Bottom lines up front

• US temporary protected status for Haiti is set to expire, and Haiti’s governing Transitional Presidential Council will soon reach the end of its mandate.
• The combined result could result in more dysfunction in Haiti and an increase in emigration to the wider region.
• The Trump administration, which has prioritized security in the Western Hemisphere, has options among existing programs to help create a safer, more stable Haiti.

WASHINGTON—Two deadlines in the first week of February—the end of US temporary protected status (TPS) for Haiti and the expiration of the mandate for Haiti’s Transitional Presidential Council (TPC)—threaten to intersect in ways that could further destabilize Haiti and the broader region. 

Since the assassination of President Jovenel Moïse in July 2021, Haiti has found itself mired in turmoil. The government is largely nonfunctional, the economy is effectively paralyzed, basic services are collapsing, and gangs now control nearly 90 percent of the capital, Port-au-Prince. More than 1.4 million people are internally displaced, according to the United Nations International Organization for Migration, while close to two million are facing acute food insecurity. The result, United Nations (UN) Secretary-General António Guterres warned the Security Council this past August, is “a perfect storm of suffering.”

Haiti’s slow decline isn’t occurring in isolation. For the United States, a top destination for Haitians, the country’s continued deterioration is not a distant tragedy but a policy challenge with profound consequences. For the Trump administration, which has reasserted the importance of the Western Hemisphere in its strategy documents and actions, this is an opportunity to continue those efforts. To prevent Haiti’s further collapse, the Trump administration should focus on leveraging pre-existing, common-sense policies to stabilize the country in the short term and build state capacity to lay the groundwork for its longer-term recovery. The result would be a safer, more stable Haiti—and a safer, more secure Western Hemisphere. 

TPS expires . . .

The primary US policy tool—and the more immediate deadline—is TPS, a bipartisan humanitarian protection program that allows migrants from countries deemed unsafe to live and work in the United States for a temporary but extendable period. Haiti was first designated for TPS just days after a catastrophic earthquake struck the country in January 2010, and it has since remained eligible amid worsening political and security crises. As of March 2025, 330,735 Haitian nationals living in the United States had TPS, according to US Citizenship and Immigration Services. The US-based diaspora sends billions of dollars home each year in remittances, an economic lifeline for Haitians facing economic deprivation. 

Barring further extensions, which are not expected at this point, TPS for Haiti is set to expire on February 3. After that date, Haitians in the United States will need to have another lawful status to remain in the country or risk deportation, even though crisis conditions persist in Haiti. 

. . . and so does the TPC’s mandate

Just days after TPS ends, Haiti faces an internal deadline that reveals another layer of dysfunction: governance. 

This year marks the country’s fifth without a president, its tenth without holding presidential elections, and its third without a single democratically elected official in power. On February 7, the TPC—the nine-member interim body currently running the Haitian government—will reach the end of its mandate.

Since 2024, the TPC’s principal duty has been to create the conditions needed to hold free and fair elections by the time their term expired. Despite undertaking several notable efforts, the TPC stated that the country’s unfettered security situation rendered elections “materially impossible” by the February deadline. The first round of elections is now set for August 2026, though experts warn the timeline will be difficult to meet absent meaningful security gains. 

As the clock winds down on the TPC’s mandate, some members have launched a last-ditch effort to remove the sitting prime minister, Alix Didier Fils-Aimé. Appointed by the TPC and viewed as Washington’s preferred pick to run the government after February 7, Fils-Aimé has become the target of members’ efforts to maintain influence beyond the transition window. In response, US Secretary of State Marco Rubio called Fils-Aimé to offer support and restricted the visas of multiple members of the TPC. 

There is little consensus on what will replace the TPC when its term inevitably ends. Will there be a power vacuum, and if so, will gangs fill it? Fils-Aimé has ruled out negotiations with powerful gangs regarding Haiti’s political future. This lack of clarity risks undermining legitimacy and further weakening the state’s capacity to combat the security crisis.

Consequences of these looming deadlines

While the expiration of both TPS and Haiti’s interim government in the same week is coincidental, the possible consequences of each could exacerbate Haiti’s internal crisis and expand the risks it poses to regional security. 

In this context, the Trump administration’s decision not to renew TPS for Haiti risks accelerating the country’s decline and backfiring by fueling additional migration. In the absence of a stable government in place to manage returns, large-scale deportations to an already fragile country—even though the Department of Homeland Security (DHS) has deemed it “safe” enough for return—could deepen internal displacement and drive more irregular migration, including to the Dominican Republic and the United States. 

Early signs of this strain are already visible on the ground. With Toussaint Louverture Airport in Port-au-Prince closed for more than a year due to gang violence, US deportation flights have arrived in Cap-Haitien, a comparatively stable northern city already strained by internal displacement and limited municipal services. Cap-Haitien is also home to Haiti’s vital textile sector, which the US Congress recently voted to continue supporting through reauthorization of the HOPE and HELP Acts. Any large-scale increase in deportations could further overwhelm local capacity, risking the destabilization of one of the country’s most stable regions. 

And the repercussions of these deadlines would extend beyond increased migration. According to the Organized Crime Index, Haiti’s porous borders and weak enforcement mechanisms have enabled transnational criminal networks to thrive, engaging in drug and weapons smuggling that is likely to continue. As of May 2025, two Haitian gangs—the powerful Viv Ansanm coalition and the Gran Grif gang—have been designated as foreign terrorist organizations by the US government, underscoring the security threat that they pose. 

What Washington can do

Haiti’s overlapping crises are multi-pronged and deeply rooted, and no single policy measure will remedy years of state collapse. Amid renewed discussions of the Monroe Doctrine, past US involvement in Haiti—from the 1915 occupation to later interventions in the 1990s and 2000s—can rightly be critiqued for contributing to the erosion of Haitian institutions. Despite these challenges, it remains in the United States’ best interest to help restore a measure of stability in Haiti. 

Redesignating Haiti for TPS would help advance the administration’s broader goal of ensuring the Western Hemisphere “remains reasonably stable and well-governed enough” to prevent mass migration to US borders. Extending TPS would provide humanitarian protection and create economic opportunity for Haitians while also giving Haitian authorities time to rebuild governing capacity after the TPC’s mandate expires. However, the Trump administration is unlikely to pursue this option. 

But the administration has options to improve state capacity beyond immigration policy.

One is the UN-authorized Gang Suppression Force (GSF), which has received US support in its aim to both suppress violence and pave the path for eventual elections. Although intended to improve previous models, critics warn that the GSF, which is expected to reach full strength by summer, is still unlikely to produce meaningful results. 

The GSF illustrates a long-recurring pattern in Haiti policy, in which external actors construct parallel structures separate from Haitian institutions to address short-term challenges, only to leave little to no state capacity once funding or political support inevitably dissipates. Rather than repeating this pattern, a comprehensive vision for US-backed security policy should explicitly prioritize training and supporting Haitian forces—whether that be the Haitian National Police or a revitalized national military—so that security gains can endure long after international forces depart. 

The same logic should guide US thinking on a democratic transition. While holding elections is politically necessary and could help re-establish the rule of law, conditions on the ground mean a vote is currently infeasible and could result in a worse outcome than the status quo. 

To ensure elections are the result of stability rather than a substitute for it, the United States should prioritize institution-building approaches such as the Global Fragility Act (GFA), which was signed into law by US President Donald Trump in 2019 and implemented under the Biden administration. Although the GFA has since lapsed (and Haiti is no longer listed as a target country), a similar whole-of-government approach would align US diplomatic, security, and development tools around bolstering Haiti’s resilient civil society and the preliminary work done by the TPC. The framework for this involvement already provides a clear roadmap—now it is up to lawmakers and policymakers to follow it.

Critics of US involvement in Haiti often argue that the country is beyond repair. Yet, if the United States wants to send Haitian temporary residents home and build a more prosperous Western Hemisphere, it should support positive change rather than compound Haiti’s crises.

The United States may not be able to deliver immediate prosperity in Haiti, but promoting stability through coordinated action that strengthens Haitian state capacity is firmly in the US strategic interest. 

The post Haiti’s week ahead is the next test for Trump’s Western Hemisphere focus appeared first on Atlantic Council.

Bottom lines up front

• Venezuela’s post-Maduro economic reopening will require massive reconstruction, especially in energy and infrastructure.
• Colombia is well positioned to help with this due to its proximity and existing trade links, though political tensions and border insecurity pose risks.
• With the right safeguards in place, increased US coordination with Colombia can lower barriers to private investment in Venezuela’s reconstruction, benefiting the wider region.

WASHINGTON—The recent arrest of Nicolás Maduro following a US-led operation has created a fundamentally new geopolitical scenario in Latin America. Beyond its political symbolism, the event may mark the beginning of a structural reconfiguration of Venezuela’s economy, particularly its energy sector, which has historically been the backbone of the country’s productive capacity and external revenues.

After years of production collapse, underinvestment, infrastructure degradation, and international sanctions, any meaningful economic opening in Venezuela would require a large-scale reconstruction effort. This would encompass not only oil fields, refineries, and export infrastructure, but also electricity, transportation, logistics, and basic public services. The magnitude and complexity of this task suggest that the United States, while central to any reconstruction framework, will need reliable regional partners with operational experience, market knowledge, and logistical proximity.

The role Colombia can play

Within this context, Venezuela’s neighbor Colombia emerges as a potentially critical partner, despite recent diplomatic frictions between Washington and Colombian President Gustavo Petro. Colombia’s relevance is grounded less in political alignment and more in structural and economic factors that make it uniquely positioned to support a Venezuelan recovery process. A recent example is the unexpected call between Petro and US President Donald Trump, which official readouts described as constructive. The conversation reportedly paved the way for an official visit by the Colombian president to the White House on February 3, with Venezuela’s economic recovery and cross-border security coordination among the issues slated for discussion.

First, Colombia has functioned for years as a regional operational hub for US and multinational firms with historical exposure to Venezuela. Following Venezuela’s economic collapse, many of these companies relocated personnel, assets, and regional headquarters to Colombia, maintaining limited but continuous engagement with Venezuelan markets. In a scenario of gradual liberalization, Colombia could serve as a low-risk platform for re-entry.

Second, geographic proximity and existing transport links give Colombia a natural logistical advantage. These connections significantly reduce transaction costs for the movement of raw materials, machinery, equipment, and technical personnel required for reconstruction efforts, positioning Colombia as a gateway economy rather than a direct competitor.

Third, Colombia’s productive structure complements US industrial capabilities. Its intermediate manufacturing base and professional services sector, spanning food processing, chemicals, textiles, electrical equipment, engineering, and logistics, could integrate into binational or trinational value chains supporting Venezuela’s recovery.

Fourth, Colombia’s long-standing Free Trade Agreement with the United States provides a stable regulatory framework for US firms operating from Colombian territory. This legal certainty reduces investment risk and facilitates the structuring of supply chains linked to Venezuelan projects.

Recent trends in Colombia–Venezuela trade reinforce this potential. Despite political volatility, bilateral commerce has rebounded, with Colombian exports reaching almost one billion dollars in 2024, led by food products and manufactured goods. This recovery suggests that commercial channels can expand rapidly if political and security conditions improve.

Constraints and risks ahead

Despite these advantages, Washington faces legitimate concerns regarding Colombia’s reliability as a strategic partner. The Petro administration’s foreign policy signals, domestic political dynamics, and perceived ideological proximity to certain Venezuelan actors introduce uncertainty into long-term planning.

More critically, border security remains a binding constraint. The Colombia–Venezuela border has long been characterized by weak state presence and the activity of nonstate armed actors, including the National Liberation Army (ELN), Revolutionary Armed Forces of Colombia (FARC) dissident groups, and criminal organizations involved in narcotics trafficking and smuggling. Without credible improvements in territorial control, any reconstruction strategy involving Colombia would face elevated operational and reputational risks.

From a US policy perspective, meaningful Colombian participation would likely require demonstrable progress in border governance. This includes expanded military and law enforcement presence, improved intelligence-sharing, and the deployment of advanced surveillance and cybersecurity capabilities, potentially supported by US assistance. Enhanced maritime control could further strengthen confidence among private investors, as well.

What’s in it for Washington

If these constraints are addressed, then closer US–Colombia coordination could yield substantial strategic benefits:

• It would lower barriers to private investment in Venezuelan reconstruction, enabling US and Colombian firms to participate in energy rehabilitation, infrastructure development, logistics services, and light manufacturing.
• It would expand US exports to northern South America, particularly in high-value sectors such as pharmaceuticals, technology, agribusiness, and professional services, reinforcing US economic influence in the region.
• It would facilitate the reactivation of regional value chains that historically linked Venezuela, Colombia, and the Caribbean, enhancing overall regional productivity and resilience.

Venezuela’s reopening represents one of the most consequential opportunities in Latin America in decades. Realizing this opportunity will require not only political change in Caracas, but also a coordinated regional strategy anchored in security, institutional credibility, and economic integration.

Colombia can serve as a pivotal intermediary in this process, not as a substitute for US leadership, but as a regional platform that reduces costs, mitigates risk, and accelerates implementation. For US policymakers, the central question is not whether Colombia should play this role, but under what conditions and with what safeguards. Clear benchmarks on security and governance will be essential to transforming potential alignment into a durable strategic partnership.

The post To boost Venezuela’s economic recovery, the US should lean into Colombia appeared first on Atlantic Council.

Bottom lines up front

• No fewer than five important leadership positions in Guatemala—ranging from the courts to higher education—could get new leaders in 2026.
• These institutions form the country’s most important line of defense against cartels and organized crime.
• To safeguard US interests in the region, Washington should support an appointment process that reinforces Guatemala’s rule of law.

WASHINGTON—This year, Guatemala will undergo the most consequential institutional reset since its return to democracy in 1986. Five bodies that determine who gets prosecuted, who gets protected, who gets elected, and, ultimately, who governs the country will be renewed within a tight five-month window.

The attorney general, the Constitutional Court, the Supreme Electoral Tribunal, the comptroller general, and the rector of the University of San Carlos (USAC) all come up for selection between February and August 2026—a timing so unusual that analysts have described it as a “planetary alignment.”

Most of the posts are selected by nominating commissions composed of delegates from universities, the Bar Association, and other sectoral representatives that send shortlists to Congress or the president. Others are chosen directly by the legislature or the executive. Although intended to promote merit-based selection, the system is highly vulnerable to manipulation: Its complex composition and the influence of already captured institutions leave commissions susceptible to intimidation, vote-buying, and procedural maneuvers.

This year’s appointments process is not a mere exercise in bureaucratic housekeeping, nor is it an ideological contest between left and right. These institutions form Guatemala’s most important line of defense against cartels and organized crime, help safeguard the rule of law, and ensure fair competition. With illicit interests already moving to influence the process, this is a battle over whether Guatemala’s institutions will serve the public and the wider region or remain instruments of criminal groups for the next decade.

This past weekend underscored just how high those stakes are. On January 18, Guatemalan President Bernardo Arévalo declared a thirty-day “state of siege” after suspected gang members killed seven police officers in Guatemala’s capital. These killings followed sieges by authorities aiming to end riots in three prisons, in which gang-affiliated inmates had taken nearly fifty hostages. Arévalo cautioned that entrenched “political-criminal mafias” created the conditions for such violence, reinforcing the need for clean and capable institutions.

Why these institutions matter—and what has gone wrong

For decades, Guatemala has faced entrenched corruption, with criminal networks penetrating deep into the state, fueling violence and migration. Hopes for change surged with the 2023 election of Arévalo, who won over 60 percent of the vote on an anti-corruption, reformist platform. 

Yet Arévalo’s ability to deliver has been severely constrained by a legislature and, most critically, a judicial system largely captured by the so-called pacto de corruptos, or corruption pact—a loose coalition of politicians, economic elites, and criminal groups. Through the control of key institutions, these actors have shielded allies from accountability and obstructed reform efforts. 

1. The Attorney General’s Office (MP)

The Attorney General’s Office, or Ministerio Público (MP), is the state’s principal weapon against gangs and transnational criminal organizations. Its performance directly shapes public security and regional stability.

Under Attorney General María Consuelo Porras, the MP has faced widespread criticism for obstruction, and she has been sanctioned by the United States, European Union (EU), and United Kingdom for corruption. Over 93 percent of criminal cases go unaddressed, including those involving organized crime, while the MP has aggressively pursued judges, political opponents, and anti-corruption figures.

A captured MP means one thing: Criminal organizations operate with state protection. The 2026 appointment will determine whether Guatemala continues to enable these networks or begins dismantling them.

2. The Constitutional Court (CC)

The Constitutional Court (CC) is Guatemala’s highest judicial authority. Its role is to ensure the rule of law, protect investors, and act as a backstop against executive or congressional overreach.

In the past five years, however, it has moved in the opposite direction. The CC has issued rulings that have been denounced for protecting corrupt officials, weakening accountability and prosecutions, and undermining electoral integrity. 

Co-opting the court is the ultimate prize for any criminal network: With compliant magistrates, illegal acts can be in effect legalized after the fact. 

3. The Supreme Electoral Tribunal (TSE)

The Supreme Electoral Tribunal (TSE) runs Guatemala’s elections and certifies results. Its independence determines whether democratic competition, rather than political mafias, decide who governs.

Despite facing immense pressure from the corruption pact, the TSE validated Arévalo’s victory in 2023. However, the body was immediately targeted by the MP and CC, which suspended magistrates, raided electoral facilities, and sought to annul the election results. Such measures raise serious concerns about institutional stability ahead of the 2027 general elections. 

With many municipalities heavily influenced by criminal groups, a weakened TSE could further destabilize the country and region. 

4. The Comptroller General (CGC)

The comptroller general (CGC) is Guatemala’s financial watchdog. When independent, this office is one of the country’s most effective tools for preventing corruption. 

When captured, it becomes a tool for shielding allies and enabling illicit contracting schemes that directly undermine fiscal integrity and free market competition. Also, given that the law disqualifies any political candidate under investigation by the CGC, a co-opted comptroller’s office can—and has been—used to selectively target political competitors. 

5. Rector of the University of San Carlos (USAC)

The head of Guatemala’s only public university wields significant influence. The rector shapes USAC’s representation in multiple nominating commissions, but the role’s reach extends far beyond academia. The university holds seats in more than fifty-three state bodies—including important financial institutions.

Under the current rector, Walter Mazariegos, who is under US sanctions, the university has appointed aligned actors to influential bodies while sidelining independent academics and students who have mobilized against corruption and fraud at the institution. On January 19, Mazariegos was sworn in as head of the nominating commission for the TSE.

An independent rector is essential for ensuring that Guatemala’s judiciary is staffed by competent professionals rather than political operatives unwilling to confront organized crime.

What role the United States can play

Guatemala is central to US regional interests, as highlighted by Secretary of State Marco Rubio’s decision to include the country in his first foreign trip in early 2025. In recent years, Guatemala has become a major transit route for drugs and other illicit flows, while also serving both as a source of migrants and a transit country for hundreds of thousands more. If the institutions that are meant to address illicit activity and corruption remain captured, these trends will worsen, putting US national security at risk.

Guatemala is also one of the few countries in the region to recently sign a new trade deal with the Trump administration aimed at lowering tariffs and expanding investment and exports. However, reaching these objectives seems unattainable under a Guatemalan judiciary that favors certain interests at the expense of fair competition and foreign businesses. 

For the United States, Guatemala has historically been a “friend in the Hemisphere,” as it is framed in the 2025 National Security Strategy. Guatemala remains a strong partner on issues such as drug trafficking, port security, Chinese influence, and migration. It is now time for Guatemala’s judicial institutions to align with that partnership and work for hemispheric security and prosperity rather than enabling the criminal networks that undermine them.

Here are four steps the United States can take with Guatemala in 2026.

1. Deploy proactive, sustained diplomacy

The United States should directly engage Guatemala’s party leaders, congressional blocs, and judicial elites, as well as members of the nominating commissions. The message should be unambiguous: Manipulating this year’s appointments will have consequences.

Elements of Guatemala’s private sector have financed efforts to influence appointments, largely because the current system shields them from competition and accountability. They must also understand that supporting such efforts risks diplomatic isolation and sanctions, including trade penalties, fines, and the suspension of trade benefits under the Dominican Republic-Central America Free Trade Agreement.  

The US Embassy should be more vocal in calling out intimidation and providing protection or asylum when necessary. It must signal that candidates and commissioners facing threats will not be left alone and help foster reformist coalition-building. 

2. Expand targeted sanctions—and use them early

The US Treasury Department’s Office of Foreign Assets Control has already sanctioned more than fifty Guatemalan actors for corruption and anti-democratic actions. However, given the immense consequences of judicial capture, US sanctions should be broadened to target business elites financing institutional capture, commissioners accepting bribes, judges enabling impunity, and political operators coordinating interference. 

