phrase of the Week

Mierdero - shitshow (kind of)

Mierdero is a noun that refers to a place where there is a lot of shit. It can also be used as an adjective to describe a person who does bad deeds, or to describe a descent into chaos.

Once, when translating a piece, Joshua asked a translation app how to say “shitshow”, and it suggested espectáculo de mierda, “a show of shit”, which, if you said to a Spanish speaker, they would probably realize you were trying to say shitshow. But it sounds clumsily literal and a bit funny.

But one thing we can say for certain this week. Trump’s new Pan-American trade war is a Mierdero.

Thanks as always for reading, piratas! Y hasta pronto!