In contrast to the EU and China, Latin American countries have held off issuing retaliatory tariffs on the US. But governments are worried about the impact of duties on several of the region’s key sectors.
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Shutterstock.com/Rokas Tenys
Many US tariffs apply to goods from Latin American countries. On 2 April 2025, US President Donald Trump announced “reciprocal” tariffs, hitting the majority of Latin American countries with 10% duties. These take effect on 5 April 2025.
But some of the region’s countries were not so lucky and were classed as the “worst offenders.” Venezuela faces 15% tariffs, Nicaraguan goods carry an 18% levy, and the Falkland Islands top out at 42% on all goods effective 9 April 2025. Trump also extended indefinitely the 25% tariff on Mexican products that are not covered by the US-Canada-Mexico Agreement (USMCA).
These “reciprocal” tariffs are the baseline for most goods imported into the US. Some products are subject to higher levies, and Trump carved out certain products that are already – or may soon be – subject to US tariffs.
The reciprocal tariff executive order exempts automotive and auto parts tariffs at 25%, for example. Those duties took effect on 3 April 2025. Other exempted products affecting Latin American countries include lumber, certain minerals, and energy products.
US steel and aluminium tariffs came into force on 12 March 2025, affecting US$6 billion worth of Brazilian exports. And, US tariffs of 25% apply to Venezuelan oil from 2 April 2025.
Whilst the EU and China (simplified Chinese language only) have revealed countermeasures in response to Trump’s trade war, Latin American nations have yet to fight back, although Brazil and Mexico – the region’s two largest economies – are poised to react with tariffs.
How is Latin America responding to US tariffs?
While Mexico plans to build bridges, Brazil is busy building tariff walls amid the region’s trade tango with the US.
Mexican President Claudia Sheinbaum has adopted a cool-headed approach to Trump’s chaotic tariff policy. After announcements of tariffs on vehicles and automotive parts and steel and aluminium, Sheinbaum adopted a wait-and-see strategy.
Following “Liberation Day,” Sheinbaum celebrated the preferential treatment (Spanish language only) shown by Trump towards his southern neighbours. The 25% tariff does not apply to goods covered by the USMCA, including agriculture, electronic manufacturing, chemicals, medical devices, and machinery.
Brazil’s approach has been markedly similar to Mexico, but with a focus on negotiation over reaction. Finance Minister Fernando Haddad called the steel and aluminium tariffs “unjustifiable,” whilst indicating keenness to negotiate.
But Brazil is paving the way for tariffs. On 3 April 2025, the Brazilian congress approved the “Reciprocity Bill”, which would authorise tariff countermeasures against the US. According to a statement from Brazil’s Foreign Ministry, the US tariffs violate World Trade Organization (WTO) commitments, and the government is evaluating all possible actions to ensure reciprocity in bilateral trade (Portuguese language only), including appealing to the WTO.
Trump threatened to impose tariffs on Colombia within his first week in office. Colombia, like much of Latin America, faces a 10% baseline tariff on all imports into the US. President Gustavo Petro described Trump’s reciprocal tariffs as a big mistake (Spanish language only) and hinted that Latin American businesses could benefit from the aggressive US policy, as the region has been encouraged to diversify the destinations of its products (Spanish language only).
China is currently Colombia’s second largest trading partner, after the US, with bilateral trade between the two reaching US$21 billion in 2024. That number is set to grow after Colombia’s announced a new shipping route between the two countries (Spanish language only) on 6 February 2025.
Argentine President Javier Milei is considered one of Trump’s close allies and was one of only a few sitting heads of state at the US president’s 2025 inauguration. Milei had plans to make Argentina the first country to join a reciprocity agreement with the Trump administration, but these plans disintegrated on 2 April 2025 when Trump hit Argentina with a 10% baseline tariff, despite meetings between the two nations a day prior. Nevertheless, Milei has branded the 10% duty as a victory and took to social media to thank Trump.
On the other side of the Andes, Chile is concerned. President Gabriel Boric ordered ministries to form working groups to examine the potential impact of the tariffs on its copper and agriculture exports. Boric is looking for “alternatives,” indicating that he will look for different trading partners if US tariffs negatively impact Chilean commerce.
Impact on businesses
The majority of Colombians, Chileans, and Mexicans are concerned by tariff hikes, according to a survey conducted by AtlasIntel for Bloomberg News. They have cause for concern: key sectors of Latin America’s economy are targeted by the US tariffs.
Mexico is the largest source of US light vehicle imports, surpassing Canada, Japan, South Korea, and Europe. In 2024, Mexico built four million cars, and shipped 2.5 million of them, representing more than 60%, to the US. To limit the impact of Trump’s tariffs, the three largest US automakers Stellantis, Ford, and General Motors negotiated that USMCA-compliant cars and parts would be exempt from the 25% duty. However, questions loom over the future of the USMCA as the first review approaches in just over a year.
But other Latin American nations’ automotive exports face tariffs. Brazil exported US$1.37 billion worth of auto parts to the US and is home to factories of US manufacturers including Stellantis and General Motors.
Trump has also shaken Brazil’s steel industry with 25% levies on imports to the US, which came as a surprise to the Brazilian steelmakers trade association, Aco Brazil. Latin America’s largest economy shipped 3.4 million tonnes of steel to the US in 2024, worth US$5.7 billion for the Brazilian economy. The steel sector employs 121,000 Brazilians.
Currently, copper imports into the US were spared in Trump’s reciprocal tariffs, but that’s expected to change. On 25 February 2025, Trump ordered an investigation into “the effects on national security of imports of copper.” Tariffs on copper goods are now expected before the end of that 270-day investigation. Several countries in Latin America have substantial copper industries. In 2024, Chile exported US$6.2 billion worth of copper and Peru shipped US$1 billion worth of copper to the US.
Latin America is highly dependent on the US as its main trading partner for agricultural products. In 2023, 92% of Mexican agricultural exports went to the US, 58% of agricultural goods from the Dominican Republic, 43% from Nicaragua, and 40% from Colombia. China is expected to boost imports from Latin America to circumvent US tariffs.