Sanctions must go beyond travel bans to restrict access to banking systems and foreign assets. To be effective, these sanctions should be extended to immediate family members of the primary targets of sanctions, who are often used to circumvent restrictions.

Measures should be coordinated with partners such as the EU and especially Spain, where several sanctioned former Guatemalan officials have relocated.

3. Support observation and transparency efforts

Washington should support the EU and Organization of American States observation missions in Guatemala, as international presence can meaningfully deter manipulation across all stages of the nomination process. 

Additionally, the unusual complexity of the 2026 appointment cycle, coupled with the high probability of illicit influence, warrants investing in transparency. The State Department should provide short-term, targeted grants to local civil society organizations and legal watchdog groups to follow the process and flag concerns in real time.

4. Mobilize the US and Guatemalan private sectors

Guatemala has the largest economy in Central America, and over two hundred US and other foreign firms have active investments in the country. Washington should encourage US businesses to communicate clearly that judicial capture will jeopardize investment and redirect capital to more stable markets. The Guatemalan private sector should also be vocal in support of a clean election process and independent candidates. 

High stakes, high reward

This year’s appointments offer a rare chance to break Guatemala’s cycle of institutional capture. Some actors are deliberately reframing the nominations as an ideological contest between left and right, hoping to shield themselves and cause US hesitation. In reality, the stakes are institutional, not ideological: It is a choice between a justice system that upholds the law and one that continues to serve criminal interests.

With a reformist executive in place and five key bodies being renewed simultaneously, the window for change is real. For US policymakers, safeguarding US strategic interests in the region requires supporting a 2026 appointments process that reinforces Guatemala’s rule of law and, in doing so, strengthens security and prosperity across the Western Hemisphere.

The post What to watch in Guatemala’s year of institutional reset appeared first on Atlantic Council.

Bottom lines up front

• Beginning under Hugo Chávez and then accelerating under Nicolás Maduro, Venezuela experienced one of the most dramatic economic collapses of modern history.
• The Maduro regime triggered the deepest drop in gross domestic product (GDP) per capita seen anywhere in the world since 2013.
• Catching up to the region’s average GDP per capita might require fifty years of consistent high growth—a daunting challenge for the country’s future leaders.

WASHINGTON—Nicolás Maduro is out, but the economic legacy of his policies, and of Chavismo more broadly, remains. In the more than ten years he was in power, inflation soared, businesses collapsed, investment fled and withered, and the overall output of the economy fell by over two-thirds.

The Venezuelan people will feel the effects of these policies for decades. The data available, albeit limited by the regime’s international isolation and autocratic nature, leads to one conclusion: Under Maduro, Venezuela experienced one of the most dramatic economic collapses of modern history.

Below are three charts that show the depth of Venezuela’s economic collapse and the challenge ahead for the country to recover.

Having induced the destruction of Venezuela’s productive sectors, fueled the migration of millions, and aggressively intervened in the economy, the regime triggered what we authors calculate to be the deepest drop in GDP per capita anywhere in the world since 2013. While Venezuelans’ economic woes began under Maduro’s predecessor Hugo Chávez, the full extent of the pain came after his death in March 2013. In the decade after Maduro came to power, Venezuelans lost some two-thirds of their per capita wealth.

The collapse in economic activity made Venezuelans poorer, but in addition, the regime’s policies spurred the deterioration of the average Venezuelan’s overall well-being and the country’s human development. Since 2013, Venezuela’s score has fallen on the United Nations’ Human Development Index, which factors in life expectancy at birth and education, in addition to economic figures. While most of the world, especially developing countries, saw development indicators improve over the past thirteen years, Venezuela moved in the opposite direction, with major drops in indicators even beyond economic figures.

A good way to illustrate the challenge of Venezuela’s economic recovery is by comparing GDP per capita levels with those of regional peers. Venezuela has gone from far outpacing its neighbors in per capita wealth (before Chávez came to power) to becoming one of the region’s poorest countries. Making up this lost ground should be a priority for Venezuela’s future leaders, an objective that will require a monumental economic reconstruction effort and potentially one of the most significant recovery programs of this century.

Multiple scenarios exist, but for Venezuela to catch up with its neighbors and bring its income levels back up to upper-middle income status will require concerted efforts to jumpstart its energy sector, diversify its economy, attract its diaspora, boost foreign investment, and build trust with investors and Venezuelans more broadly. As the chart above shows, catching up to the region (which itself has a lot of work to do to boost its own growth) will require half a century of above-average growth rates.

Maduro and his regime’s policies have left a long shadow, but there is a path forward for the country. Venezuela’s future leaders must set the foundations for a lasting recovery for the country.

This piece is part of “Economic pulse of the Americas,” a series of explainers about the latest trade trends in Latin America and the Caribbean, written by the Atlantic Council’s Adrienne Arsht Latin America Center. To get notified about future editions and other related work on the region, sign up here.

The post Three charts that show the long shadow of Maduro’s economic disaster in Venezuela appeared first on Atlantic Council.

Bottom lines up front

• Beijing’s recent request to dock a navy hospital ship in Rio de Janeiro has puzzled—and unsettled—Brazilian authorities.
• Yet, Brasília granted the ship access to the port, coincidentally at the same time that a US research vessel will also be docked there.
• By welcoming the Chinese vessel with little fanfare, Brasília is proving it isn’t yet ready to tilt one way or the other in its geopolitical balancing act.

BRASÍLIA—Brazil’s decision to allow a Chinese military hospital ship to dock in Rio de Janeiro could provide a case study of how Beijing is expanding its naval presence in the Western Hemisphere. It also demonstrates how regional powers are dealing with the pressures arising from the intensifying competition between the United States and China.

This past fall, China requested authorization from the Brazilian government for the People’s Liberation Army Navy hospital ship Ark Silk Road to dock in Rio de Janeiro from January 8 to 15. The request seemed, at first glance, to be just another routine stop on a humanitarian mission. 

But in Brasília, the request triggered unusual discomfort. The Chinese diplomatic note, sent on September 15 last year, omitted any reference to Harmony Mission 2025, Beijing’s first global humanitarian naval operation. And it offered few details beyond a statement that no research activities were planned in Brazilian waters and that the vessel would not use any radio equipment. In fact, the note did not explain why the ship wanted to dock in Rio de Janeiro at all.

The lack of clarity raised concerns within Brazil’s Ministry of Foreign Affairs and among some Brazilian Navy officers who spoke with me on the condition of anonymity. These officials were especially concerned because of the geopolitical context that served as the visit’s backdrop: China’s growing presence in a region traditionally perceived by Washington as part of its security sphere, just as the Trump administration is prioritizing Latin America and asserting itself with military force to impose its interests there.

Brazilian officials’ concerns over the Ark Silk Road, which have so far been raised only behind the scenes, highlight a structural tension in the country’s foreign policy: Brazil is economically dependent on China but has maintained a solid security partnership with the United States for decades. This duality is currently on full display. The US oceanographic vessel Ronald H. Brown is scheduled to dock at the Port of Suape, in northeastern Brazil, from January 14 to 21, for a scientific mission approved by the Navy General Staff. This means the US Navy mission will overlap with that of the Ark Silk Road, which arrived in Rio de Janeiro on January 8 as scheduled.

The coincidence of these maritime visits makes Brazil a reluctant arena for US-China competition. But it also offers Brazil an opportunity to demonstrate that the country wishes to act as a partner to both powers, without allowing itself to be instrumentalized by either of them.

Instrument of power projection

The Ark Silk Road is the second-largest ocean-going hospital ship designed and built by China. Weighing ten thousand tons and equipped with fourteen clinical departments, seven diagnostic units, and the capacity to perform more than sixty types of medical procedures, the ship is among the most visible faces of Chinese “smart power”: the deliberate combination of soft power and hard power that China’s defense doctrine increasingly relies on.

The humanitarian results so far, according to statistics publicized by Chinese officials, are impressive:

• 3,330 patients treated in Fiji, with 426 surgeries in just one week;
• 3,995 local patients treated, 679 surgical procedures, and 2,718 medical tests in Tonga;
• 771 consultations and 177 surgeries in Montego Bay, Jamaica, weeks after Hurricane Melissa devastated the country;
• 2,769 local patients treated and 207 surgeries completed in only three days in Kingston, Jamaica.

The Ark Silk Road, or the “ship of hope and envoy of peace” as Chinese authorities describe it, represents smart power in its purest form: It projects benevolence and technical capability, but this humanitarian narrative coexists with clear strategic calculations.

When I spoke with Rafael Almeida, a retired Brazilian Army colonel and defense and strategy analyst who holds a master’s degree from the National Defence University of China, he suggested that the Ark Silk Road’s capabilities extend well beyond medical functions for a hospital ship. For instance, he pointed to the ship’s unusually large number of sensors, antennas, and radar systems.

The ship’s itinerary included stops in need of humanitarian assistance, but it was also carefully designed with diplomacy in mind: With the exception of Mexico and Brazil, all of the Latin American countries included in the mission are part of China’s Belt and Road Initiative. In some countries, such as Nicaragua, the ship was received with military honors. The Nicaraguan National Assembly formally approved the ship’s visit as part of an exchange with its national army, marking the first time the People’s Liberation Army Navy has docked in the country.

The implicit message is unequivocal: China is gradually expanding its naval presence in the Western Hemisphere, and it is doing so under the banner of a humanitarian ship.

The South Atlantic enters the geopolitical arena

The Ark Silk Road’s passage along the Brazilian coast is occurring in an increasingly disputed region. In recent months, Washington has reinforced its presence in the Caribbean, following the resurgence of tensions between the United States and the regime of Venezuelan leader Nicolás Maduro, which culminated in Maduro’s extraction and arrest on January 3.

But the United States’ maritime military actions have gone beyond its policy toward Venezuela. Since September 2, the United States has destroyed more than thirty vessels in dozens of attacks carried out in the Caribbean and the Pacific Ocean against ships that, according to the White House, were transporting narcotics, though the administration has not presented any conclusive evidence linking these boats to drug trafficking.

Meanwhile, the Chinese humanitarian mission in the South Atlantic highlights the region’s growing strategic importance. The Ark Silk Road normalizes the Chinese navy’s presence in areas it was seen as unlikely to operate in until recently. Additionally, China has invested in ports in these areas for years, especially the mega-port of Chancay in Peru. This investment reinforces Beijing’s logistical capacity on the Pacific coast of South America. With Beijing’s humanitarian missions now reaching the Caribbean and the Atlantic, an arc of Chinese strategic infrastructure, naval diplomacy, and political influence is emerging.

It is no coincidence that China released an official document explaining its policy toward Latin America and the Caribbean less than a week after the United States unveiled its latest National Security Strategy, which places Latin America at the center of US foreign policy concerns. 

Brazil’s discomfort

China’s request for the Ark Silk Road to visit Brazil thus comes at a sensitive moment for Brazilian foreign policy. This timing, as well as the opaque nature of the request, have caused discomfort in Brasília.

When I reached out to Mauricio Santoro, a political scientist who specializes in Sino-Brazilian relations and collaborates with the Brazilian Navy’s Center for Political-Strategic Studies, he told me that Brazil does not require the kind of humanitarian support that China is offering to other countries with its mission. The Brazilian Navy has its own disaster response capabilities, Santoro noted, including the Multipurpose Atlantic Aircraft Carrier, the largest warship in Latin America. Moreover, Brazil’s United Health System is recognized as the largest public health system in the world. Free and universal, it serves a population of more than 200 million Brazilians. 

But rejecting the Chinese request would have been politically and perhaps economically costly. China is Brazil’s largest trading partner and a significant investor in the country’s infrastructure. An explicit “no” could have been interpreted as a pro-Washington geopolitical signal.

Given these factors, Brazil opted to buy time for a few months, but in November authorized the Ark Silk Road to dock in Rio de Janeiro on the requested dates. The announcement was made with little fanfare. Unlike in other countries in which the Ark Silk Road has operated, the Brazilian government has not yet issued a public statement on the matter and has refused to answer questions about the visit. 

When I reached out to ask questions about the Ark Silk Roads’s visit, the Brazilian government passed the buck. The Ministry of Foreign Affairs recommended that questions be directed to the Brazilian Navy and the Chinese embassy in Brazil. The Navy stated that it is only responsible for the technical and logistical aspects of the request. The Chinese embassy did not respond. I also contacted the Brazilian Ministry of Defense, which pointed me back to the Foreign Ministry. Documents obtained through the Access to Information Act confirm that official messages were exchanged only between the Ministry of Foreign Affairs and the Navy.

Even after the Ark Silk Road docked in Rio de Janeiro on January 8, the Brazilian government has not commented on the matter, in contrast to the Chinese Embassy in Brazil and the Chinese Consulate in Rio de Janeiro.

Meanwhile, the Regional Medical Council of Rio de Janeiro (CREMERJ) formally notified the state health department, requesting clarification as to whether the ship would be providing medical services to the local population. Citing Brazilian law and Federal Medical Council regulations, the CREMERJ emphasized that any medical act performed within Brazilian territory—even during humanitarian or diplomatic missions—must be subject to oversight. However, there is no official authorization for the Ark Silk Road to provide medical care to Brazilians.

An ‘embarrassing’ situation

On January 10, a Brazilian Navy delegation, led by Captain Gustavo Sant’anna Coutinho, chief of staff of the 1st Naval District Command, met with People’s Liberation Army Navy officers aboard the Ark Silk Road. Brazilian Navy musicians also performed on the ship’s deck. According to a senior Brazilian military officer I spoke with, the visit was accompanied by a series of confidence-building activities, including courtesy calls, invitations to tour the vessel, and a friendly football match at the Navy’s Physical Education Center. Beyond these engagements, the same officer told me, there was little substantive interaction, and the agenda remained largely routine—consistent with standard naval diplomacy.

However, this routine contrasted sharply with the level of control surrounding access to the vessel. Spontaneous visitors were not permitted. According to multiple sources I spoke with, entry required prior authorization from the Chinese consulate, and visitor lists closed in December. The Chinese Consulate General in Rio de Janeiro did not respond when I contacted it.

Despite these restrictions, the ship’s arrival was met with a visible public reception. Chinese citizens gathered at Pier Mauá to welcome the vessel, waving Brazilian and Chinese flags—scenes reminiscent of organized demonstrations during the 2025 BRICS summit in Rio de Janeiro. Brazilian media outlets have reported that similar groups at previous events were coordinated by intermediaries and accompanied by private security.

The tightly controlled access and carefully managed optics have fueled unease among some Brazilian military analysts and officers. Speaking on condition of anonymity, several of them described the visit to me as “embarrassing.” A Brazilian Navy officer told me that there had been pressure from Brazilian diplomats to ensure the Chinese were well received. However, the military did not know how to proceed since the visit had not been properly publicized.

Port visits routinely allow foreign navies to update their knowledge of port infrastructure, logistics, and coastal conditions. Such practices are common among long-established naval powers operating under bilateral frameworks. But according to Almeida, the retired Brazilian Army colonel, this marked the first time a Chinese military vessel conducted such an exercise in Brazil without a formal defense agreement in place.

Against this backdrop, Brasília’s refusal to provide more detail or otherwise draw attention to the Ark Silk Road’s docking, unlike several other countries on the itinerary, demonstrates that it is seeking maximum discretion to prevent any unwelcome geopolitical interpretations.

At the same time, this posture reflects an awareness that the convergence of Chinese and US naval presence creates a limited but significant opportunity for Brazil to reaffirm its longstanding preference for strategic autonomy. This means engaging both powers as partners, while making clear that such engagement does not amount to alignment and that Brazil does not intend to be instrumentalized in a dispute it did not choose.

The post China’s latest naval moves in the Western Hemisphere put Brazil in the diplomatic spotlight appeared first on Atlantic Council.

Bottom lines up front

• Venezuela needs to attract foreign investment to revive its economy and oil production. To do that, it needs to reduce its debt service costs.
• The IMF can help Venezuela address its debt overhang; a recently passed reform could allow the institution to provide support even if China were to block or delay a debt restructuring.
• The Trump administration can help support the IMF’s efforts to stabilize Venezuela, which should include a speedy restructuring that provides for a comparable treatment of different creditor classes.

WASHINGTON—Without US support, Venezuela’s post-Maduro government stands little chance of stabilizing its shattered economy. The United States is the main customer for Venezuela’s oil, US creditors hold the bulk of Venezuela’s debt, most bonds were issued under New York state law, and the White House has strong political influence over the new government. But even with US support, an economic recovery will be difficult. It’s too early, for example, to tell whether the United States has sufficient levers to initiate a successful recovery in Venezuela, and it’s unclear whether the government in Caracas is capable and willing to do what’s necessary to make a recovery stick. 

What’s needed first is clear, however. Economic stabilization requires a reduction of Venezuela’s massive debt obligations, which likely exceed $150 billion and are owed to a tangled web of bondholders, arbitration claimants, Russia, and—most problematically—China. Venezuela’s debt is where the Trump administration should start, and it should do so while working with the International Monetary Fund (IMF).

A debt crisis of staggering proportions

Venezuela’s external debt represents roughly 180–200 percent of its gross domestic product, making it one of the world’s largest unresolved sovereign defaults. The $60 billion in defaulted bonds once issued by the government and the state-run oil company Petróleos de Venezuela, SA have ballooned past $100 billion as a result of accumulated interest. International arbitration awards from companies expropriated by the Chávez regime add another $20 billion. And among other creditors, China holds at least $10 billion in bilateral debt, collateralized by oil shipments that give Beijing secured creditor status and operational leverage over Venezuela’s petroleum sector.

Without addressing this debt overhang, Venezuela will find it difficult to attract the massive foreign investment needed to revive its oil production. There are differing assessments of what Venezuela can realistically service while rebuilding its economy, but substantial debt reductions will be necessary. Citigroup, for example, estimates that restoring debt sustainability requires principal haircuts of at least 50 percent. Other estimates suggest even deeper reductions—down to a 30 percent recovery value—to avoid a cycle of repeated defaults that would cause permanent economic dysfunction.

Why the IMF matters

It has been encouraging to see US Treasury Secretary Scott Bessent engage with IMF and World Bank leadership to discuss Venezuela’s economic reconstruction. Given the IMF’s expertise in resolving complicated debt situations and restoring macroeconomic stability, support by the Bretton Woods institutions will be critical.

At the same time, the IMF must be careful to preserve its independence and its legitimacy. Especially in cases of sovereign arrears, the fund needs to be seen as an impartial arbiter that adheres to its legal mandate and its rules-based framework. For example, the decision to recognize a new government in Caracas as a legitimate counterpart—which is necessary for Venezuela to negotiate access to the IMF’s financial resources—is up to the IMF’s executive board and to it alone.

What follows assumes that this prerequisite is met and that the IMF can embark on what is likely to be an extraordinarily complex restructuring effort. The fund has not conducted an economic assessment of Venezuela since late 2004, representing a twenty-one-year gap in formal relations. Moreover, the capacity of the government and central bank to implement necessary policies will need to be demonstrated, and statistical processes will likely have to be substantially rebuilt.

Nevertheless, an IMF program offers something no bilateral arrangement can provide: a multilateral framework that legitimizes deep debt restructuring and provides Venezuela with the financing and technical assistance to implement reforms. While designing a program that gives confidence that future claims on Venezuela will be honored, the IMF can bring credibility to debt sustainability analyses, work closely with diverse creditor groups, and impose program conditionality that prevents preferential treatment of powerful creditors, particularly China.

Who gets paid first?

In this regard, it is important to recognize that the large investment and economic needs of Venezuela should take precedence over short-term payouts to official or private creditors. Neither the IMF nor other creditors will be able to provide fresh funds without being assured that Venezuela has the capacity to repay such loans.

This means that creditors will likely need to agree to substantial deferments on interest and principal repayments. It will take time for creditor committees to form, however, and the negotiations will need to identify different options that ensure broad compatibility of treatment, including oil‑linked debt instruments and bond exchanges with different coupons and maturities.

The Trump administration will play an important role in this process. The administration’s stated goal of kickstarting Venezuela’s oil industry is dependent on a speedy debt resolution, which it can facilitate, for example, through executive orders that protect Venezuelan assets from litigating creditors. At the same time, the administration should avoid the impression that it uses its policy leverage and legal powers to help US creditors without ensuring comparable terms for foreign creditors, whether private or official.

The latter principle will be important for the position of China. Under traditional IMF rules, Beijing could until recently effectively veto a Venezuelan program by refusing to provide upfront restructuring commitments and, instead, engaging in multiyear negotiations that would leave the country in limbo while economic conditions deteriorate further. In this scenario, China would retain its secured position through oil-for-loan agreements while Venezuela remained shut out of multilateral support.

