Authors: Basco, Ana Inés; Ramírez, Lautaro.
The recent imposition of “reciprocal” tariffs by the Trump administration places the subcontinent before two paths: moving toward greater fragmentation or deepening integration, thereby strengthening its position globally.
The recent imposition of “reciprocal” tariffs by the Trump administration has triggered a wave of uncertainty in Latin America, a region now facing tariff rates ranging from 10% to 38% depending on the country. These measures—described by many analysts as “the biggest shift in global trade since the Cold War,” or even in the last hundred years—threaten to disrupt trade flows, increase import costs, and reduce the competitiveness of these economies, which already face low growth and high dependence on external markets.
In this context, both the World Bank and the IMF have recently lowered their growth forecasts for the region in 2025, with the latter adjusting its projection from 2.5% to 2%. Mexico is expected to be the most affected country, with an estimated growth decline of 0.3%.
Looking at individual countries, Mexico—despite being excluded from the general 10% tariff due to the USMCA (T-MEC)—faces a 25% tariff on goods outside the agreement, affecting approximately 49% of its exports.
Two other countries among the most affected, along with Guyana, are Nicaragua, which has one of the highest tariff rates in the region (18%), and Venezuela, which received a 15% tariff. In both cases, institutional weakness and limited response capacity are likely to amplify negative effects.
Argentina and Brazil both received a 10% tariff. For Brazil, the United States’ third-largest agricultural partner, this poses challenges for products such as orange juice, coffee, beef, and ethanol. Argentina, while maintaining a trade surplus with the United States, may see some of its exports—such as aluminum—affected. Ongoing bilateral discussions open the possibility of agreements that could mitigate or avoid these negative impacts.
However, it is still unclear how and to whom these tariffs will be implemented, so all of this remains based on estimates and projections. What is certain, however, is that these measures once again expose the region’s structural weaknesses: high dependence on commodities, low trade diversification, and political fragmentation.
Faced with this challenging economic and political scenario, what options does Latin America have? The region stands at a crossroads: move toward greater fragmentation, allowing each country to “do what it can” based on its economic weight or privileged relationships, or deepen integration and strengthen its global position.
The first option is clearly more unequal and unjust; the second is more difficult, but not impossible. Achieving it requires combining geoeconomic pragmatism with a long-term vision.
Deepening integration means strengthening existing regional trade agreements such as Mercosur, the Pacific Alliance, SICA (Central American Integration System), and other bilateral and multilateral treaties. These could become key tools to cushion the negative effects of US tariffs. While results have so far been uneven, there is significant potential in strategically reactivating them to harmonize technical standards and facilitate trade by reducing bureaucratic and tariff barriers within the region.
Likewise, advancing integration requires promoting productive and logistical coordination, including shared infrastructure and joint financing for regional projects.
Other proposals in this direction include: signing “mirror agreements” with the EU or ASEAN, granting preferential access to Latin American markets in exchange for investments in infrastructure; adopting a negotiating stance with the United States that seeks tariff exemptions in exchange for commitments on migration security and anti-drug trafficking cooperation, replicating the conditionality model used by Mexico; digitizing customs through blockchain-based platforms that have already proven highly effective in improving efficiency; promoting industrial development policies that add value to exports; and continuing to build investment forums that attract European and Asian capital, while reducing dependence on China in some cases.
The countries of the region therefore have a historic opportunity to turn a challenging global context and regional fragmentation into a catalyst for deeper trade integration.