Narayan AmmachchiAnyone watching Donald Trump’s recent moves toward Latin America can’t miss the pattern. Some of his actions make it seem as if the region is not a collection of sovereign nations but an extension of the U.S. homeland.
That perception sharpened when he linked U.S. financial support for Argentina to the electoral success of President Javier Milei‘s party in the midterms.
“If he wins, we’re staying with him … And if he doesn’t win, we’re gone,” Trump said. The message was unmistakable — Argentineans would face punishment if Milei’s party lost.
And this wasn’t Trump’s first such remark. It likely won’t be the last. After returning to office, he threatened to take back the Panama Canal and even floated the idea of annexing Canada and Greenland.
But for American firms operating across the region, the real shock came when he designated drug cartels as terrorists.
That single decision changed everything. U.S. businesses must now double-check every associate and partner in the region to avoid landing in the crosshairs of the Department of Justice.
For smaller American entrepreneurs — especially SMEs in manufacturing, infrastructure, supply chain, and logistics — this adds a freezing layer of legal uncertainty. The fear of inadvertently violating U.S. anti-terror rules can push them to avoid certain countries entirely.
Javier Palomarez, Founder & CEO of the United States Hispanic Business Council (USHBC), confirmed to Nearshore Americas that such policies are indeed putting supply chains, labor markets, and investor confidence at risk.
“Small and mid-sized businesses with cross border ties are especially vulnerable, as they lack the resources to absorb the shocks of sanctions, policy whiplash, or regional conflict.”
Irina Tsukerman, President of Scarab Rising, Inc., also agrees. “For companies, this means political due diligence becomes as important as commercial due diligence.”
Entrepreneurs from the United States doing business in Colombia, Guatemala, Honduras, and Mexico must now implement significantly stronger compliance frameworks, conduct deeper legal due diligence, and perform thorough ongoing risk assessments—most critically in regions controlled or influenced by cartels and organized crime groups.
“Having a political consultant and lobbying firms will become more and more necessary (at this point of time),” says Mexico City–based attorney Ilan Katz.
He warns that even an “accidental” contact with criminal actors could trap companies in long, costly legal fights in U.S. courts.
Cognizant’s Case is an Example
Many analysts point to the risk through the lens of the Foreign Corrupt Practices Act (FCPA).
On April 2, 2025, former Cognizant executives Gordon Coburn and Steven Schwartz finally breathed easy when the DOJ dismissed its FCPA case against them.
The case was tangled in allegations that they approved a bribe to accelerate construction of a Cognizant campus in India — charges both men denied since 2019. They were cleared, but the company still spent heavily fighting the case.
For smaller firms, such battles are financially draining — sometimes existential.
Palomarez said such policies are counterproductive to both the US and Latin America.
President Trump, according to Palomarez, need to know that ‘the world has changed.’
“Latin America is no longer a passive sphere, it’s a set of dynamic economies, vital trade partners, and growing innovation hubs.”
“The current strategy might deliver short term wins, but long term success is unlikely without deeper cooperation and regional trust. You can’t contain migration or dismantle criminal networks through pressure alone.”
“When policy leans too heavily on military force or economic punishment, without offering investment or institutional support, it often creates more instability than it solves. Real progress demands sustained engagement, not just enforcement.”
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