The strategic opening: Lending into Official Arrears

Fortunately, the IMF reformed its Lending into Official Arrears (LIOA) policy in April 2024 specifically to address coordination problems with large creditors in debt restructurings. The new mechanism allows the IMF to lend even as official bilateral creditors refuse to commit to restructuring—provided that the fund implements enhanced safeguards.

These safeguards are powerful: phased disbursements, program conditionality prohibiting preferential creditor payments, and quarterly reviews monitoring restructuring progress. Most importantly, once an IMF program is operational, Venezuela would be contractually bound not to provide official holdout creditors better treatment than bondholders and other creditors receive. The oil-for-loan arrangements that currently give Beijing privileged access to Venezuelan revenues would be explicitly prohibited under program terms.

As a result, China would have to choose between two options: It could participate constructively in restructuring on terms comparable to other creditors, or it could watch from the sidelines while Venezuela receives IMF support, stabilizes its economy, and implements rules preventing Chinese preferential treatment.

Should it be necessary to enact the new policy, Venezuela’s case would resonate well beyond the country itself. China is now the world’s largest bilateral creditor, but recent debt restructurings in Zambia, Sri Lanka, Ethiopia, and Ghana faced lengthy delays, with months or years passing from staff-level IMF agreement to financing assurances. The LIOA reforms were designed precisely to give the IMF leverage in such situations. Venezuela would become the highest-profile test yet of whether these reforms achieve their intended purpose.

Charting a path forward

The Trump administration’s best path forward is to pursue a sequenced strategy to achieve broad international buy-in while minimizing the potential for Chinese obstruction. To do this, the administration should:

First, clarify government recognition and lift sanctions. Acting President Delcy Rodríguez governs under a ninety-day mandate that lacks European Union recognition. Washington should work with other countries to establish a transitional framework—likely requiring elections—that provides the legitimacy necessary for IMF engagement.

Second, unlock Venezuela’s frozen special drawing rights (SDRs). The approximately five billion dollars in SDRs are Venezuela’s own reserves, not new lending. Releasing them provides immediate liquidity for stabilization and humanitarian assistance while IMF program negotiations proceed. If properly executed under international supervision, this would demonstrate US commitment to Venezuela’s economic recovery rather than merely extracting oil resources.

Third, coordinate creditor groups early. Representing major bondholders, the Venezuela Creditor Committee has already expressed willingness to negotiate a restructuring. The administration should facilitate such discussions to quickly establish realistic recovery expectations, including by discouraging holdout creditors.

Fourth, encourage Venezuela to formally request Chinese participation in restructuring on terms comparable to other creditors. When it does this, Caracas should give Beijing a four-week window to respond, as required under IMF policies. If China provides constructive commitments, then these should be incorporated into the program framework. But if China holds out, then the United States should direct its IMF executive director to support enhanced safeguards under the IMF’s LIOA policy, proceeding with program approval despite Chinese resistance.

Fifth, design robust program conditionality. Besides identifying appropriate macroeconomic policies, along with governance and other structural reforms, the IMF program should include strict caps on debt service payments to ensure comparability of treatment, prohibition of secured lending arrangements such as oil-for-loans, and transparent reporting on all creditor interactions. These safeguards would protect both IMF resources and the integrity of the restructuring process.

The strategic imperative

The Trump administration’s Venezuela intervention raised profound questions about US power projection in the post–Cold War era. Answering those questions requires more than military force—it requires strategic sophistication in wielding economic and institutional tools. An IMF program deploying the new LIOA mechanisms, if necessary, to ensure China’s active participation while delivering consensual and sustainable debt relief would offer precisely that opportunity. The question is whether Washington possesses the diplomatic patience and multilateral discipline to see it through.

The post How the IMF can help Venezuela stabilize its economy appeared first on Atlantic Council.

Executive summary

Financial-sector policymakers and financial service providers are facing both a real challenge and unique opportunity to drive economic inclusion for about three billion people and spur growth toward the Sustainable Development Goals (SDGs).

The good news from the World Bank’s Global Findex Database 2025 is that 79 percent of adults globally and 75 percent in low- and middle-income economies (LMIEs) now have a financial account of some kind. Mobile phones are even more ubiquitous, with 86 percent of adults globally and 84 percent in LMIEs having one, which in most contexts can be used to access financial services. This means about four out of every five people have the potential to save safely and borrow prudently to meet their financial needs and the potential to pay and be paid digitally. This is good news for the individuals, their families, and for these economies because, as the IMF has found,
financial inclusion serves as a catalyst for both economic participation and inclusive growth.

However, the majority of adults in LMIEs that have a financial account do not yet fully engage with the formal financial sector. Only 40 percent of adults in LMIEs (on average) saved formally and only 24 percent of adults in LMIEs (on average) borrowed from a formal financial service provider in the last year and even they do not necessarily have the type of credit they need.¹ There are, therefore, about three billion people who could actively engage in the formal financial sector, and they present both a challenge for financial sector leaders and an opportunity for accelerating inclusive growth.

The main reasons adults in LMIEs do not use formal digital financial services are affordability, lack of trust in service providers, and lack of products to meet their needs. Rapid advances in digital public infrastructure (DPI) and artificial intelligence (AI) have the potential to directly tackle these challenges. Together they can reduce costs, increase trust, and tailor products for individuals, thereby improving lives and driving growth:

• DPI has been endorsed by the Group of Twenty since India’s presidency in 2023.² Ninety-seven countries now have DPI-like digital payments; sixty-four countries have digital IDs, and 103 have data exchange—together reducing costs and increasing trust.³
• AI, by cheaply analyzing massive data sets, is turbocharging cost reduction and product tailoring, which translates into greater affordability and access for people on lower incomes.⁴

Yet, there are potentially problematic aspects to these exciting innovations. DPI has the potential for loss of data privacy (if privacy by design is not embedded), for rent extraction (if not an open-source platform), and for government surveillance (if DPI safeguards are not central).⁵ AI has the potential to turbocharge fraud, scams, and identity theft and compromise trust.⁶

Therefore, government financial-sector regulators and policymakers have urgent and important decisions to make about how to enact and enforce responsible guardrails in the financial ecosystem. These guardrails are essential so new customers have affordable, appropriate products, can trust their money and data are safe, and have effective recourse mechanisms if problems occur. National coordination at the highest level is essential, regional approaches including policy harmonization can be cost-effective, and urgency is imperative. Financial-service leaders also have key decisions to make about how to design affordable and responsible financial products that build trust, enable resilience, and foster financial well-being and economic growth. There is now a unique opportunity for financial-sector leaders to unleash economic potential for three billion people and accelerate inclusive growth.

Ruth Goodwin-Groen is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center. Goodwin-Groen brings thirty years of strategic and technical leadership in financial-sector development and financial inclusion in emerging markets to her current consulting practice, Goodwin-Groen Consulting. Her focus is on responsible digital financial inclusion and equality in financial services for women.

Goodwin-Groen is best known as the founding managing director of the United Nations-hosted Better Than Cash Alliance, which created a global movement from cash to responsible digital payments to achieve the Sustainable Development Goals. Alliance members and partners include over 113 governments, 229 companies, and most of the UN—accounting for over 90 percent of global gross domestic product.

Goodwin-Groen has a PhD in financial-sector development from the University of Bath, an MBA with distinction from Harvard Business School, and a Bachelor of Science with Honors from the University of Western Australia.

The author extends special thanks to those providing expert input on this paper: Isabelle Carboni, Expert Consultant; Eric Duflos, CGAP; Nicole Goldin, United Nations University-Centre for Policy Research & Atlantic Council; Leora Klapper, World Bank; David Porteous, Integral: Governance solutions; and Camilo Tellez-Merchan, Gates Foundation. She also deeply appreciates the input of Atlantic Council colleagues Josh Lipsky, Sophia Busch, and Juliet Lancey as well as those who contributed to the findings and recommendations of this report through their participation in two roundtable discussions at the Atlantic Council in April and October of 2025. See the Appendix for a list of the participants. This report was made possible in part by a grant from Tala.

New Atlanticist Oct 15, 2024

Advancing a twenty-first century approach to remittances

By Alisha Chhangani, Ananya Kumar

Valued at nearly $900 billion each year, global remittances have become a large portion of many nations’ gross domestic product. But transaction costs remain too high—a problem that policymakers should tackle at upcoming meetings in Washington and Rio de Janeiro.

Africa Americas

Issue Brief Sep 20, 2024

Toward a financial inclusion agenda for the global majority

By Nicole Goldin

Policymakers, investors, and innovators must advance a new financial inclusion agenda designed for the global majority.

Economy & Business Fiscal and Structural Reform

Issue Brief Nov 2, 2023

Asking the right questions: Can digital currency enable financial inclusion?

By Ananya Kumar

Cryptocurrencies and CBDCs have the potential to enhance financial inclusion. However, the lack of quantitative data makes it challenging to evaluate their impact. To assess their financial inclusion capacity, this paper builds a rubric for policymakers which includes layers of consideration.

Digital Currencies Economy & Business

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

Learn more

The post A three-billion-person challenge: The rising global market for financial leaders appeared first on Atlantic Council.

Bottom lines up front

• Unlike many of its neighbors, Argentina relies heavily on export taxes to raise revenue for its often overstretched government finances.
• Argentina’s export tariffs are so high that they have discouraged production and exports, reducing the overall tax base.
• The Milei government has taken some steps in the past year to reduce export taxes. It should accelerate these efforts, while working to replace some of the lost revenue with other sources.

The midterm victory for Argentine President Javier Milei’s ruling party in October expanded its legislative authority and provided a renewed mandate from voters to continue the country’s transformative economic reforms. Since the election, headlines have largely focused on how the Milei administration will approach much-needed fiscal and labor reforms. But Argentina should also focus on further liberalizing its foreign trade. As part of the Milei administration’s efforts to optimize efficiency and broaden the domestic tax base while lowering tax pressure on the economy, Argentina should reduce its unusually burdensome taxes on exports, known as the retenciones.

Over the past few months, the Milei administration has taken some steps on the right track. On December 9, for instance, the administration lowered the export tax on soybeans from 26 percent to 24 percent. This and other recent steps are welcome, but further reforms of the export tax are needed. Failing to reduce these taxes further could cost Argentina a sizable share of its export potential in key sectors, trapping the economy in a disequilibrium. 

The history of distortive fiscal dependence

Argentina’s current system of taxes on exports is the result of a tumultuous history of measures imposed to fill fiscal shortfalls. The problem is that these export taxes uniquely punish the country’s most efficient, globally competitive industries by forcing capital and labor away from competitive sectors—a problem economists around the world have long recognized. These taxes have been imposed, adjusted, rescinded, and reintroduced time and again, particularly targeting Argentina’s highly competitive agribusiness products in a recurrent dynamic that has discouraged production and overseas sales. The loss of overseas sales creates further problems: it limits the inflow of foreign currency, primarily US dollars, into the economy, making it more difficult for Argentina to meet its foreign currency debt obligations.

Tellingly, several Argentine administrations have altered or canceled these taxes altogether to boost languishing production and sales. Argentina has also been an outlier in charging these export tariffs, with almost none of its regional peers charging these except for very limited and targeted exemptions.

The distortive effects that these taxes have had on Argentina’s exports are clear: Comparing export volumes (rather than export values, which are subject to price fluctuations in commodities) shows that Argentina’s exports have stagnated in recent years. At the same time, its peers in the Mercosur trade agreement (Brazil, Paraguay, and Uruguay) saw their export volumes grow considerably in the same period while charging only limited duties on certain exports. This loss of potential exports costs Argentina economic growth and stifles its agricultural sector.

Although the problem is clear, solving it is not as simple as it sounds. Argentina’s duties on agricultural exports, which had been mostly eliminated in 1992, were reintroduced in 2002 as an emergency fiscal stopgap measure following the country’s historic 2001 debt crisis and subsequent default. No government since then has been able to remove all of these taxes because of how important they have become for the country’s often overstretched finances.

Famously, Argentina has run budget deficits through most of the past two decades, as well as the better part of the twentieth century. Once these duties are imposed, they then experience fiscal inertia—the fiscal cost of removing them prevents governments from doing so. Argentina relies on taxes on international trade (both imports and exports) for over 10 percent—and sometimes as much as 20 percent—of its federal government revenue. As our research shows, this makes it an outlier among its peers. The 2022 average for Latin America, for example, was slightly under 4 percent, while the upper-middle income country average stood at around 3.5 percent.

Since coming into office in December 2023, the Milei administration has made great strides to bring government spending back under control. In its first year in office, it achieved and sustained a consolidated fiscal surplus for the first time in almost two decades. The government achieved this by implementing spending cuts and freezes, as well as eliminating several subsidies, all measures that were politically costly. At the same time, the government has eliminated other distorting taxes, including the PAIS tax on foreign currency purchases.

There has been some progress on export taxes. In 2025, the administration reduced and eliminated export duties on certain agricultural products, as well as several import duties. In September, the government approved a temporary suspension of duties on grain exports as part of a drive to accrue much-needed foreign currency reserves. In October, it temporarily suspended export duties on aluminum and steel to assist the sector following the United States’ imposition of universal tariffs on these products earlier in the year.

Nevertheless, the latest available data show that Argentina still relies on taxes on taxes on international trade (6 percent of total federal government income comes from export taxes, while at least 4 percent comes from duties on imports). Any major reduction of taxes on international trade could have serious implications for the government’s goal of keeping its deficit under control. According to the latest International Monetary Fund projections, which are largely based on Argentina’s current tax system, the government is expected effectively to break even fiscally in 2026, with little, if any, surplus space left after accounting for upcoming debt repayments.

The case for accelerating the reduction of export taxes

Reducing these taxes should be a priority for Argentina because of two well-known challenges. First, Argentina’s export tariffs are so high that they have discouraged production and exports, in turn reducing the size of the taxable export base, which reduces the tax’s efficacy. That is why an export duty reduction is likely to yield a greater increase in exports. However, to do this responsibly the government would need to work in stages, steadily replacing taxes from exports with other fiscal income sources, even as it continues to rein in overall spending. Some of the replacement tax revenue could come, for example, by increasing tax collection efficiency and broadening the tax base by including larger shares of the informal economy into the mainstream.

Second, Argentina operates on a tight currency band and has debt obligations denominated in US dollars that are due early this year and next year. This means that to maintain economic stability, the country needs dollar reserves, which have become increasingly scarce. Indeed, the lack of dollar reserves necessitated the US-Argentina swap line that the Trump administration instituted in October.

Argentina generates reserves through a conversion system that requires exporters to repatriate and sell dollar earnings to the central bank at the official rate. However, this mechanism, which would otherwise mechanically generate reserves, is undermined by the high export duties’ stifling effect on overseas sales.

Additional reforms are needed

As the Milei administration goes into the second half of its term, it should double down on its reform agenda, accelerating the pace of the country’s incremental liberalization. This means committing unambiguously to a liberal program that anchors expectations for, and delivers on, gradual export and import duty reductions that give room for the economy to grow—but also to adjust—in the process. The reduction of export duties should be gradual to account for the country’s tightly kept and necessary budget surplus. Import duties, which also generate revenues, should be reduced in a gradual process that eases the purchase of goods, especially those that are needed for Argentina’s own productive sectors. However, Argentina’s import duties are governed in part by Mercosur, so this will need to be done in close coordination with the country’s partners in the bloc. 

To further boost exports as an engine of growth, Argentina needs to move toward a more orthodox economic and fiscal model that does not punish exports and does not rely on export duties for an inordinately large share of its total tax revenues. 

The moment to move in that direction is now. The next general election will take place in October 2027. Any signal that the Milei administration’s fiscal consolidation agenda is stalling, that currency reserve issues persist, or that productivity is static may reignite capital flight once again. For its economic reform agenda to succeed, the Milei government must achieve what previous administrations could not: fiscal discipline with a sustainable export-driven growth model.

The post To unlock growth, Argentina should reduce its export taxes appeared first on Atlantic Council.

On January 12, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was quoted in a Fox News article titled “Marco Rubio emerges as key Trump power player after Venezuela operation.”

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig quoted in Fox News on Trump Venezuela policy appeared first on Atlantic Council.

He also emphasized that Venezuela can “no longer cozy up to Hezbollah and Iran in our own hemisphere.” 

There are clear implications of the Maduro arrest with respect to US-Iran policy and President Donald Trump’s calculus on strategic action against Washington’s adversaries. The US president has indicated he is weighing “very strong” options on Iran as demonstrations there escalated and the death toll rose sharply over the weekend, according to rights groups.

And as Rubio indicated, the operation could also have a more immediate impact on Tehran’s interests and operations abroad—with Venezuela serving as a foothold for Iran and its proxies in the Western Hemisphere.

Our experts break down Iran’s ties to Venezuela and the impact Maduro’s capture could have on Tehran’s interests both in and outside of Iran’s own borders.

Iran-Venezuela relations: From oil to resistance axis

Venezuela-Iran relations have strengthened in recent years: Both countries are oil producers, both have struggled under a robust Western sanctions regime, and as Tehran upgraded its relationship with Caracas, its proxies, such as Hezbollah, have established themselves inside Venezuela’s borders—creating a strategic foothold in the Western Hemisphere. 

Both countries are founding members of the Organization of the Petroleum Exporting Countries (OPEC) and had an official relationship before the 1979 revolution in Iran that saw the overthrow of the shah. As the Iranian revolution unfolded and the Islamic Republic came to power in Tehran, Venezuela was one of the first countries to recognize the new Iranian government.

This relationship intensified, however, when Maduro’s predecessor, the late Venezuelan leader Hugo Chavez, became president in 1999.

Between 2001 and Chavez’s death from cancer in 2013, Chavez and his Iranian counterparts engaged in dozens of diplomatic visits, and “the two countries signed an estimated three hundred agreements of varying importance and value, ranging from working on low-income housing developments to cement plants and car factories,” according to analysis from the Center for Strategic and International Studies (CSIS). 

Under Chavez, Tehran’s development projects in Venezuela “boosted Chavez’s image and advanced his anti-imperialist agenda throughout the region.” And through Venezuela, Tehran leveraged the partnership to bolster its posture in South America, including in Bolivia and Nicaragua. 

By the tail-end of Chavez’s rule in 2012, Iran’s investments and loans in Venezuela were valued at $15 billion, according to CSIS. 

Beyond oil and diplomatic agreements, gold smuggling has also shaped the relationship model between Tehran and Caracas. Venezuela holds the largest gold reserves in Latin America (just counting Central Bank reserves, and without including geological gold resources, which would place the country in the fifth place for gold reserves worldwide). Additionally, reports indicate that gold has been smuggled to Iran for years as a mode of payment for Iranian assistance to revive Venezuela’s oil sector. 

A base for Hezbollah and the IRGC 

Joze Pelayo, associate director for strategic initiatives and policy at the Atlantic Council’s Scowcroft Middle East Security Initiative, explains

Against this backdrop, Iranian-backed Hezbollah and its affiliates have used Venezuela as a strategic hub in the Western Hemisphere. The country has served as a sanctuary for Hezbollah to evade sanctions, a center for operations and money laundering, and a base for its transnational criminal and drug trafficking network. 

Hezbollah has flourished in key locations in Venezuela—establishing itself within business networks such as Margarita Island and the Paraguaná Peninsula, both with coastal access and a significant Lebanese diaspora community.  

Iran also used the gold market in Venezuela to finance Hezbollah’s operations.  

In 2022, a seizure order signed by former Israeli Defense Minister Gallant and published by the National Bureau for Counter Terror Financing in the Ministry of Defense exposed a smuggling ring involving gold being transported on sanctioned Iranian flights with proceeds directed to Hezbollah.

In addition to all these exchanges, Iran’s Quds Force (the external arm of Iran’s Islamic Revolutionary Guard Corps responsible for asymmetric warfare, cover operations, and intelligence) maintains a robust presence in Venezuela to support Maduro in times of crisis, according to a report from December 2025.  

The hierarchical structure in Venezuela is headed by Ahmad Asadzadeh Goljahi, who oversees operations and heads the “Department 11000,” a Quds Force subunit linked to international terrorist plots, and “Department 840,” involved in overseas assassinations. It is then no surprise that the Iranians attempting to abduct US journalist Masih Alinejad from her home in New York were supposed to make a stop in Venezuela before taking her to Iran.  

Maduro’s capture and the potential realignment of Venezuela with the United States represent a major setback for the Quds Force operations and financing. Such a shift could significantly disrupt the group’s transnational criminal and drug-trafficking networks, oil-smuggling scheme, and other illicit activities tied to Hezbollah and the Islamic Republic of Iran.  

One potential silver lining: Under US custody and influence, Maduro (and possibly Acting President Delcy Rodriguez) could provide critical intelligence as witnesses and cooperators, assisting to expose the extent of these networks, how to properly root out these toxic elements from the country, and key figures the United States could go after next.

