Nearshore Americas
US Presidential Elections

U.S. Presidential Election: Big Implications for the Nearshore Region

The U.S. presidential election is imminent, and the results on November 5th could have a significant impact on the geopolitical landscape. Latin America and the Caribbean may seek to strengthen economic ties with the United States due to shared interests or political pressure. Whether it’s because Harris wins and retains some of the policies implemented by Biden over the last four years, or Trump returns with his protectionist policies.

What will be key after the elections is the tone for the next four years, as two radically opposed styles will determine whether relations between Latin America and the Caribbean and the U.S. will be strengthened or cooled. If Harris wins, social policies including labor and environmental rights will be part of the discussion. But if Trump wins, everything will be defined by the geopolitical and diplomatic strategies he used during his last term.

“The outcome of the US presidential elections will undoubtedly play a critical role and could potentially reshape trade relations in Latin America and the Caribbean. The connection between nearshoring, outsourcing, and US trade policies underscores the importance of these developments. If the US shifts towards a more isolationist trade policy or reevaluates existing agreements, the effects could extend beyond its borders. This may provide China with an opportunity to strengthen its ties in the region, especially with countries already closely aligned with it, such as Brazil and Argentina, potentially leading to geopolitical shifts,” said Bryan Ch. Campbell, Mexico City-based market intelligence and political risk consultant.

The strengthening of trade relations is a strategic priority for the U.S. government under the Harris administration. It will help reduce dependence on China and open the way for greater investment in manufacturing and technology hubs in the region. 

In contrast, if Trump is elected, he will probably leverage trade relations as a means of pressure to ideologically align Latin American governments. This approach would likely lead to further estrangement from governments such as Colombia with its president Gustavo Petro or Brazil with Luiz Inácio Lula da Silva.

For Sergio Guzmán, Political Risk Analyst and Colombia Risk Analysis Director, “Donald Trump and Gustavo Petro would be absolutely combustible together,” while a relationship between Kamala Harris and Gustavo Petro “would be based much more on shared values and interests.” 

Strategic ambiguity

In the current geopolitical landscape, some countries, like Mexico, Colombia, Chile and Brazil, have adopted a strategy known as “deliberate ambiguity.” This approach involves maintaining a country’s official position on a critical issue in a deliberately vague manner. This allows them to avoid making definitive decisions or fully revealing their intentions, which enables them to adapt to different circumstances or respond in a more calculated way to various situations.

In its diplomatic relations with the United States, for instance, Colombia has adopted this strategy by “de-anchoring its relationship with the United States and maintaining neutral relations with some of the United States’ main adversaries globally,” according to Guzman.  

This strategic ambiguity allows countries in the region to align themselves either commercially or politically with countries such as the BRICS (Brazil, Russia, India, China, South Africa, along with their new allies). 

China’s role in Latin America

The geopolitical dynamics between China and the US are a significant factor influencing the trade relations with Latin America. 

On March 12, General Laura Richardson, head of the U.S. Southern Command, informed to the House Armed Services Committee that China “is exploiting a fragile security environment and taking advantage of the region’s need for economic investment to gain influence and advance its malign agenda.”

Mexico, for instance, is a significant player in this context. By establishing operations in Mexico, Chinese companies can bypass tariffs imposed on direct imports from China to the U.S., making it economically viable to set up call centers and BPO services that cater to American clients. This strategic positioning allows them to access the lucrative North American market while mitigating the risks associated with geopolitical tensions.

The relationship between China, Mexico, and the USA is defined by the USMCA, which was established in 2020 and is scheduled for renegotiation in 2026. According to  Campbell, “with a USMCA renegotiation, there is anticipation that stricter regulations may be implemented to reduce China’s influence on US-Mexico trade dynamics.” 

Strong bonds

Trade ties between the United States and Latin America remain strong, and this is not likely to change in the near future. As Susan Segal, Americas Society and Council of the Americas (AS/COA) CEO explains,The human resource pool (both skilled and unskilled) is huge, including an extraordinary and innovative entrepreneurial sector. There is already interest from many Latin American and industry leaders to create technology hubs and service centers in the region.” 

Furthermore, the United States continues to represent the primary market for Latin American and Caribbean exports, and the United States has made it clear that investment in these countries is a priority. What is at stake with the upcoming elections is the tone and geopolitical strategies of Harris and Trump in the region.

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“For Latin American governments and businesses, the way forward requires a delicate balance. Embracing diversification and promoting regional unity while remaining open to partnerships with Europe and Asia could serve as a strong strategy. This approach not only prepares them for potential changes in US policy but also positions them to benefit from the economic advantages of nearshoring, turning today’s challenges into opportunities for tomorrow.” finishes Campbell.

Politics, economics and trade are entering a decisive phase, and under these verticals, millions of people are waiting to see how November’s election will affect their lives.

Juliana Bedoya

Juliana Bedoya is a colombian bilingual journalist and editor. She has worked for several colombian and US media. She currently works from Cartagena, Colombia.

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