A US signal to Tehran 

Kirsten Fontenrose, nonresident senior fellow at the Scowcroft Middle East Security Initiative, explains

The Maduro case is strategically relevant less as a template than as a signal. It suggests a US willingness to act decisively against leaders already criminalized and sanctioned, rather than allowing standoffs to persist on the assumption that the risk of escalation alone will deter action.

The Trump administration framed Maduro’s capture as a law-enforcement arrest rather than a military campaign. The United States did not invoke humanitarian intervention, collective self-defense, or congressional authorization for interstate hostilities. Instead, it relied on longstanding criminal indictments and sanctions authorities. Maduro has been under US indictment since March 26, 2020, for narcotics trafficking and narco-terrorism, and he has been subject to comprehensive Treasury sanctions well before the January 2026 operation. The legal basis for such extraterritorial law-enforcement action rests on domestic authorities rather than the law of armed conflict—a distinction that is controversial but not unprecedented in US practice. 

For Tehran, the relevance is not the legal argument itself but the political signal embedded in its use. Iranian strategic planning has long assumed that US concern about escalation—particularly actions that could be interpreted as leadership targeting—would impose practical limits on Washington’s behavior. The Maduro episode complicates that assumption. It also reinforces a second point: US leverage does not depend exclusively on military operations. In this case, years of sanctions enforcement, financial pressure, indictments, and diplomatic isolation preceded the arrest, demonstrating that decisive outcomes can be pursued through non-military instruments even in high-risk contexts. 

That sequencing intersects with current thinking about the timing of pressure on Iran. Analysis by Rapidan Energy Group Chief Executive Officer Scott Modell published in late 2025 argues that early 2026 presents unusually favorable market conditions for intensified pressure on Iranian oil exports. The analysis points to soft global demand growth, rising non-OPEC supply, spare capacity among OPEC+ producers, and subdued price expectations, suggesting that concerns about oil-price spikes—often a key political constraint on US action—would be less binding in the first quarter of 2026. If that assessment holds, market considerations would be unlikely to restrain US policymakers contemplating additional economic pressure on Iran during this period. 

Trump’s public statements following the Venezuela operation reinforce this interpretation. He framed the action in terms of accountability and deterrence, not regime change or nation-building. His emphasis on speed and decisiveness is consistent with earlier US decisions favoring limited, time-bound uses of force—particularly in counterterrorism and retaliatory contexts—over extended military campaigns. 

This posture aligns with the policy orientation of figures shaping the administration’s approach. Homeland Security Advisor Stephen Miller has emphasized coercive clarity; Special Envoy to the Middle East Steve Witkoff has advocated transactional diplomacy backed by leverage; Vice President JD Vance has expressed skepticism toward open-ended military commitments. Reporting also suggests a US Central Intelligence Agency leadership preference for intelligence-driven, more aggressive collection and disruption posture. 

Recent US actions elsewhere provide additional context. Strikes against Iran-aligned militias in Iraq following attacks on US personnel in 2024, and counter-ISIS airstrikes conducted with host-nation consent in Nigeria in December 2025, illustrate a preference for responding quickly to defined threats without prolonged warning or phased escalation. These cases do not establish a doctrine, but they reinforce the impression of a US approach that favors early, bounded action over incremental response. In this context, Operation Absolute Resolve is meaningful because it unsettles a core assumption within Tehran—that leadership insulation and escalation risk reliably constrain US action. 

The core implication for Iran, then, is strategic rather than operational. The Maduro seizure suggests that the United States is prepared to act decisively against leaders who are already criminally indicted, comprehensively sanctioned, and politically isolated, and that it may do so during periods of internal strain rather than waiting for those pressures to resolve. 

None of this implies imminent leadership targeting in Iran. But it does suggest that Washington is reassessing assumptions about timing, leverage, and leadership vulnerability. 

The post The Venezuela-Iran connection and what Maduro’s capture means for Tehran, explained  appeared first on Atlantic Council.

On January 9, Tressa Guenov, director of operations and programs and senior fellow at the Scowcroft Center for Strategy and Security was interviewed on Times Radio about the US-Russia relationship. She argues that though the Trump National Security Strategy does not name Russia as an adversary, oil tanker seizures demonstrate a harder line from the US against Russia in the Western hemisphere.

Staff

Tressa Guenov

Director, Programs and Operations and Senior Fellow

Scowcroft Center for Strategy and Security

The post Guenov on Times Radio about how Venezuela impacts the US-Russia relationship appeared first on Atlantic Council.

What impact will this deal have on European competitiveness and South American export markets? And what details remain to be ironed out as the deal moves onto the European Parliament for final approval? Our experts provide their insights into this decades-in-the-making trade pact below. 

1. Why is the EU-Mercosur deal happening now?

Those European farmers and others opposed to the EU-Mercosur deal can blame US President Donald Trump for the conclusion of this significant free trade agreement. Negotiations between the EU and Mercosur were essentially on hold after the basic agreement, finalized in 2019, was met with serious opposition by key EU member states. During 2024 and 2025, the European Commission and Mercosur negotiated an “additional instrument” with protections on labor, human rights, and environmental issues. With Trump’s tariffs in effect by summer 2025, pressure mounted for the EU to diversify its trading partners. Last year, the EU finalized a new trade agreement with Indonesia and updated an existing agreement with Mexico. The bloc also made significant progress on an EU-India trade deal.

Nevertheless, the Mercosur deal still faced near-fatal opposition until it received two final pushes: First, the European Commission proposed safeguards to protect agricultural interests from import surges. Second, the new US National Security Strategy made clear for the EU that trade relations with Latin America were a geopolitical imperative. Nevertheless, Italian Prime Minister Giorgia Meloni refused to provide her country’s needed vote until the European Commission promised additional agricultural support in the next EU budget. With Italy’s support today—and in the wake of a US operation in Venezuela that left Europe on edge about Greenland—the EU-Mercosur agreement finally made it over the finish line. 

—Frances Burwell is a distinguished fellow at the Atlantic Council’s Europe Center.

***

The EU–Mercosur trade deal comes at a moment of growing pressure to diversify export markets and trade partners amid heightened geopolitical uncertainty, particularly in light of US tensions with China and the imposition of US tariffs. For Mercosur, this urgency has been especially acute for Brazil, the bloc’s largest economy, which has faced an additional 40 percent US tariff on top of baseline duties and whose number one trading partner is China.

—Valentina Sader is a director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality and diversity, and manages the Center’s Advisory Council.

***

The European Commission has sought to expand the EU’s network of trade relations to compensate for pressures from US tariffs, aggressive challenges from China, and the need to secure access to critical materials. Whether that diversification strategy is credible hinged in no small part on this trade deal—not just on the substance of market access and comparative advantages but also on the geopolitical feasibility of such a major agreement. The shifts in US trade policy under Trump, the challenges to the global trading system that Europe’s export-oriented economies depend on, and the demonstration of China’s stranglehold on critical resources clearly accelerated the decadeslong negotiations between the EU and Mercosur, which first opened in 1999 and were only finalized in 2024.

Last-minute additions were made by the EU in 2025 to provide more protections for European farmers. European Commission President Ursula von der Leyen hoped to sign the deal in Brasília in December 2025 after the initial safeguards were agreed upon in September, but Italy threw an unexpected wrench in those plans until further guarantees were made to protect domestic producers. Dramatic protests by farmers in Brussels in December solidified the momentum against signing the deal before Christmas.

On Wednesday, the safeguards Italy wanted were agreed upon by the EU’s agricultural minister and Rome lifted its veto. This paved the way for the European Council to vote in favor of the deal today by qualified majority—despite France voting against it, amid fresh farmer protests in Paris and increased political pressure on French President Emmanuel Macron—and for von der Leyen to officially sign the deal with Mercosur leaders in Paraguay as soon as January 12.

—Jörn Fleck is the senior director of the Atlantic Council’s Europe Center.

2. What impact will this have on Europe?

Europe worked hard to reach consensus on how to assuage doubts from European farmers about any negative impacts on their livelihoods. The additional measures added to the deal include “safeguards” for sensitive agricultural sectors, such as poultry, beef, eggs, citrus, and sugar, which would “suspend tariff preferences” in the case of “serious injury” to EU farmers. Serious injury is defined as an increase in import volume or a decrease in prices by more than 8 percent compared to the three-year average. The European Commission also introduced a slew of regular monitoring instruments, which will have to report to the European Council and European Parliament for increased accountability on enforcement. The Commission will be able to suspend imports from Mercosur in sensitive sectors if it deems this to be necessary. The final concessions agreed this week to bring Italy on board also include a revision to the 2028-2034 EU budget to allow farmers early access to roughly €45 billion in subsidies, as well as lowering import duties on fertilizers, the unaffordability of which was a major sticking point for protesters.

Economically, the agreement will remove approximately four billion euros worth of tariffs between the two trading blocs, which is significant for several key EU sectors that were previously subject to high tariffs when exporting to Mercosur. European exporters will no longer face 35 percent tariffs on car parts, 28 percent tariffs on dairy, and 27 percent tariffs on wine. The Commission estimates that the agreement could increase EU exports to Mercosur by 39 percent each year and support more than 440,000 jobs in Europe. However, not everyone shares this rosy assessment. Macron, in his announcement that France would not support the deal, stated that the economic gains would be minimal and that the agreement is “from another age.”

—Jörn Fleck

***

Despite the very visible and sometimes violent protests by European farmers, the Mercosur pact is likely to make a positive contribution to the European economy. The agreement removes most Mercosur tariffs for industrial goods (currently set at rates ranging from 15-35 percent), opening the market for European machine tools, cars, pharmaceuticals, and other products. Mercosur tariffs on most food and agriculture products (ranging from 20-35 percent) will also be removed.

While EU farmers have expressed concerns about Mercosur agricultural products, especially meat, flooding the EU market, that is very unlikely in reality. The agreement includes limited tariff-free quotas for Mercosur products, and once those quotas are reached, current tariffs are reimposed. For beef, the quota allows in only an additional 1.5 percent of total EU production, and for poultry, only 1.3 percent. Moreover, if there are sudden, sharp rises in imports, the EU can impose measures to limit them. Despite the rhetoric, agriculture remains a well-protected sector under the EU-Mercosur accord. And for European industry, this agreement opens an important new market.

—Frances Burwell

3. What impact will this have on South America?

Covering countries with a combined population of more than 700 million people, the trade deal promises to expand South American access to the European market, boosting exports and attracting greater EU investment. At the same time, it will pressure Mercosur industries to modernize, digitize, and improve efficiency to remain competitive amid increased exposure to European manufactured goods. 

Politically, the deal strengthens Mercosur’s credibility and cohesion at a moment of internal fragmentation, signaling that the bloc remains a viable platform for collective trade policy and diplomacy despite ideological differences among its members. As the bloc turns thirty-five this year, it is reasserting its strategic purpose, having finalized a deal with the European Free Trade Association, restarted negotiations with Canada, and now locked in a landmark agreement with the European Union.

—Valentina Sader

4. What should the US take away from this?

The Trump administration is unlikely to provide any public support for this agreement, but it is also unlikely to make it a significant issue in the US-EU relationship, despite its current emphasis on Latin America as its sphere of influence. This is a serious underappreciation of the importance of this accord. The EU will now have free-trade agreements with close to eighty countries, while the United States has free trade agreements with only twenty. While Trump has signed additional “deals” with many countries, they have generally raised trade barriers, rather than opening markets, and US demands for inward investment and other conditions have left many trading partners bruised and resentful. 

The EU is certainly a tough negotiator, and the Mercosur accord will make some constituencies on both sides unhappy, but it is likely to raise trade levels between two significant economic blocs. The reduction in high Mercosur tariffs for EU goods will mean more exports for European industries, luxury goods, and other products. EU companies will be able to bid on public tenders in Mercosur countries on an equal basis with local firms. The agreement also safeguards the branding of more than three hundred traditional EU food products, such as champagne and parmesan cheese, meaning that US products with those same names must be rebranded to enter the Mercosur market. This is not only an economic loss for the United States, but a geopolitical one as well. EU and Mercosur businesses will generate more partnerships, and these growing economic ties are likely to lead to more political alignment at a time when many in the Southern Hemisphere are balancing their interests between China and the United States. 

For Mercosur leaders and their citizens, the contrast could not be starker: In the same week that the United States conducted a military operation against a neighbor, the EU has finally agreed to a significant trade pact based on the rule of law.

—Frances Burwell

***

As the EU and Mercosur double down on a multilateral, rules-based free trade geopolitical reality, the United States appears to be moving in the opposite direction. Given the current geopolitical context and in the wake of a new US National Security Strategy that places the Western Hemisphere at the center of US foreign policy, this deal is an opportunity for Mercosur member countries to reduce their economic reliance on the United States.

—Valentina Sader

***

On a symbolic level, and perhaps most importantly, the deal demonstrates Europe’s willingness to adapt to an increasingly volatile global economy, the headwinds from US tariffs, and a new China challenge in critical sectors. For those in Brussels who call for the EU to stand more on its own footing economically, this is a strategic win. Moreover, if EU leaders had once again failed to reach internal consensus on the deal, it could very well have closed the door to any future deal with Mercosur and proven correct Washington’s doubts about Europe’s ability to act decisively on the world stage.

—Jörn Fleck

The post The EU and Mercosur are creating one of the world’s largest free trade areas. What’s next? appeared first on Atlantic Council.

Bottom lines up front

• Venezuela’s new acting president, Delcy Rodríguez, must satisfy Washington’s demands while maintaining sufficient support among the Venezuelan elite to avoid a regime fracture.
• Rodríguez’s most complex challenge will be managing Venezuela’s deep entanglements with Russia, China, Iran, and Cuba as the Trump administration demands that the regime cut ties to those countries.
• Venezuela’s long-repressed civil society will need to work to remain relevant amid a power transition dominated by US economic interests and the regime’s factional politics.

The United States’ extraction of Venezuelan leader Nicolás Maduro from his bunker on January 3 triggered an explosion of activity across Venezuelan social media. Across Instagram, TikTok, and WhatsApp status updates, millions of Venezuelans shared jubilant reactions to images of the former dictator in custody. Venezuelan diaspora communities from Buenos Aires to Madrid posted celebratory videos, while domestic users circumvented internet restrictions to express relief and hope.

The regime’s communication apparatus—typically one of its most formidable weapons—collapsed during the crucial first fifteen hours following the operation. Targeted strikes on antennas disrupted the radio communications of the security forces, while an electricity outage impacted the area around the Fuerte Tiuna Army Base. However, internet and phone communications continued to function normally. State TV and radio stations were broadcasting prerecorded programming rather than providing critical news coverage. Chavismo took refuge on Telegram channels and groups.

When government communications finally resumed, conflicting statements revealed chaos within the regime. Late on January 3, former Vice President Delcy Rodríguez proclaimed Maduro “the only president of Venezuela” and demanded his release while simultaneously assuming the role of acting president. In contrast, US President Donald Trump claimed that she was cooperating with his administration and was willing to fulfill all his requests regarding the US takeover of the Venezuelan oil industry. This dissonance highlighted the regime’s turmoil, torn between defiant rhetoric for domestic audiences and pliant negotiations with Washington.

The regime’s double game

Hours after Maduro’s removal, María Corina Machado, the leader of Venezuela’s democratic opposition movement, whose candidate won 67 percent of the vote according to tallies from the stolen 2024 election, declared on social media “Venezuelans, the HOUR OF FREEDOM has arrived!” However, despite her overwhelming popular legitimacy and moral authority, she operates under the constraints of surveillance and repression. The opposition’s mobilization capacity remains uncertain, as the Maduro regime’s systematic repression has crushed the country’s civil society.

For her part, Rodríguez confronts an unprecedented challenge for a Venezuelan leader: She must satisfy Washington’s demands while maintaining sufficient Chavista coalition support to prevent an internal fracture or a military coup. The Trump administration demands sufficient cooperation to enable US oil company operations, likely including transparent property contracts and regulatory stability—precisely the institutional environment that Chavismo systematically dismantled. Rodríguez making such an agreement with Trump would alienate the regime’s hardliners, who would view her accommodation as a betrayal. Thus, Rodríguez may be unable to guarantee the stability required for the business operations Trump wants to run in Venezuela.

Her public contradictions reflect this impossible position. In her first televised addresses as interim president, she demanded Maduro’s immediate release to demonstrate loyalty to domestic audiences. Less than twenty-four hours later, however, she declared it a priority to move toward a “balanced and respectful” economic cooperation between the United States and Venezuela.

This double game cannot persist indefinitely. Rodríguez must choose between accommodating Trump’s demands or preserving Chavista unity. Trump’s threat that if Rodríguez “doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro” makes clear that there will be consequences of noncompliance. Purging the hardliners may be Rodríguez’s best option.

Navigating the geopolitical minefield

Perhaps Rodríguez’s most complex challenge is managing Venezuela’s deep entanglements with China, Russia, Iran, and Cuba while simultaneously partnering with the Trump administration. This is especially the case after the Trump administration demanded that Venezuela immediately cut ties and cease intelligence cooperation with Russia, China, Iran, and Cuba. These relationships represent more than diplomatic alignments—they constitute binding financial obligations, operational dependencies, and strategic commitments that cannot simply be abandoned without triggering massive economic and security consequences.

China presents the most significant financial exposure. Venezuela owes Beijing around twenty billion dollars in loans. These debts are secured through oil-for-loan arrangements that require repayment through crude deliveries, with China currently absorbing more than half of Venezuela’s oil exports (approximately 746,000 barrels per day in November 2025).  

Beyond petroleum, Chinese state enterprises control critical Venezuelan infrastructure. Huawei built and maintains control over Venezuela’s national fiber-optic backbone. China Electronics Import & Export Corporation built and operates the VEN911 surveillance system. ZTE Corporation designed the Homeland Card system and operationalized the Patria System database used for social control. These companies don’t simply provide services—they embed operational control within Venezuela’s digital infrastructure, creating dependencies that cannot be severed without system collapse. Expelling Chinese technology companies would require the complete reconstruction of Venezuela’s telecommunications and surveillance systems.  

Russia’s Strategic Partnership Treaty with Venezuela, signed in May 2025, commits Caracas to comprehensive cooperation with Moscow across the hydrocarbons, military technology, and strategic sectors. Russia is Venezuela’s primary supplier of naphtha and diluents—essential additives for processing Venezuela’s heavy crude. These Russian commitments create immediate conflicts with a potential US partnership, as the Trump administration’s demands make clear. The energy deal announced by the Trump administration on January 7 indicates that US diluent will be sent to Venezuela, meaning that Russia will have to withdraw from that market.

Iran provides Venezuela’s most operationally sensitive international cooperation—drone technology production at El Libertador Air Base, where Iranian personnel set up operations. On December 30, 2025, the US Treasury imposed sanctions on Empresa Aeronautica Nacional SA, the Venezuelan company operating in a joint venture with Iranian companies at drone manufacturing facilities in Venezuela. This military-technical cooperation directly threatens US interests and almost certainly constitutes a nonnegotiable red line for Washington.

Cutting ties with Cuba would resent the deepest ideological and operational challenge for the regime. Cuban intelligence advisors remain embedded throughout Venezuelan security services despite the neutralization of Maduro’s personal protection unit. These advisors provide counterintelligence expertise, interrogation training, and repression coordination—exactly the capabilities Rodríguez needs to maintain internal control against potential coup attempts. Cuba’s own survival depends on Venezuelan oil shipments, with Havana receiving subsidized petroleum. Severing Cuban intelligence cooperation would affect operational expertise within the security forces, potentially triggering a military fracture. Yet Washington has demanded the immediate severance of Venezuela’s ties to Cuban intelligence. Moreover, on January 3, US Secretary of State Marco Rubio issued a warning to the Cuban leadership: “If I lived in Havana and was part of the government, I’d be at least a little concerned.” He also emphasized that Cuba would no longer receive oil from Venezuela.

Democracy deferred

Each day of ambiguity increases pressure from all directions, making Rodríguez’s balancing act increasingly untenable. There are three competing scenarios: First, Rodríguez could successfully navigate between Washington and Chavismo. Second, hardliners could resist accommodation with the United States, triggering Trump’s threatened “second wave” operation. Third, a rebellion could replace Chavista leadership, opening the door to a transition.

Amid this uncertain picture, Venezuelan civil society, having demonstrated extraordinary resilience through the October 2023 primary elections and the July 2024 presidential campaign despite systematic repression, now confronts a different challenge. It must fight to remain relevant amid a power transition dominated by US economic interests and Chavista factional negotiations. In the days following Maduro’s capture, a clear priority has emerged for Venezuelan civil society: the total liberation of all the regime’s political prisoners, who currently number nearly one thousand. Only then will Venezuela’s transition to democracy truly begin.

The post Delcy Rodríguez’s untenable balancing act appeared first on Atlantic Council.

Bottom lines up front

• A Trump-promised renaissance for Venezuelan oil and gas will be difficult to achieve.
• International oil companies are unlikely to make major new investments in the country without greater legal and regulatory certainty, but it may be possible to modestly raise production through immediate steps.
• Without real change from within, the Venezuelan industry will not be able to support the survival of the current regime or address entrenched humanitarian problems.

Within hours of the astonishing US intervention in Caracas this past weekend that captured Venezuelan strongman Nicolás Maduro, the Trump administration framed it as, among other things, a boon to its US “energy dominance” agenda. Citing Venezuela’s vast hydrocarbon resources—arguably the largest oil reserves in the world—President Donald Trump repeatedly promised that the next phase for Venezuela will involve US energy companies helping to restore the country’s failing oil and gas production, benefiting global oil markets with expanded supply. 

But the pathway from promises to meaningful production increases is likely to be a fraught one. The Trump administration seems to recognize this, as indicated by the administration seizing two oil tankers and quickly announcing an opaque arrangement wherein the United States will acquire thirty-to-fifty million barrels of already available Venezuelan crude oil. These fast wins might help justify the expenditure of US resources to continue its naval blockade and pursue further intervention, as the administration has hinted. But these moves do not fundamentally change the dynamics above or below the ground that have wrecked the Venezuelan industry. Nor do they alter the long path to a major recovery.

Indeed, a Venezuelan oil and gas production renaissance would require, among other factors, meaningful renewed interest and investment from US and international oil companies (IOCs). This will be difficult. As the Venezuelan people look ahead to a murky future and an uncertain US-led transition, leveraging their valuable energy resources to secure the country’s democratic future may prove easier said than done. 

How an industry fell apart

Decades ago, Venezuela’s oil and gas industry was a powerhouse that promised to drive the country forward. The country boasts 17 percent of global oil reserves, with an estimated 303 billion barrels of producible crude oil. In 2000, Venezuelan oil production reached a peak of 3.2 million barrels per day, enabled by joint ventures and effective partnerships between the national oil company Petróleos de Venezuela, SA, or PDVSA, and a host of IOCs.

In the early 2000s, however, the Chávez administration oversaw a nationalization of the Venezuelan oil sector that dramatically changed the terms of engagement for foreign companies. The nationalization resulted in asset seizures, international arbitration, and marked investment decline in Venezuela’s oil-producing regions by most Western companies. Following Chávez’s administration, Maduro and his officials then faced a punishing and ever-accelerating slate of US sanctions. Beginning in 2017, the first Trump administration targeted Venezuela’s oil and gas sector as the primary engine for the Maduro regime’s deepening authoritarianism.

Today, Venezuela’s oil and gas industry is in disarray. Production fluctuates below one million barrels per day, while the wider industry reels from years of underinvestment, neglect, lack of maintenance, and limited access to the engineering and technological prowess of Western IOCs. Improving this situation will require a sea change both for the Venezuelan oil and gas industry and its governing institutions; the former cannot proceed without the latter. By extension, the next steps taken by the country’s remnant Maduro-era leadership, the Trump administration, and the Venezuelan democratic opposition movement are of paramount importance to the future of the country’s energy industry. 

A stable, secure transition

The ideal first step in returning Venezuela’s industry to its former heights would be enabling a democratic transition, leading to a government that would then pass new legislation, revamp supervisory institutions, and operate in accordance with the rule of law. As of now, however, it is unclear that such a transition is the goal of either the Trump administration or Venezuela’s remaining powerbrokers. 

This concern is not a matter of idealism but rather of hard business realities. For any major corporation to engage in a foreign industry, especially in the oil and gas sector, that corporation must know who it is negotiating with. Contract designs and terms can vary considerably, but they must be developed by reliable partners who each understand the other’s roles and responsibilities. After all, a major factor that presaged the decline of Western companies’ engagement with Venezuela (and jump into arbitration proceedings) was Caracas’s reneging on contracts governing how the Venezuelan oil and gas assets were managed in terms of investment and eventual profits. Under the framework in place today, PDVSA has a majority stake in joint ventures. But in its bankrupt condition, it would be impossible for it to meet its capital commitment for nearly any project.

At this stage, it remains unclear who is actually in control of Venezuela and for how long. The Trump administration has indicated, for example, that the United States will remain in control of Venezuelan oil and gas assets for the foreseeable future, perhaps adjusting US licensing and sanctions policy to legitimize US-controlled sales of oil stored in tankers. It’s unclear how willing the Venezuelan regime will be to tolerate this. Moreover, US control is necessarily a short-term strategy. Selling off Venezuela oil stored in tankers and depositing those funds into blocked accounts controlled by the US government will avoid forcing PDVSA to shut in existing production, ensure useful supply to US Gulf Coast refiners, and provide the US government with a significant supply of funds it can manage. But volumes of floating storage are finite, and the Rodríguez government will not remain in power if it seems to be agreeing to sell off the government’s primary source of funds for the sole benefit of the United States or American creditors. 

In addition to legal considerations, the physical risk and security outlook is crucial for any industry that requires intensive on-site, day-to-day operations. These operations must be managed by crews of skilled laborers, geologists, and engineers, to say nothing of the initial construction teams and costly repairs that will be necessary throughout Venezuela’s oil and gas regions. The Trump administration has yet to detail its plan for Venezuela’s transition process apart from the acceptance of Delcy Rodríguez, Maduro’s former vice president, as the acting president. But even as Trump praised Rodríguez on Saturday, he also warned her that a failure to cooperate with a US-led transition could result in another action from US forces. 

Meanwhile, the democratic Venezuelan opposition, led by María Corina Machado, has found its role and potential future influence downplayed, with Trump saying that her movement lacks sufficient legitimacy among the Venezuelan people to be a realistic alternative. Yet another factor is the vast, complex networks of substate and illicit organizations—including violent militias and their overlords—that operate freely throughout Venezuela, have their own assets to protect, and will assuredly have opinions on who should run the country. These same stakeholders—and their foreign allies, who include geostrategic adversaries of the United States—may likewise take a dim view of the acting president’s apparent complicity in passing Venezuelan crude oil along to the United States if there are not immediate, tangible benefits for doing so outside of the remnant regime’s top brass. 

Any rational business leadership would think carefully before committing itself to new investment under these conditions. For a genuine oil sector renaissance to commence, the Venezuelan government must prove that it possesses stability, legitimacy, and resilience. US promises that a conciliatory administration in Caracas (for now) can ensure these conditions will be met with justified skepticism. 

Attracting private investment

Regulatory and financial certainty are essential factors for major international oil businesses when making significant investment decisions. This is especially true when oil and gas prices are already soft, at around sixty dollars per barrel, and most outlooks predict a global oversupply throughout the coming year. In other words, for Venezuelan oil and gas investment to make fiscal sense, IOCs will require a return on investment in a reasonable timeframe. Moreover, such businesses will need reasons to believe that long-term engagement (possibly thirty years or longer) in the country will ultimately be profitable based on global oil and gas market outlooks for the next decade or more. 

The United States removing or making major adjustments to existing sanctions on Venezuela will be crucial to expanding oil production over the short run, as well as attracting new large scale private investment to the country. At present, both the Venezuelan government and its oil and gas sector (principally PDVSA) face a punishing tranche of US sanctions that have cut them off from money, credit access, partnerships, and technology essential to running the country’s oil and gas industry. As of now, any transactions between Venezuelan entities and any foreign company are subject to US restrictions, US Treasury sanctions designations, and lost access to the US financial system. This state of affairs makes the immediate reentrance of US or other Western companies impossible.

Ideally, IOCs would like to see a scenario where most sanctions are lifted or significantly eased, along with reassurance that a reversal would not occur anytime soon. In addition, they are looking for a revamped Venezuelan regulatory framework for its energy sector, including changes to regulations governing operations, trading and exports, terms for joint ventures, asset ownership, and legal rights. Lastly, the Trump administration has hinted at measures that would enable the repayment of companies that previously exited the country in compensation for their prior losses.

A revamped licensing process that allows existing investors to expand their operations could potentially lift production by 300,000 barrels a day over the course of a year, industry experts have suggested. Allowing smaller companies to invest in production sharing, including through productive participation contracts, could likewise incentivize participation. These adjustments could enable another 200,000 to 300,000 barrels a day in new production over the course of the next twelve to eighteen months, the industry experts estimate. Funds from that production could go into a blocked account, which would realistically need to be dedicated to humanitarian benefits in Venezuela, with perhaps a share reserved for repayment of US creditors. 

For now, the Trump administration has not signaled that a major softening of the existing sanctions slate is imminent and the oil blockade remains in place. The Rodríguez leadership likewise has not signaled that a reshaping of its oil and gas regulatory framework is incoming at the behest of the United States or anyone else. Instead, the administration’s new plan for selling up to fifty million barrels of Venezuelan crude oil suggests that its focus is on growing near-term, low-hanging fruit production opportunities to prevent the industry from total collapse and shut-in of its existing production.

A positive financial and investment signal might encourage buy-in and engagement from IOCs and smaller companies. One means of doing so would be creating a new escrow account, under US control but presumably with some percentage of profits reverting back to the Venezuelan government. Such a fund could serve as the deposit site for new oil and gas profits over the near-term, ahead of a full lifting of sanctions and/or successful national elections in the future. This account could be enacted through adjustments to the existing sanctions slate, and it could provide a vehicle for early seed funds to be fed into any new Venezuelan governing institutions as a revamped regulatory design is developed. Optimistically, this fund could also serve as a test run for a new sovereign wealth fund, which could help prevent a reversion to the illegitimate use of Venezuela’s resource wealth that had been a hallmark of the Maduro regime.

For now, the Trump administration is hoping that it can deliver a strong enough signal to private oil and gas companies that there can be some compensation and long-term gains to reengagement with Venezuela, if only to enable immediate, easy repairs and infrastructure salvaging. The attractiveness of that offer, and its long-term durability and legality, are yet to be seen. 

However, much more political and regulatory change will be necessary to revive the Venezuelan energy industry. Such changes will be far more difficult to achieve than handshake deals to split revenues for a handful of oil sales; moreover, these modest steps forward are far from sufficient to address the depth of the political challenges ahead. Lifting production in the neighborhood of half-a-million barrels per day might preserve what is left of Venezuelan production capacity, but it will not be enough to keep Maduro’s remnant leadership stable or meet the population’s profound humanitarian and economic needs. As a result, the entrenched challenges of migration, drug and other illicit trafficking, intensified substate violence, and perhaps de facto Balkanization of the country by various strongmen (and their domestic or foreign backers) remain palpable risks. The Trump administration, focused on resource management in Venezuela, has so far shown little interest in resolving these issues. But they will not go away, and they could derail the administration’s vision for a more stable energy industry and country.

The post What it takes to revive Venezuela’s oil and gas industry appeared first on Atlantic Council.

On January 7, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was interviewed in a The New Yorker article titled “The Former Trump Skeptics Getting Behind His War in Venezuela.” He contends that President Trump demonstrated the credibility of US threats through the use of military force, while distinguishing between targeted, limited applications of force and long-term wars.

The post Kroenig interviewed in the New Yorker on military action in Venezuela appeared first on Atlantic Council.

How US trade with Brazil is evolving

In April 2025, US President Donald Trump imposed a 10 percent tariff on Brazil as part of the administration’s “Liberation Day” tariffs on nearly every country in the world. Then in July 2025, Trump imposed an additional 40 percent tariff on Brazil specifically, which further raised tariffs on products not affected by the Trump administration’s other Section 232 duties on certain industrial goods. Our analysis of both US and Brazilian trade data shows that initially, since the implementation of these new tariffs, US imports of Brazilian products have deviated significantly from the pre-tariff trend line. At the same time, US exports to Brazil have remained consistent with the pre-tariff trend line

US purchases of products in which Brazil plays a key role as a supplier have also decreased significantly since the imposition of the new tariffs. Brazil supplied at least 20 percent of US imports for a number of goods in 2024, including coffee, orange juice, cane sugar, iron ore, aluminum oxides and hydroxides, vanadium products, various tropical woods, pig iron, fuel ethanol, meat, and a range of agricultural byproducts.

Our analysis shows that US imports of these products declined dramatically through September 2025; however, as of November 13, 2025, several categories, including coffee, orange juice, and meats, were granted exemptions from both the reciprocal and Brazil-specific tariffs, and we await the release of new trade data to assess the impact of these measures.

What these evolving trade dynamics look like in practice

This section analyzes a subset of specific products for which Brazil is a key supplier to the US market.

The bigger picture

How Brazil’s international trade partners are changing

Since the imposition of new US tariffs on Brazil, Brazil’s export markets have changed significantly, while the source of its imports, particularly from the United States, has remained relatively stable.

The US export market share declined 5.3 percent in October 2025 compared to October 2024, while China’s rose by 5.2 percent. Meanwhile, the US market share of Brazil’s imports grew 1.2 percent year over year in October 2025.

Authors: Ignacio Albe, assistant director, and Valentina Sader, Brazil lead, from the Adrienne Arsht Latin America Center.

Data: All data used in this dashboard can be found here.

The research team would like to thank Apex Brazil, the Brazilian Trade and Investment Agency, for its support for this research project.

New Atlanticist Jul 17, 2025

The numbers that define the US-Brazil trade partnership

By Valentina Sader, Ignacio Albe

The US president has threatened to impose a 50 percent tariff on Brazil in August. Before then, take a deep data dive into the current bilateral trade relationship.

Brazil Economy & Business

New Atlanticist Nov 20, 2025

Dispatch from COP30: In the Brazilian jungle, the private sector takes center stage

By Jorge Gastelumendi

Throughout COP30, there has been a recognition that the public and private sectors cannot act alone when it comes to climate finance.

Brazil Civil Society

Issue Brief Sep 9, 2024

Brazil 2050: A vision for global food security

By Valentina Sader, Peter Engelke

How can the world meet the growing demand for food while also adapting to climate change?

Brazil Latin America

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post US-Brazil trade dashboard appeared first on Atlantic Council.

On January 7, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was interviewed on DW News about the US seizure of a Russian flagged oil tanker carrying Venezuelan oil. He contends that the move signaled US resolve in quarantining the Venezuelan regime and adopting a firmer approach toward Russia in the Western hemisphere.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig on DW News on US oil tanker seizures in the Caribbean appeared first on Atlantic Council.

Bottom lines up front

• The ouster of Nicolás Maduro allows China to blame anything that goes wrong in Venezuela going forward on the United States, as it casts Washington as an unreliable hegemon.
• China was unable to revive Venezuela’s oil industry despite billions in investments, so it’s unclear how US companies will fare.
• Some Chinese observers think Washington just walked into another quagmire on par with Afghanistan.

WASHINGTON—The Trump administration provided quite the welcome-to-2026 jolt with its ouster of Venezuelan strongman Nicolás Maduro. Many US analysts view the move as benefiting the United States at China’s expense, since Beijing had backed Maduro and his predecessor Hugo Chávez to gain access to Venezuela’s oil. But the reality is more complex. 

That relationship wasn’t paying off as well as Beijing had hoped, but it was sticky—there was no easy way for Beijing to extricate itself from Venezuela’s cratering economy or the reputational damage it was incurring over its support for Maduro. So Chinese leaders were staying the course. Now, however, the Trump administration has put another option on the table: China can evade responsibility for anything that goes wrong in Venezuela, since Washington now owns that problem. Moreover, Beijing can portray itself as the more responsible partner to Venezuela’s neighbors, all while maintaining access to Venezuelan oil. That’s a pretty good outcome for Beijing.

Two big factors make this less of a win for the United States—and less of a loss for China—than many analysts realize. 

An oil boom won’t come easy

First, there is a big difference between oil reserves and oil production. Venezuela does have large oil reserves. But bringing them to market is complex. Venezuelan oil is a heavy, sticky crude that is expensive to extract and requires specialized refining. 

China has refineries set up to process it. But Venezuelan exports never reached the heights Beijing had hoped for. The Venezuelan military manages the nation’s state-run oil company, Petróleos de Venezuela, S.A., or PDVSA. That management has been less than stellar. Despite the nation’s immense reserves, Venezuela’s oil exports went into a nose-dive about a decade ago due to mismanagement in an era of declining oil prices. Those exports still haven’t recovered to previous highs. When China first began signing deals with Venezuela in the mid-2000s, the nation was producing around two million barrels of crude oil per day. Given the nation’s reserves, Beijing had high hopes for growth on that output. Instead, at year-end 2025, Venezuela’s strongest production was only around 900,000 barrels per day. That is nowhere near the big leagues. On Venezuela’s best day in 2025, for example, it produced less than one fourth of the crude oil coming out of China—and less than one fifth of the crude coming out of Texas. Oil accounts for around 18 percent of China’s energy consumption, and only 4-8 percent of that (depending on the day) comes from Venezuela.

To be sure, as long as it was sanctioned, Venezuelan oil was extra cheap, and Beijing was not going to walk away from cheap oil that it had already paid for via earlier loans to Caracas. But this relationship was nowhere near an energy supply game-changer for Beijing.

President Donald Trump appears to assume that US oil majors will walk in and turn this around. On January 3, he said, “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.” But the nation’s oil sector is a mess. Restoring production to pre-Chávez levels is, at best, a one-to-two decade project. And China has already tried to do just that: It poured in billions of dollars and sent in its own oil companies (which are very good at operating in risky environments). Exports still declined. 

There is a lot of confusion around exactly how much money Beijing has poured into Venezuela and exactly how much Venezuela has paid back via oil shipments. Those transactions are often nontransparent by design. The best estimates are that China provided around sixty billion dollars in official government-to-government loans, and around a hundred billion dollars in total when all Chinese investments in the nation are included. The thing is, Venezuela has just about paid that all back, because it paid in oil, and the oil kept flowing, albeit never at the levels Beijing was hoping for. The best estimates are that Venezuela currently owes Beijing around ten billion dollars to fifteen billion dollars in remaining oil shipments. Even if China gets nothing else, it is not exactly walking away empty handed, particularly given that much of that oil shipped at rock-bottom prices. It could be that Beijing is offloading a declining asset at an opportune time.

China may be dodging a quagmire

The second big factor that complicates this picture: Venezuela itself. The country’s future is uncertain, and its economy is heavily dependent on oil production, which is faltering. It is not yet clear who in Venezuela will have political legitimacy when the United States retreats. From a diplomatic perspective, until January 3 this was Beijing’s mess to deal with. China supported Maduro despite the fact that all evidence pointed to him losing the last election. That support was an albatross around Beijing’s neck across the region. China wants to be seen as Latin America’s preferred economic partner, but that argument is hard to make when your biggest debtor is barely functioning economically and lost support politically, as demonstrated when Maduro falsely claimed victory and hung on to power after losing the last election. The United States has taken this challenge out of China’s hands. Now, whatever goes wrong in Venezuela, China can blame it on Washington. 

China also appears eager to use this incident to paint the United States as a disruptor and a bully, in keeping with its longstanding characterization of Washington as a hypocrite when it comes to the rules-based order. That carefully crafted narrative is designed to give Beijing a free pass when it violates international rules and norms, which it does on a regular basis. 

On Monday, Chinese President Xi Jinping stated that “unilateral and bullying acts are dealing a serious blow to the international order.” China’s state-run Xinhua News Agency called the United States “the blatant violator” and published a cartoon image of Lady Liberty surrounded by burning oil cans, stomping on “international law” and “national sovereignty.” Beijing may view the narrative fodder it gains from the US move as well worth forfeiting the oil shipments it has not yet received from Venezuela.

For the most part, China has not spent any real political capital to push back against the US action. Instead, Beijing is keeping its close diplomatic ties to the regime and mostly letting things play out—while voicing complaints here and there—to see how it might benefit. Some Chinese observers appear to think the United States is walking into a quagmire that will keep Washington tied up (and out of China’s way) for decades.

Hu Xijin, a popular Chinese commentator who formerly served as editor-in-chief of the nationalistic Global Times and has more than twenty million followers on Weibo, is a case in point. He recently stated that “it’s very likely that Venezuela will be more expensive than Afghanistan” and “Trump’s arrest of Maduro is tantamount to making a promise that the United States will be responsible for Venezuela’s democratic prosperity to the end.” China should know just how expensive bailing out Venezuela will be, given that it already spent around one hundred billion dollars on that project.

Perhaps the worst case for Beijing is that it does not get any more oil out of Venezuela, but it successfully offloads a declining asset. Chinese leaders are likely thinking that they may get the oil anyway. Trump has stated that he plans to keep the oil flowing to Venezuela’s current buyers, including China. If that does occur, if the United States does step up to the plate to pour billions into Venezuela’s oil sector and a good portion of that oil goes to China, then this could be Beijing’s best chance at actually recouping the remaining balance on some of its earlier investments. That is not exactly a bad deal for China. But for Washington, it is not at all clear where this ends up, or how many billions this project will consume. Washington may find itself carrying the same albatross that China just offloaded.

The post Why Maduro’s removal could ultimately benefit China appeared first on Atlantic Council.

On January 6, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig wrote an article in the New York Times titled “Trump Was Right to Oust Maduro.” He argues that Maduro threatened vital US security interests, and that his removal from power creates opportunity for better governance in Venezuela.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig featured in the New York Times on ousting Maduro appeared first on Atlantic Council.

On January 5, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was quoted in Politico’s “National Security Daily” on the Trump administration’s Venezuela policy. He explains that administration’s ambiguity is intentional and aimed at preventing fractures within the Republican party.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig quoted in Politico on US policy in Venezuela appeared first on Atlantic Council.

Bottom lines up front

• The biggest gamble of this weekend was the Trump administration blessing Delcy Rodríguez, who is closely tied to the Maduro regime, to run the country.
• The administration should continue to press for free and fair elections, so the Venezuelan people decide their next leader.
• In the interim, the administration must set clear, enforceable benchmarks for Rodríguez when it comes to the economy, security, and foreign influence.

WASHINGTON—The big surprise in Saturday’s stealth operation to bring Venezuelan dictator Nicolás Maduro to justice was not the success of the mission or the fact that US President Donald Trump approved the operation. The elite Delta Force commandos are some of the best trained in the world, and the overall precision of the mission demonstrated US military might yet again. For his part, Trump has wanted to see Maduro go dating back to his first term, when he led a coalition of countries recognizing an interim government. 

Nor was it a surprise that the country has been relatively calm since Maduro’s exit. Venezuela is not a powder keg. And Venezuelans didn’t flood the streets in celebration for fear of reprisal from security forces and Chavista-aligned paramilitary forces known as colectivos. Instead, Venezuelans flocked to the supermarkets to stock up—actions that again cast light on the economic suffering of the people in a country with an annual inflation rate over 500 percent and where 90 percent of the population lives below the poverty line.  

Rather, what surprised some observers was the big gamble the Trump administration is making by giving Delcy Rodríguez, Maduro’s vice president and longtime Chavista loyalist, its blessing to run the country in the interim. Trump called her “gracious” in his press conference on Saturday. As for the leader of the Venezuelan opposition, Trump said María Corina Machado “doesn’t have the support within or the respect within the country.” There was no mention of the July 2024 election in which Machado was barred from running but then led the campaign of Edmundo González, who went on to win around 67 percent of the vote. This decision reinforced the strategic focus of phase one of the US mission.

How to explain this surprise? The administration is making what it sees as a strategic short-term bet on Rodríguez. Support remains strong for the Machado-led opposition with key US House Republicans forcefully voicing their support for her since the operation. Secretary of State Marco Rubio expressed “tremendous admiration” for Machado on Sunday, but he refused to endorse her or explicitly speak about a transition to democracy. Thus far, it appears that the opposition’s path to power rests on competing in yet another election. Yet that effort is doomed to fail unless the next election is different from all the previous ones under Maduro.

Rubio’s answer on the prospect for a transition to democracy was that “these things take time. There’s a process.” According to article 234 of the Venezuelan constitution, Rodríguez—who was officially sworn in on Monday—can serve ninety days as acting president, followed by an additional ninety days if approved by the Chavista-controlled National Assembly. Then the Assembly can declare an absolute absence of the presidency, triggering elections within thirty days. So, expect elections to be called within six months, if the regime is following the letter of the constitution. But so far the Venezuelan Supreme Court has danced around the many constitutional provisions around Rodríguez’s appointment, saying it was due to “circumstances not explicitly provided for in the Constitution.” A similar tactic of seeking to bypass established timetables was also used over a decade ago when former leader Hugo Chávez was dying.

With all this ambiguity, when the time is ready, what can the United States do to ensure elections are actually free, fair, and transparent, and that all candidates (including Machado) can run? 

Thus far, the administration has shown little interest for elections in its public statements. That makes sense in the short run. This is an operation with a focus on transactional pragmatic realism. But elections will eventually be necessary to give political certainty to not only the Venezuelan people but also the foreign investors Venezuela badly needs. At that time, US pressure will be needed so Venezuela does not risk a dangerous repeat of previous elections—contests held in name only, without any real chance for non-Chavista-aligned politicians to officially win and assume power. 

Rubio was right that there is a process that needs to occur. Venezuela has not seen a free and fair election this century. Staging one will require a number of factors: allowing all candidates to run, permitting airtime in the media, guaranteeing the safety of candidates, ensuring that voters are not intimidated at the ballot box, verifying that votes are not manipulated, and, of course, counting the votes accurately. An election under these conditions would give a significant advantage to opposition forces, who have proved they can win even under adverse conditions.

Given the dismal state of the country, the immediate US agenda has focused on strategic rather than political priorities. In media interviews on Sunday, Rubio clarified Trump’s statement that the United States would “run” Venezuela by laying out the terms that the administration wants: an oil industry that benefits US interests and the Venezuelan people, an end to drug trafficking, the removal of the Colombian criminal groups known as the FARC and ELN, and a country that “no longer [cozies] up to Hezbollah and Iran in our own hemisphere.” So, economic interests, security priorities, and stamping out foreign influence—all priorities laid out in the new National Security Strategy. Rather than running the country in the manner of an occupation, Rubio said on Sunday: “What we are running is the direction that this is going to move moving forward, and that is we have leverage.”

Trump has repeatedly threatened continued US military action—even warning of harsher actions—if Rodríguez does not comply with US demands. But we have learned time and time again that the Venezuelan regime cannot be trusted. Words don’t matter; actions do. And domestically, Rodríguez will seek to avoid being seen as too closely aligned with US interests to ensure her continued support among regime loyalists. That was clear in her combative comments on Saturday, shortly after the operation. Most likely, she will seek to walk a political tightrope to avoid being—at least for now—in the United States’ crosshairs. That much was evident with her Sunday statement where she pledged to “extend an invitation to the U.S. government to work together on a cooperation agenda.”

The Trump administration thus needs to establish specific benchmarks—incremental steps and final results—that the regime needs to meet when it comes to the economy, security, and foreign influence. The United States must set a timeline for compliance—and refuse to tolerate any attempts by Rodríguez to delay. 

In addition to eventual elections, the Trump administration should pressure the Venezuelan regime to show it does intend to cooperate. One place to start is releasing wrongfully detained Americans from Venezuelan jails and freeing all political prisoners. But it also means means making concrete progress on key economic and security priorities such as:

• Resolving cases involving the oil assets expropriated by Hugo Chávez in 2007; 
• Advancing a new hydrocarbons framework that allows oil companies to be able to operate in Venezuela either without the national oil company PDVSA as a partner or with a foreign company as the majority partner; 
• Ensuring that foreign investments are respected; 
• Clamping down on armed groups in the country and their myriad illicit activities, rooting out the strong linkages between these groups and the regime as well as foreign adversaries; and
• Cracking down on illicit narcotics flows.

This past weekend’s mission went entirely according to plan. But the United States is now forced to depend on the remnants of the Maduro regime for the next stage in the mission. That will be a much harder task. Ultimately, what’s needed in Venezuela is a partner government that allows for the freedom of its people, respects foreign investment, and that advances US and Venezuelan security and economic interests.

The post Now comes the hard part: What Trump should do next to secure Venezuela’s democratic future appeared first on Atlantic Council.

Bottom lines up front

• In responding to recent rhetoric from the White House about “taking” Greenland, European leaders need to look beyond the legal infeasibility.
• The White House is correct that Greenland and the waters around it are a strategic asset—one that Europe has failed to recognize in recent years.
• If Europe wants to ensure that no outside power can exercise control over Greenland, then it must expand its military presence in the region.

WASHINGTON—The Trump administration’s resolute handling of Venezuela—framed unapologetically in terms of strategic necessity—has once again revived an idea many Europeans hoped had been buried: that the United States should “take” Greenland.

European capitals reacted, again, in a familiar way: with statements of concern and invocations of international law. That reflex may be understandable. But it is also revealing. Because if Europe’s response to US power politics is limited to declaring what is not allowed, it should not be surprised when its voice carries little weight in the new era of transactional power politics.  

Trump’s rhetoric about “taking” Greenland is neither new nor legally plausible. Greenland is an autonomous territory within the Kingdom of Denmark, embedded in NATO and protected by international law. There is no legitimate pathway for a Venezuela-style intervention in the Arctic. But legality alone does not create security. And Europe should be careful not to mistake moral clarity for strategic engagement.

The real lesson of Venezuela is that the Trump administration acts where it believes control is feasible, resistance manageable, and alternatives absent. If Europe wants to ensure that no outside power—not the United States, not Russia, not China—can credibly contemplate coercive leverage over Greenland, then it must focus less on protest and more on its own strategic steps.

Why Greenland matters

From Washington’s perspective, Greenland is a strategic asset. Its location astride the Greenland–Iceland–UK (GIUK) Gap makes it central to monitoring Russian—and, potentially, soon Chinese—submarines entering the Atlantic. Early-warning and missile-tracking radar systems stationed in Greenland feed directly into US homeland defense. Beyond that, Greenland is emerging as a critical node in satellite command and control, space domain awareness, and satellite tracking. Its geography allows for satellite ground stations and secure communications infrastructure that are increasingly vital as rivals develop counter-space and cyber capabilities.

That logic explains why in June 2025, the Trump administration shifted Greenland from US European Command to Northern Command. It reflects a broader view of the island as part of the emerging great-power contest in the Arctic—a contest in which Russia has already built a formidable Arctic military posture and China is positioning itself for long-term influence as a self-declared “near-Arctic state.” And Moscow and Beijing are increasingly cooperating on the development of the Northern Sea Route, which will allow for a shorter dual-use shipping route between Europe and Asia.

A new Arctic contest

Europe’s problem is not that Washington sees Greenland as a strategic asset. It is that Europe has largely failed to do so itself.

For decades, Greenland was treated as a political sensitivity rather than a strategic priority. That complacency is now dangerous. In an era of renewed power competition, territory that is weakly defended, lightly governed, or externally dependent invites pressure, regardless of legal status.

There are encouraging signs that this is beginning to change. European actors are investing in satellite communications infrastructure in Greenland to reduce overreliance on Norway’s Svalbard island and harden resilience against interference. Denmark is increasing Arctic defense spending and discussing the deployment of new capabilities in Greenland. These steps matter, but they remain too slow, too fragmented, and too cautious.

What Europe lacks is not awareness but resolve. If the objective is to make coercion impossible rather than merely illegal, then Europe must ensure that Greenland is visibly defended, deeply integrated into European security planning, and politically anchored in transatlantic cooperation.

Making Greenland unassailable

That means a sustained European presence capable of monitoring the GIUK gap, protecting critical and space infrastructure, and denying Russia and China the ability to encroach further on the Arctic region. This cannot be achieved through episodic engagement. It requires a calculated long-term commitment.

Paradoxically, this is also the most effective way to deal with the Trump administration. The US president is unlikely to be restrained by lectures on international law. But he does respond to strength, clarity, and facts on the ground. A Europe that treats Greenland as central to its own security, rather than as a liability to be explained away, can shift the Trump administration’s fixation on acquiring Greenland toward cooperating on Greenland’s security.

Greenland is not for sale. But neither should it be left exposed to a power vacuum. If Europe wants to ensure that no one can do to Greenland what the United States did in Venezuela, then it must stop relying on rules alone and start building the strategic reality that makes coercion unthinkable.

The post Greenland is Europe’s strategic blind spot—and its responsibility appeared first on Atlantic Council.

Bottom lines up front

• The recent US capture of Venezuelan strongman Nicolás Maduro is consistent with the Trump administration’s new National Security Strategy.
• While the new strategy is primarily about narrowing and prioritizing US objectives globally, it is also committed to an expansive vision of US interests in the Western Hemisphere.
• The White House should next expand its concept of “hemispheric defense” and increase its military presence, further reducing Chinese, Russian, and Iranian influence in the hemisphere.

WASHINGTON—The daring US operation that captured Venezuelan dictator Nicolás Maduro and transported him to the United States to stand trial for his crimes signals a dramatic shift in US foreign policy, with implications far beyond Venezuela. The Trump administration’s decision to depose the Maduro regime is the embodiment of its recent National Security Strategy (NSS), which prioritized the defense of the US homeland and the Western Hemisphere.

While most National Security Strategies are quickly forgotten, both of Trump’s strategies have served as reliable guides to his approach to foreign affairs. His 2017 NSS announced a US focus on great-power competition, principally with China, and heralded an important shift of the United States’ attention after decades of Middle Eastern preoccupation. The president’s 2025 NSS, released in December, set about prioritizing US security interests globally and identified protection of US territory and the Western Hemisphere as the central tasks of US foreign policy. Importantly, the NSS also carved out a “Trump Corollary” to the Monroe Doctrine, citing malign activity by “extra-hemispheric powers” as a serious threat to US national security.

As such, the recent Venezuela operation should be understood as of a piece with the president’s earlier focus on acquiring Greenland, his calls for resuming US control over the Panama Canal, and his interest in stemming the flow of narcotics trafficking and illegal migration in the hemisphere. In each instance, extra-hemispheric influence has played a significant role in galvanizing Washington’s concern: Chinese outfits own key facilities along the canal. Russia and China conduct military activity near Greenland and in the High North. And Beijing, Moscow, and Tehran hold long-standing influence in Caracas. With the Maduro capture, Washington is sending a powerful signal that it is taking the NSS seriously, and that it is prepared to act swiftly to enforce the Trump Corollary.

Beijing’s ambitions in the Western Hemisphere have long been a concern for Washington, but recent trends are particularly alarming. In late December, reports emerged that China’s People’s Liberation Army was conducting war games simulating combat in the Western Hemisphere. This news came shortly after Beijing published an official strategy for Latin America that takes an increasingly belligerent tone in asserting its regional interests there. China actively supports the destabilizing Cuban regime, including by maintaining a surveillance post on the island just ninety miles from US territory. With Beijing increasing its efforts to extend coercive economic diplomacy across the hemisphere and its public interest in West African naval access fronting the Atlantic Ocean, the Trump Corollary seems poised to clash with China’s strategic posture.

The sheer number of potential flashpoints between the United States and great-power rivals such as China under the rubric of the Trump Corollary demonstrates an important point about the administration’s strategy: While the new NSS is primarily a document about narrowing and prioritizing US objectives globally, with a lesser focus on Europe and the Middle East, it is wholly committed to an expansive vision of US interests in the Western Hemisphere. This is likely to lead to near-term adjustments to US policy, with the goal of better operationalizing the Trump Corollary to address the hemispheric challenges facing the United States.

Here are three areas to watch in the coming months.

First, under the rubric of “hemispheric defense” that guided US security strategy in the hemisphere for decades, the Trump administration should expand the geographic definition of the hemisphere for the purpose of applying the Monroe Doctrine and the Trump Corollary. By stating unambiguously that the hemisphere is broadly defined as the Aleutian Islands to Greenland and the North American Arctic to Antarctica—with Central and South America and the Caribbean in between and the Pacific and Atlantic approaches to the hemisphere included—the administration could effectively place the region in lockdown, preventing encroachment by China, Russia, and Iran.

Second, to operationalize hemispheric defense going forward, the administration should expand the rotational and permanent deployment of US land, naval, Coast Guard, and air assets in the hemisphere. As the Trump administration works to reposition US forces from legacy bases in Europe and the Middle East, it could simultaneously expand or reopen US facilities in Puerto Rico and the US Virgin Islands. It could also seek to establish or expand rotational or permanent access agreements with US partners such as El Salvador, Ecuador, the Dutch Caribbean islands of Aruba and Curaçao, Guyana, Trinidad and Tobago, and others.

Beyond these countries, Washington could seek a more expansive agreement with Costa Rica, which lacks a permanent military and currently allows the US military access on a case-by-case basis. A new agreement with Costa Rica could look like the comprehensive defense arrangements the United States enjoys with Pacific Island partners such as the Marshall Islands, Palau, and Micronesia. Similarly, as the administration explores its options for a broader political solution to the president’s desire to acquire Greenland, the United States could request expanded access to the island under the 1951 defense agreement and begin prepositioning anti-submarine warfare and Arctic training assets there to counter Chinese and Russian malign activity in the High North.

Third, the administration can begin leveraging such force posture changes to actively deter malign activity and advance US interests in the hemisphere. Greater US forward presence in the region would, among other outcomes, help deter Chinese and Russian collaboration with the Cuban regime, which has spread chaos and destabilization across Latin America for decades. Expanding the US presence in Costa Rica and the Dutch Caribbean would help ensure access to the Panama Canal while the administration seeks broader solutions to Chinese influence. A stronger US Coast Guard and naval presence in the Caribbean would help combat narcotics trafficking and illegal migration that pose a direct threat to the US homeland. Further north, increasing US assets in Greenland would contribute to Arctic security.

While the administration’s actions in Venezuela have shocked the world and sent a strong message to US rivals in Beijing, Moscow, Havana, and Tehran, they are likely only the starting point for a longer-term and more comprehensive reappraisal of US core interests in the hemisphere and the means to achieve them. The Trump administration has a unique opportunity, built around its NSS and its audacious Venezuela operation, to reimagine the contours of US hemispheric defense for years to come.

The post The Trump Corollary is officially in effect appeared first on Atlantic Council.

Bottom lines up front

• The US operation in Venezuela reduced Russian President Vladimir Putin to bluster, because the war in Ukraine is Moscow’s priority and its military has little ability to project power.
• As Ukraine peace negotiations continue, Putin will avoid doing anything to provoke Trump over Venezuela.
• If oil prices come down because of US actions in Venezuela, it will only weaken Russia further.

WASHINGTON—The Trump administration’s bold operation on January 3 meant the end of the Maduro dictatorship, but it was also another blow to Moscow’s political prestige. It is the second time since President Donald Trump returned to the White House that he demonstrated the United States could act against a Kremlin ally with impunity. When the United States delivered a massive blow to Iran’s nuclear program this past June, Putin could offer little effective support. The Russian president was reduced to bluster, just as he is now. 

As US pressure on Venezuela began to build in the fall, Venezuelan strongman Nicolás Maduro was hoping for tangible support from Moscow. According to The Washington Post, he wrote to Putin in October asking for drones, missiles, and radars. His request was not met.

Putin himself has not commented yet on the US operation in Venezuela, but Russian Foreign Minister Sergey Lavrov phoned acting Venezuelan President Delcy Rodríguez on Saturday to express “strong solidarity” with the government, and the Russian foreign ministry publicly demanded that the United States release Maduro. That’s it.

Limits on Russian capabilities explain much of this muted response. Russia may be a nuclear superpower, but its conventional military has limited ability to project power and, as its problem-plagued war on Ukraine has demonstrated, is characterized by clear weaknesses when fighting near home. Indeed, Putin’s aggression in Ukraine is his overwhelming priority, and it has stretched, if not exhausted, his military and greatly weakened Russia’s economy. Simply put, the Russian president does not have the resources for further foreign adventures, a fact noted by some of the Russian voenkory, or war bloggers on Telegram. That was evident even before Trump’s second term as Moscow watched in late 2024 as its half-century alliance with the Assad regime in Syria collapsed when Islamic rebels took control.

But these material limits are not the only factors driving Kremlin policy. There is also the question of Putin’s approach to managing Trump’s efforts to achieve a durable peace ending Russian aggression in Ukraine. Trump has said multiple times that in order to establish this peace, he would put major pressure on the side unwilling to make peace. Kyiv has said yes to numerous US proposals to end the fighting, and Moscow has rejected every one. But by skillful diplomacy with Trump and some of his subordinates, Moscow has avoided new US sanctions (with one large exception) and the transfer of more potent US weapons to Ukraine. This must be foremost on Putin’s mind, and he does not want to waste any capital with the US president on Venezuela. Trump himself gave Putin reason for caution when asked about the Russian president during his press conference on the Maduro snatch. Trump replied by expressing his displeasure with Putin for the ongoing killings in Ukraine. 

While Putin will avoid doing anything to provoke Trump over Venezuela, the operation will likely weaken Russia’s war effort. Putin’s struggling economy rests on the income coming from its oil and gas sales—already under pressure thanks to Ukraine’s US-aided drone and missile strikes on its hydrocarbon installations. Trump has said he intends to put Venezuelan oil—still under tough sanctions—back on the market. While this may take some time, it will help him reach his goal of driving down oil prices for US (and therefore global) consumers. This will be another big hit to the Russian economy.

The post The US capture of Maduro reveals Russia’s weakness appeared first on Atlantic Council.

On January 4, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was quoted in a Wall Street Journal article titled “A New Trump Game Plan Takes Shape: Strike and Coerce.” He evokes the Maduro regime’s ties to US adversaries and affirms the US military’s ability to operate in multiple theatres.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig quoted in Wall Street Journal on US operation in Venezuela appeared first on Atlantic Council.

On January 4, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was quoted in a Bloomberg article titled “Trump Snatches Maduro But Leaves His Regime in Charge for Now.” He explains that the Trump administration is attempting to influence the Venezuelan vice president to secure outcomes favorable to the US.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig quoted in Bloomberg on Trump’s Venezuela strategy appeared first on Atlantic Council.

On January 3, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was quoted in a Politico article titled “The hawks are winning.” He argues that widespread support for military action in Venezuela was driven less by policy conviction than by an awareness of internal power dynamics, with officials mindful of where influence resides within the White House.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig quoted in Politico on the Trump administration’s Venezuela policy appeared first on Atlantic Council.

On December 16th, 2025, a report by Global China Hub Associate Director Kitsch Liao and nonresident fellows Nik Foster and Santiago Villa was featured in CNA.

The post Global China Hub report featured in CNA appeared first on Atlantic Council.

As 2026 opens, the most significant question facing the United States and its global partners is not what Trump has accomplished thus far, up to and including the Maduro ouster. The year ahead will be about something more consequential: What sticks? What actions get lasting traction, and what historic legacy will this peripatetic man of action leave behind?

Today’s action is not always tomorrow’s legacy

The first year of Trump’s second term was tumultuous by his own design. It stretched presidential authority, challenged constitutional norms, unsettled many allies, drove global market volatility, and dominated news cycles with a relentlessness that none of the other forty-four US presidents ventured. 

Trump’s first year back dramatically altered the weather, but 2026 will indicate whether Trumpism marks a climactic shift that permanently changes the nature of US leadership both domestically and abroad. What’s at stake isn’t just whether the United States, working alongside partners and allies, will build on its global leadership of the past eighty years. It’s what sort of America will celebrate the 250th anniversary of its independence. 

Trump likes to show important visitors around the White House, comparing himself to the greats in the portraits that decorate its walls and wondering where he will rank among them. Where he may pay too little attention, write professors Sam Abrams and Jeremi Suri in a must-read Wall Street Journal op-ed, is to the fact that “Presidents are assessed by their legacy: institutions they create, coalitions they form and governing assumptions they stamp on America. By that standard, Mr. Trump’s second term remains unsettled at best.”

Here’s a sampling of what Trump’s leadership has brought the world in the past year: NATO allies agreed to a record increase in defense spending. Iranian despots suffered direct US attacks on three nuclear sites. Gaza has a peace plan (albeit a fragile one) endorsed by the United Nations Security Council. US tariff rates reached their highest level in a century. A new US National Security Strategy warned Europe of “civilizational erasure.” And the United States removed a Venezuelan dictator, while Russian despot Vladimir Putin continued his murderous war on Ukraine with relative impunity. 

A scan of recent news, however, reveals Trump’s unfinished business: Trump has said the United States will “run” Venezuela, but details regarding what that means are few. Shortly before the new year, Ukrainian President Volodymyr Zelenskyy paid Trump a visit at Mar-a-Lago to ensure US peace efforts don’t reward Putin’s criminal revanchism. Around the same time, Chinese President Xi Jinping mobilized his naval, air, and missile forces around Taiwan, in a live-fire drill showing off Beijing’s growing ability to encircle the free and democratic island after the announcement of an eleven-billion-dollar US arms package to Taipei. And Iranian students joined expanding anti-regime protests, with Trump promising to protect them if shot upon (“We’re locked and loaded and ready to go”). 

Trump is “the most ubiquitous president ever,” historian Douglas Brinkley recently noted. “He plays to win the day, every day.” Yet history remembers presidencies not by that measure, but rather by what outlasts them. If Trumpism proves more personal than institutional, then its effects may fade over time. If Trumpism embeds itself in how the United States defines its interests, exercises its leverage, and understands its obligations, then allies and adversaries alike will further correct course to adjust for a permanently altered America.

So will Trumpism endure or fade? There are signs pointing in both directions. Here’s what I’ll be watching over the next twelve months to sort the noise from the signal.

Venezuela and the Western Hemisphere

No US commander-in-chief has paid more attention to the daily choreography of leadership and the political theater of the presidency than Trump has. So it is fitting that he would launch the second year of his second term with his most audacious foreign policy decision yet—something The Washington Post editorial board called “one of the boldest moves a president has made in years”—though one executed as a domestic judicial matter based on a criminal indictment.

Before the 2003 Iraq War, then-US Secretary of State Colin Powell popularized the “Pottery Barn rule” that “if you break it, you own it”—a warning about the long-term costs and obligations of military intervention. Trump’s convictions against democracy promotion and nation-building suggest he’ll want to stabilize Venezuela and deliver on US interests without doing either of those things.

How he does that will do much to define US foreign policy in 2026. Can he deliver in Venezuela in a manner that advances the country’s freedom and stability without signaling to China and Russia an endorsement of “spheres of influence” that would encourage their own regional ambitions?

The early hours show how complicated the Venezuela effort will be. Trump appears to be relying on Delcy Rodríguez, Maduro’s vice president who became the country’s de facto leader on Saturday, rather than turning to the opposition, which is widely recognized to have won Venezuela’s 2024 election before it was stolen by the Maduro regime. For her part, however, Rodríguez shot back, “Never again will we be slaves, never again will we be a colony of any empire. We’re ready to defend Venezuela.”

And what other actions might the Trump administration take to deliver on the vision set out in its National Security Strategy to restore preeminence in the Western Hemisphere through a “Trump corollary” to the Monroe Doctrine? Its stated aims, among others, are to prevent and discourage mass migration, ensure governments cooperate with the United States against transnational criminal activity, maintain a hemisphere “that remains free of hostile foreign incursion of ownership of key assets,” and protect “continued access to key strategic locations.” 

Alliances, Ukraine, and Taiwan

Trump has strengthened and weakened US alliances simultaneously. He’s prompted allies to spend more on defense and accept more of their own security burdens, but he’s also left them hedging against US unpredictability. Meanwhile, Russia and China have emerged from 2025 more confident that they can achieve their geopolitical goals: in the case of Moscow, to expand its sphere of influence by reversing its setbacks after the Cold War, starting with Ukraine; and in the case of Beijing, to gain greater control over its own region with an emphasis on Taiwan and a bid to assume the mantle of global leadership.

Trump could take steps in 2026 that reinforce US alliances, or he could give autocratic adversaries even more reason to test US resolve. Through his interactions with Russian and Chinese leaders—Trump talks with Putin frequently and at length, and he is scheduled to meet with Xi at least twice in 2026—he could inadvertently encourage them to press for whatever gains are possible during his remaining three years in office, introducing a period of increased geopolitical volatility. 

Trump inherited a global situation where a group of aggressors—China, Russia, Iran, and North Korea—have been working more closely together than any group of autocratic countries since Nazi Germany, Fascist Italy, and Imperial Japan ahead of World War II. Trump’s advisers blame previous presidents for allowing the unnatural bond between China and Russia to deepen, and they still seem to hope that they can draw Moscow away from Beijing. Thus far, however, Trump has emboldened both Putin and Xi. Their countries’ military and intelligence coordination has deepened, allowing Russia’s war on Ukraine to continue.

Global trade, markets, and economics

In 2025, Trump transformed tariffs from a last resort to a preferred economic weapon with multiple aims: gaining trade leverage, raising federal revenues, incentivizing domestic manufacturing, and punishing miscellaneous misbehavior. Economic nationalism crossed from taboo to mainstream, and protectionism became modern mercantilism. 

In a recent Wall Street Journal op-ed, titled “Prepare for More Tariffs in 2026,” the Atlantic Council’s Josh Lipsky argued that Trump is more likely to continue his current approach than to amend it, even if Supreme Court decisions expected early this year temporarily set him back. “The second year of the second Trump administration is likely to look much like the first in trade policy,” Lipsky wrote, laying out several reasons why.

Perhaps, but global markets and American voters will also have a say, and they are likely to push back. I’m less sanguine than others are that the inflationary aspects of Trump’s tariff approach and the market response will continue to be muted. In particular, look for signs of eroding US dollar dominance. (You can access our own Atlantic Council tracker on that matter here.) 

No one quite knows when global investors and sovereigns will tire of financing US debt, which now stands at more than $38 trillion, or nearly 125 percent of US gross domestic product, with roughly $6 billion added every day. Even at current financing levels, the United States is paying more in interest on its debt than it spends on defense. Something must give—but how and when? 

It’s true that the US stock market held up fine in 2025, with the S&P 500 up an impressive 16 percent. Still, that outcome far undershot the 32 percent gain for the MSCI All-Country World ex-US index, the widest such margin since the global financial crisis in 2009. The S&P 500 also trailed both the DAX (Germany) and the FTSE 100 (United Kingdom), in addition to many emerging market indices. In a front-page report in The Financial Times, journalist Emily Herbert wrote that this rare year of Wall Street underperformance came due to “worries about high valuations, a Chinese artificial intelligence breakthrough and Donald Trump’s radical economic policies.”

It’s true that even a Democratic president in 2029 is unlikely to roll back Trump’s tariffs dramatically, given that both parties currently lack a free-trade consensus. But it’s also unlikely that the trade system going into the future will be so driven by one individual and his preferences. 

Watch to see whether Trump can continue to press US economic advantage in the coming year without greater economic or political blowback than he has experienced thus far. Will rising investments in artificial intelligence continue to buoy markets? Or will slowing growth, consumer concerns about affordability, and global worries about US debt levels weigh the economy down? Expect 2026 to be a year of continued economic and market volatility—but not necessarily the lasting, wholesale change of the international trading system some are forecasting, as other actors advance trade deals.

The president and his Republican Party

Perhaps the most important “What sticks?” question of 2026 is whether Trump will move toward more strategic consistency or instead double down on the improvisational approach that he believes served him so well in 2025.

His unpredictability, which his son Don Jr. praised in Doha late last year, wins him leverage at key moments, and he certainly caught Maduro off guard over the weekend. But there’s no indication that he has built a governing system or a sustainable national security strategy around that unpredictability. Durable legacies require repetition, delegation, and follow-through by a cadre of intellectual and ideological acolytes. 

“Successful political movements outlive their founders,” Abrams and Suri wrote in the Wall Street Journal. “New Deal liberalism outlasted Roosevelt. Postwar conservatism survived Reagan. Trumpism appears to be dependent on Mr. Trump’s personal authority, media dominance and capacity for conflict.” The president, who is confronting actuarial tables as he turns eighty this year, could face a starkly different Congress a year from now. That means the next several months could present a major test of both Trump and Trumpism. 

Watch in 2026 to see whether any Republican leaders translate Trump’s instincts into a more lasting doctrine—on alliances, on relations with autocratic adversaries, and on trade. Potential Republican presidential candidates such as Vice President JD Vance, Secretary of State Marco Rubio, and Senator Ted Cruz of Texas will have to gauge whether Trumpism is a winning ideology for the future.

One recent cautionary sign for Trump acolytes was the decision by more than a dozen employees of the Heritage Foundation think tank to jump ship to the previously little-noticed Advancing American Freedom (AAF), which former US Vice President Mike Pence set up in 2021. “The debate over the direction of the post-Trump right is underway,” the Wall Street Journal editorial board wrote, with Pence explaining that what attracted the individuals to AAF was finding “a consistent, reliable home for Reagan conservatism.”

In the year ahead, I will be seeking to sort spectacle from substance regarding the actions and reactions of US adversaries and allies, global markets, and Trump himself. The president changed the political and geopolitical weather in 2025—dramatically but not irreversibly. Not every shock becomes a structure, and not every provocation determines an enduring policy change. When it comes to what sticks, the stakes are both global and generational.

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on X @FredKempe.

This edition is part of Frederick Kempe’s Inflection Points newsletter, a column of dispatches from a world in transition. To receive this newsletter throughout the week, sign up here.

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On January 4, Alexander B. Gray, a GeoStrategy Initiative nonresident senior fellow, was interviewed on Bloomberg about the decision to capture Nicolas Maduro. He explains that the Trump administration has redefined US core interests as inextricably linked to the Western hemisphere, and argues ousting Maduro eliminated a hostile regime and narrowed the strategic space for US adversaries.

Fellow

Alexander B. Gray

Nonresident Senior Fellow

GeoStrategy Initiative Scowcroft Center for Strategy and Security

Defense Policy Defense Technologies

The GeoStrategy Initiative, housed within the Scowcroft Center for Strategy and Security, leverages strategy development and long-range foresight to serve as the preeminent thought-leader and convener for policy-relevant analysis and solutions to understand a complex and unpredictable world. Through its work, the initiative strives to revitalize, adapt, and defend a rules-based international system in order to foster peace, prosperity, and freedom for decades to come.

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The post Gray interviewed on Bloomberg about Trump’s Venezuela policy appeared first on Atlantic Council.

Bottom lines up front

• Venezuelan oil supply is unlikely to meaningfully move global energy markets in the near term.
• Oil may help pay the costs of US intervention in Venezuela, but Trump is likely more motivated by securing the Western Hemisphere.
• The operation to remove Maduro signals Trump will take action when it advances US interests but does not burden the American public.

Based on how prominently Venezuela’s vast oil reserves featured in President Donald Trump’s Saturday press conference about the military strike that captured Nicolás Maduro, oil does appear to have played an important role in shaping the administration’s will to advance the audacious mission. Yet it would be misguided to claim that gaining access to supplies of heavy crude oil was the impetus for the operation.

Venezuelan oil supply is unlikely to move global energy markets meaningfully in the near term. For now, the country remains under an oil embargo imposed by the Trump administration. Even under optimistic assumptions, it will take years to rehabilitate the country’s energy sector and achieve a sizable increase in oil exports. Saturday’s operation didn’t hinge on nuanced assessments of crude grades or the US refining sector’s appetite for heavy supply. Energy was the enabler of a much bolder manifestation of Trump’s foreign policy as laid out in the administration’s recently released National Security Strategy. 

The United States is now practicing an enhanced version of the two-hundred-year-old Monroe Doctrine. What Trump described Saturday as the “Donroe” doctrine seeks a Western Hemisphere free from hostile external influence and aligned with US political and economic interests. This makes political realignment in Latin America relevant to the president’s vision for the region. Trump also is likely keen on aligning his removal of Maduro and approach to Venezuela with US domestic interests. That includes not saddling American taxpayers with the price tag of another conflict, as well as stemming the recent high levels of migration to the United States from Venezuela. It also includes reducing the violence caused by cartels trafficking illegal narcotics and making whole US companies whose assets Venezuela expropriated under Maduro’s predecessor Hugo Chávez. Here, oil is the enabler that may help pay for the execution of the policy, not the ultimate prize. 

In his address from Florida on Saturday, Trump correctly sized up the state of Venezuela’s oil economy: For a country with the largest oil reserves in the world, production is a “total bust” and the full potential of those assets has not been realized. Under Maduro’s rule, production declined from around 2.5 million barrels per day to less than one million barrels a day. If there is an orderly transition of power in Venezuela, then US companies will benefit from the political transformation. 

At the same time, the United States is the world’s number one oil and gas producer. It is energy secure. This explains why Trump emphasized that revitalizing Venezuela’s oil patch will make the people of Venezuela—not the United States—“rich, independent, and safe.” Consider the example of neighboring Guyana, where the public is benefiting from oil extraction by US companies. Ensuring Venezuela stands strong alongside the United States will help achieve the president’s domestic policy goals and lessen the influence of Russia, China, and Iran in the Western Hemisphere, all while avoiding economic costs to the American public. 

The policy that the Trump administration pursued on Saturday offers insight into the president’s decision-making and the impulses driving his administration. For those countries at odds with the United States, it’s a clear signal that Trump will take decisive action when US interests can be advanced without burdening the American public.

The post Venezuelan oil was the enabler, not the prize appeared first on Atlantic Council.

Nicolás Maduro is out. But who’s in? Early on Saturday morning, the US military removed the Venezuelan strongman from power, transporting him to New York to face narcoterrorism charges. President Donald Trump said the United States will now “run” Venezuela and that Maduro’s former vice president, Delcy Rodríguez, has assumed the presidency for now. What does it all mean for the United States, the Venezuelan people, and the country’s oil? Our experts have the preliminary answers.

• Jason Marczak (@jmarczak): Vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center 
• Iria Puyosa (@NSC): Senior research fellow at the Atlantic Council’s Democracy+Tech Initiative and a native of Venezuela 
• Alexander B. Gray (@AlexGrayForOK): Nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, and former deputy assistant to the president and chief of staff of the White House National Security Council 
• David Goldwyn (@Dlgoldwyn): Chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group and former US State Department special envoy and coordinator for international energy affairs 

Changing the regime

• “This is the most consequential moment in recent Venezuelan history—and for the broader Latin American region,” Jason tells us. “This operation goes beyond a simple extradition: It is a regime-change effort.” 
• For now, Rodríguez—who was very much a part of the Maduro regime—is in power, though she “does not appear to have the backing of all factions within the ruling party,” Iria notes.  
• “Rodríguez cannot guarantee the stability required for” the Venezuelan economic revival that Trump is calling for, Iria adds. “Chavismo no longer enjoys the widespread popular support it had two decades ago.” 
• Jason points out that Rodríguez is constitutionally obligated to call new elections within thirty days, but even that step would in effect come from the same regime that stole an election rightfully won by the opposition in 2024. Trump called for a “safe and judicious transition,” but Jason notes that “many entrenched actors are likely to resist meaningful change,” even though “real change is fundamental to US interests and to the Venezuelan people.” 

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The Trump Corollary

• Trump’s 2025 National Security Strategy outlined a “Trump Corollary” to the Monroe Doctrine, with a focus on securing the Western Hemisphere. This operation tells us the Trump Corollary “is officially in effect,” Alex says. “Washington has demonstrated a long-overdue commitment to hemispheric security.” 
• And US adversaries are watching. The operation “will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests,” Alex explains. 
• The operation, Alex adds, “creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality” by “ensuring extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas.” 
• Trump also sent a message to other leaders in the region. “Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States,” Jason points out. 

Oil outcomes

• Trump spoke of bringing back US oil companies that were booted out by Venezuela’s 1976 nationalization of the oil industry. But “few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation,” David tells us. “Companies that have existing operations are much more likely to revive and expand them if the environment is secure.” 
• The United States has plenty of policy options at its disposal, David says. For example, the administration “could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue.” 
• But, David adds, “until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.” 

The post What to watch in a post-Maduro Venezuela appeared first on Atlantic Council.

So, what’s next for Maduro, Venezuelans, and US efforts in the region? Below, Atlantic Council experts share their insights.

Click to jump to an expert analysis:

Jason Marczak: The US needs to remain committed to a democratic transition

Matthew Kroenig: A win for regional security, the Venezuelan people, and the US military

Alexander B. Gray: This operation sends a signal to Beijing and Moscow

David Goldwyn: Opening up Venezuela’s energy industry will come down to the details 

Celeste Kmiotek: The US strikes most likely fall afoul of international law

Iria Puyosa: Delcy Rodríguez cannot guarantee the stability Trump wants

Geoff Ramsey: The mission is not accomplished until Venezuelans get free and fair elections

Nizar El Fakih: Multilateralism failed Venezuela. But it failed long before today.

Tressa Guenov: Success will require years-long US diplomatic and economic efforts in Venezuela

Kirsten Fontenrose: Watching Venezuela from Tehran

Thomas S. Warrick: Maduro’s ouster will cause shock waves in the Middle East

Alex Plitsas: Three scenarios for what could come next 

The US needs to remain committed to a democratic transition 

Many Venezuelans are hopeful that today marks the beginning of a new era. The removal of Nicolás Maduro from power is a reality that Venezuelans in the country and the nearly eight million forced to flee under his regime have long sought.

Here are three key takeaways from the operation:

First, this is the most consequential moment in recent Venezuelan history—and for the broader Latin American region. Trump’s Saturday announcement made it clear that this operation goes beyond a simple extradition: It is a regime-change effort. Maduro is now en route to New York City to face criminal charges, but the United States intends to “run the country” until “a safe and judicious transition” takes place. That means Delcy Rodríguez, Maduro’s vice president, cannot simply take power and continue his policies. In assuming the presidency, she is constitutionally obligated to hold elections within thirty days. But remember, there was a prior election in July 2024 which opposition leader Edmundo González won, according to released vote tallies.

Second, the US military operation is the start—not the end—of a new level of direct US engagement in Venezuela. Trump confirmed that a team has been designated to run Venezuela, with key figures such as Secretary of State Marco Rubio engaging with Rodríguez. While US forces are expected to provide security around critical infrastructure, broader public security and the protection of citizens remain pressing challenges in a country plagued by gangs, paramilitary groups, guerrillas, and transnational cartels. Hundreds of political prisoners still remain locked up, with their fate of top importance.

Third, today’s actions are the first concrete deliverables of Trump’s new National Security Strategy with its heavy emphasis on the Western Hemisphere. And the president has made it clear that future US operations in the region are fair game as well. Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States.

Fourth, the United States now bears responsibility for the eventual outcome in Venezuela. The challenge will be ensuring a “safe and judicious transition” in a country where many entrenched actors are likely to resist meaningful change, but where real change is fundamental to US interests and to the Venezuelan people.

​Some commentators are arguing that the strike is illegal under international law. I am not a legal expert, but it’s worth noting that even though heads of state do enjoy immunity from prosecution under international law, few world leaders recognize Maduro as a legitimate head of state. Since 2019, the Organization of American States, the premier multilateral body for the hemisphere, has refused to recognize Maduro as president following that year’s stolen elections.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

A win for regional security, the Venezuelan people, and the US military 

There are five winners of the successful US operation to remove Maduro from power in Venezuela: 

1. US, regional, and global security. The world is better off without an anti-American dictator who traffics narcotics, prompts irregular migration flows, and provides a foothold to the “axis of aggressors” (China, Russia, and Iran) in the Western Hemisphere.
2. The Venezuelan people. They now have the opportunity for a better government and a freer and more prosperous future.
3. US military power. This shows that the US military is still the finest fighting force in the world and may help Washington find its confidence and get over its Iraq-Afghanistan hangover.
4. Special operations forces. They have been eager to show higher-level officials in Washington that they are still relevant after the war on terror—and indeed even more so now.
5. Trump’s foreign policy. This is a dramatic foreign policy victory, among the top three of the first year in Trump’s second term, alongside degrading Iran’s nuclear program and increasing NATO defense spending.  

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies. 

This operation sends a signal to Beijing and Moscow 

The “Trump Corollary” to the Monroe Doctrine, as outlined in the 2025 National Security Strategy, is officially in effect. Just days after the Chinese People’s Liberation Army was reported to be war-gaming combat operations in the Western Hemisphere, and a new official Chinese strategy for Latin America refused to recognize the region as of special significance to US security, Washington has demonstrated a long-overdue commitment to hemispheric security.

The Trump administration’s removal of Maduro from power in Venezuela is not simply a message to antagonistic regimes in the hemisphere, like Cuba and Nicaragua; it is a global reestablishment of deterrence that will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests.

Going forward, the administration has a unique opportunity to build upon the success of its pressure campaign against Maduro to reestablish overwhelming US strategic predominance in the hemisphere, including by tacitly shaping a post-Maduro settlement that ensures extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas. The success of this operation creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality.

—Alexander B. Gray is a nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. Gray most recently served as deputy assistant to the president and chief of staff of the White House National Security Council.

Opening up Venezuela’s energy industry will come down to the details 

From an energy perspective the key questions will be who governs the country, the timeline and nature of a transitional government, the security situation in the country at large and in the oil production sites and ports, and if the US government modulates the sanctions regime and the blockade to financially support a potential transitional government. At this writing, Trump has declared that the United States will run the country until the situation is stabilized, and he declined to endorse González. Trump also asserted that US oil companies would return to Venezuela. 

It remains to be seen whether there will be resistance from loyalists of the regime and remaining members of Cuban intelligence. Few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation. Companies that have existing operations are much more likely to revive and expand them if the environment is secure.

It is highly uncertain how the US administration will approach exports and management of those revenues. It could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue. It is also possible that those revenues would go into a blocked account for the benefit of a new Venezuela government.

But for now, we have no details about how these fiscal and legal arrangements will evolve. Until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

The US strikes most likely fall afoul of international law

Maduro oversaw a brutal regime engaged in violent human rights violations against Venezuelan citizens. Regardless of this, the US strikes on Venezuela were illegal under international law.

The United Nations (UN) Charter forbids use of force against a state’s “territorial integrity or political independence,” with exceptions permitted for self-defense and Security Council authorizations. Self-defense requires that the force used be necessary and proportional, and that the threat be imminent. None of these conditions appear to have been met. As such, the attacks appear to fall under Article 3(a) of the UN General Assembly’s definition of the crime of aggression. This provision is customary, meaning it is binding and applies regardless of US arguments that the actions are legal under domestic law.

The use of force also marked the onset of an international armed conflict between the United States and Venezuela, triggering the applicability of international humanitarian law. While so far most targets appear to have been military, Trump threatened a second “and much larger” attack “if needed.” Trump’s announcement that the United States will “run” Venezuela and may deploy forces also raises alarms around potential occupation.

Finally, as sitting head of state, international law affords Maduro full personal immunity under domestic courts—including in the United States. Since 2019, the United States and other countries have not recognized Maduro as head of state, in response to widespread election fraud, and he is widely considered an illegitimate ruler. However, as argued by the French Cour de Cassation, this immunity should apply regardless of whether a state recognizes a head of state’s leadership—precisely to prevent politically motivated arrests.

While Maduro must be held accountable for the human rights violations he has inflicted, the United States’ unlawful actions must be condemned. Allowing such precedents to go unchallenged will further undermine respect for international law, state sovereignty, and civilian protections.

—Celeste Kmiotek is a senior staff lawyer for the Strategic Litigation Project at the Atlantic Council.

Delcy Rodríguez cannot guarantee the stability Trump wants

The US decapitation operation against the autocratic regime that ruled Venezuela for over twenty-five years—first led by Hugo Chavez, then by Maduro—marks the beginning of the restoration of democracy in the country. The regime was unable to mount any effective defensive military actions. Its usually strong communication apparatus failed catastrophically during the first twelve hours following the US operation to take Maduro from his residence inside Fuerte Tiuna, the principal military base of the Venezuelan army. The military command-and-control chains were clearly disrupted.

Venezuelans are eager to reclaim their country and restore democracy. There is hope that González—who was rightfully elected president in 2024—will soon take the oath, and many trust that María Corina Machado will successfully lead the transition process, which may take months or even years. The second-in-command figure in the regime, Rodríguez, who was sworn in today to take Maduro’s place, does not appear to have the backing of all factions within the ruling party. Rodríguez cannot guarantee the stability required for the business operations Trump emphasized several times during his remarks on the operation. Chavismo no longer enjoys the widespread popular support it had two decades ago.

The Venezuelan people who have fought nonviolently against a highly repressive regime for over two decades will continue their struggle until freedom and democracy are fully restored.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Democracy+Tech Initiative. Puyosa was previously an associate professor at the College of Social Sciences at the Central University of Venezuela.

The mission is not accomplished until Venezuelans get free and fair elections 

With Rodríguez appearing on state television Saturday afternoon and convening a “National Council in Defense of the Nation” made up of every heavyweight in the ruling party, it seems likely that she is indeed serving as the country’s de facto leader—for now.

While she claimed that Maduro remains “the only president,” called for his release, and said that Venezuela would never be “a colony of any empire,” she also noted that the Supreme Court will be reviewing a national emergency decree signed by Maduro as his last executive act. This points to further announcements to come, in which Rodríguez will almost certainly claim that she is now the country’s interim leader.

Whoever emerges on top of the power struggle in Caracas, it is fundamental that the United States use its considerable leverage to incentivize a roadmap for a transition. It is essential that the Venezuelan people are presented with a credible plan for free and fair elections, the release of political prisoners, and a path toward economic recovery. The United States can help pave this path by offering gradual, phased sanctions relief in exchange for verifiable progress toward democratization.

It is logical for the United States to advance its own energy, migration, and broader geopolitical interests in Venezuela, but US policymakers should not consider their mission accomplished until Venezuelans’ fundamental right to elect their own leaders is restored.

—Geoff Ramsey is a nonresident senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Multilateralism failed Venezuela. But it failed long before today.

Many today are emphasizing the importance of multilateralism and warning about its erosion as a result of the unilateral US actions in Venezuela. But the reality is different: Multilateralism in the face of the Venezuelan crisis did not fail today—it failed years ago.

That failure—resounding, stark, and undeniable—is measured in millions of exiles, many now undocumented or living in precarious conditions across dozens of countries, constituting one of the largest forced displacements in the world without a conventional war or internal armed conflict. It is measured in millions of families torn apart by a regime that systematically destroyed its own society: opposition parties dismantled, dissidents disappeared, deaths under custody, widespread torture, the mass closure of independent media, expropriations that crippled the productive economy (years before any international sanction), hyperinflation that impoverished millions of working families, and sustained repression.

Meanwhile, diplomacy and multilateral institutions proved unable to deliver a single effective negotiation process leading to an orderly, peaceful, and negotiated transition—despite years of appeals by millions of Venezuelans who voted, protested, and exhausted every available civic mechanism at enormous personal cost.

And international justice? The International Criminal Court, with an investigation open since 2021, has yet to issue a single indictment—despite extensive documentation of crimes against humanity by the United Nations Fact-Finding Mission on Venezuela, Human Rights Watch, Amnesty International, and hundreds of victims. Their testimonies provided detailed accounts of a sophisticated, systematic, and nationwide apparatus of repression designed to crush dissent that has been operating in the country for several years under this regime.

Looking ahead, a central concern among Venezuelans—both inside and outside the country—is whether stability will follow, and what political order will emerge from the vacuum left by Maduro, particularly given the competing factions within the former regime. What is clear is that Venezuelans expressed their will at the ballot box: In the July 2024 presidential election, the opposition—led by González and Machado—won decisively, a result the Maduro government refused to recognize, further deepening the crisis that culminated in today’s events.

Any sustainable transition will require that this legitimate leadership, with broad and demonstrable support inside Venezuela, be empowered to lead a democratic transition through a credible and legitimate process.

—Nizar El Fakih is a nonresident senior fellow with the Strategic Litigation Project at the Atlantic Council.

Success will require years-long US diplomatic and economic efforts in Venezuela

While it’s far too soon to know Venezuela’s ultimate disposition following today’s operations, we do know that Trump says that the United States will essentially “run” the country for now. Trump has prided himself on touching many conflicts around the world—from those between Rwanda and the Democratic Republic of the Congo and Azerbaijan and Armenia to Gaza and Ukraine—quickly claiming several as resolved. But one thing the administration has yet to prove in nearly all cases, especially Venezuela, is whether it has the sustained attention span for the years-long diplomatic and economic efforts required to bring societies out of chaos and repression.

Even a short-term endeavor of running Venezuela will cost significant US military and taxpayer resources. It will also require real diplomatic finesse to ensure that the United States remains a credible leader in the region, which has now become the centerpiece of US national security strategy. Meanwhile, China will likely continue its lower-key but serious commitment to economic development in Latin America and elsewhere around the world.

Venezuela will be a test of Trump’s strategy for US dominance in the region and whether his collective peace and security efforts—from Caracas to Kyiv—can result in real strategic advantages for the United States. The alternative would be a stack of unfinished US projects that leave real lives affected in the wake.

—Tressa Guenov is the director for programs and operations and a senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. She previously served as the principal deputy assistant secretary of defense for international security affairs in the Office of the Under Secretary of Defense for Policy.

Watching Venezuela from Tehran

From a technical and military standpoint, the US operation in Venezuela signals to Iran that Washington is increasingly confident operating against Russian-derived, layered air-defense architectures without needing to dismantle them through a prolonged, overt suppression of enemy air defenses (or SEAD) campaign. Venezuela’s inventory—anchored by S-300VM, Buk-M2, and point defenses such as Pantsir-S1, supported by Russian and Chinese radars—closely resembles the architecture Iran fields around critical sites. Yet the US operation appears to have achieved its objectives without forcing visible air-defense engagement.

Available reporting suggests the US operation evaded detection and engagement by leaning on standoff effects; persistent intelligence, surveillance, and reconnaissance (ISR); electronic attack; and compressed timelines. Under such conditions, systems like Buk and Pantsir may never generate a usable firing solution, while high-value S-300-class assets become difficult to employ without sustained targets, clear attribution, and political authorization. The issue is not only theoretical capability, but whether layered defenses can meaningfully influence outcomes during brief, tightly sequenced operations.

This reinforces a broader pattern Iran will recognize. Russian air defenses have struggled to impose decisive effects in other theaters—including Syria, where Israeli strikes have repeatedly penetrated layered systems, and Ukraine, where Pantsir, Buk, and S-300 variants have suffered attrition under modern ISR-strike cycles. 

Equally relevant is the diplomatic dimension. In Venezuela, as with Iran, US military action coincided with standing diplomatic offers—sanctions relief, normalization steps, and elements of proposed deals—kept on the table before and during the use of force. The combined signal to Tehran is that neither reliance on Russian air defenses nor the slow-rolling of US proposals necessarily alters the pace or structure of US action.  

Recent US strikes in Nigeria send a reinforcing signal. There the United States acted without prolonged warning or phased escalation, using remote airstrikes supported by the Nigerian government. These operations underscore a reduced tolerance for drawn-out escalation dynamics and a preference for short-duration, outcome-oriented use of force.  

For Iran, the relevance lies not in the specific targets or theaters, but in the demonstrated willingness of the United States to move decisively once thresholds are crossed. 

—Kirsten Fontenrose is a nonresident senior fellow at the Scowcroft Middle East Security Initiative in the Atlantic Council’s Middle East Programs. She was previously the senior director for the Gulf at the National Security Council.

Maduro’s ouster will cause shock waves in the Middle East

The success of Trump’s bold operation to remove Maduro will cause global shock waves, including in the Middle East. Saturday’s successful operation puts Trump’s “locked and loaded” message on Friday to Iran’s leaders in a different perspective. However, the Venezuelan operation took months of planning, and there are no signs that the United States has the capability, or the intention, to pull off something similar in Iran.

Still, as a demonstration of Trump’s willingness to back months of rhetoric against Maduro with dramatic—and effective—action, Saturday’s operation should concern Iran’s leaders. Those who know their history—and the Trump administration has some like Sebastian Gorka who do—will remember that in 1956 the United States failed to follow up on its encouragement of Hungarian protesters against Soviet rule. The Trump administration ought to be aware of the dangers of vague rhetoric that cannot be followed up with action. Trump’s words to Iran and the Middle East in the coming weeks need to be made with steely-eyed capability and intention.

—Thomas S. Warrick is a nonresident senior fellow in the Scowcroft Middle East Security Initiative and a former deputy assistant secretary for counterterrorism policy in the US Department of Homeland Security.

Three scenarios for what could come next 

The US operation to capture Maduro and transfer him to stand trial in the United States on criminal charges dating back to 2020 marks a decisive inflection point for Venezuela. What follows will hinge less on Washington’s next move than on the calculations of the regime’s remaining power brokers, military commanders, intelligence chiefs, and political enablers who are now confronted with a stark choice: negotiate an orderly exit or risk annihilation alongside a collapsing system.

In the best-case scenario, Maduro’s arrest catalyzes elite defection. Faced with legal exposure, sanctions, and loss of patronage, regime underlings could seek guarantees for safe passage, limited amnesty, or third-country exile in exchange for transferring authority to the legitimately elected opposition. Such a negotiated handover would avert mass violence, stabilize institutions, and open a narrow but viable path toward economic recovery and international reintegration. 

Another scenario is that the United States has been working secretly with elements of the Venezuelan government who will take over. 

The worst-case scenario is far darker. If regime remnants reject negotiation and fragment, Venezuela could descend into a protracted guerrilla conflict. Armed colectivos, criminalized military units, and narco-linked factions could wage asymmetric warfare, turning parts of the country into contested zones and prolonging civilian suffering long after the regime’s formal collapse. 

 —Alex Plitsas is a nonresident senior fellow with the Scowcroft Middle East Security Initiative, the head of the Atlantic Council’s Counterterrorism Project, and a former chief of sensitive activities for special operations and combating terrorism in the Office of the Secretary of Defense.

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New president, new pressures

José Antonio Kast will head to La Moneda in March 2026. Chile’s president-elect won the second round of the election with 58.2 percent of the vote—winning by a margin of more than 16 percentage points. The day after the election, Kast met with outgoing President Gabriel Boric and emphasized afterward that he will advance a “government of national unity on priority issues: security, health, education, and housing.”

Kast will enter office with a slew of economic pressures in his inbox: slow growth, weak investment, stagnant productivity, high inequality, limited social mobility, and regional gaps. The labor market remains segmented, with low female participation and high informality. Along with these economic pressures, security and rising crime rates dominated the electoral campaign and addressing them will be central to Kast’s government plan.

In 2024, Chile’s economy showed signs of stable but uneven recovery, with moderate 2.6-percent gross domestic product (GDP) growth driven largely by mining, easing inflation, and falling poverty, while unemployment and informality remained elevated and investment growth lagged. Looking ahead to 2026, growth is expected to remain steady at 2.6 percent. Alongside a narrowing fiscal deficit and inflation stabilizing, this suggests a macroeconomic environment that is steady but still dependent on restoring investment momentum.

Chileans want to see changes and expect Kast to deliver some economic wins quickly. But the ability to do so goes hand in hand with addressing the increased rates of crime and violence. Kast’s campaign focused on the security of the country with proposals such as his Plan Implacable,  which aims to “restore state authority and curb organized crime” through tougher penalties, more federal control over prisons, and stronger security operations, while also reasserting state authority in areas where criminal networks have expanded. This plan might be among the things on which Chileans want Kast to take action first. However, Kast and his administration need to balance what they want and what they can actually get done, especially regarding migration and deportation.

A challenging congress

The first one hundred days of the Kast administration will test the executive’s ability to move legislation that supports faster growth, rebuilds investor confidence that has been weakened by security concerns and political fragmentation, and signals a clearer economic direction.

That said, Kast takes office with a congress that leans right but does not give him full control. Right and far-right parties aligned with Kast hold seventy-six of the 155 seats in the Chamber of Deputies, with his second-round opponent Jeannette Jara’s left and far-left coalition of Unidad por Chile controlling sixty-one. The swing party of Franco Parisi, Partido de la Gente, holds fourteen seats.

Kast will need a simple majority to pass most legislation. But constitutional amendments and reforms of the electoral system would require two-thirds of votes in the congress. Kast’s coalition cannot reach either threshold on its own, and must work with partners to move any major bill forward. This makes the Partido de la Gente especially important. Because no bloc controls a majority, its fourteen deputies are in position to decide whether a proposal advances or fails. Its votes can tilt negotiations, shape the final text of legislation, and determine how governable the next term becomes.

Passing legislation through the lower house will be easier, but major legislation such as Kast’s proposed mass deportations will need broader support. The evenly split senate will require him to work with the traditional right as well as swing actors to move legislation. As such, Kast will be faced with increased pressure to deliver short-term results on crime and economic growth, signaling early whether his administration can translate public demand for order and stability into a more predictable environment for investment, something US investors typically look for before committing capital in Chile.

How Chile’s investment environment has shifted

Since the mid-1980s, Chile has implemented significant reforms that opened its economy and encouraged foreign investment. These included changes in the financial and social markets, such as Law No. 20.848 of 2015 establishing the framework for foreign direct investment (FDI), as well as other tax and labor reforms. However, social unrest in 2019, the COVID-19 pandemic, two failed constitutional reform attempts, and rising crime have affected investor confidence.

The foundation for investment in Chile lies in democracy, rule of law, and a predictable regulatory environment. The Organisation for Economic Co-operation and Development (OECD) has indicated that Chile’s growth might be reaching a ceiling, making continued reforms—such as streamlining permits, encouraging innovation, digitalizing paperwork, simplifying regulations, and removing bottlenecks—essential for reigniting momentum.

What makes Chile an attractive destination for US investors

Several conditions strengthen opportunities for US investment in Chile. Together they shape a more attractive environment for long-term investment is likely to be a priority for the incoming Kast government.

• Chile is a key tech hub in Latin America. This is because of its stable economy, strong startup ecosystem, skilled workforce, advanced digital infrastructure, and government-backed innovation programs. Successful tech projects require a strong and solid workforce. According to CBRE’s Scoring Tech Talent 2025 report, Santiago has the third-highest tech talent pool in Latin America, with more than 143,000 professionals. This positions Chile as an attractive hub for companies to expand. That said, most initiatives are heavily concentrated in Santiago, emphasizing the need for additional training in both the northern and southern regions to ensure successful new project implementation.
• US companies benefit from working with reliable local partners, in part because Chile has clear rules for contracts and strong institutions and because local firms usually have long experience navigating permitting, local procurement, cultural nuances, and sector-specific regulations. These conditions create an environment where these partnerships give foreign investors a dependable base of support on the ground.  
• Investors trust Chile because its infrastructure is strong, and its politics stay steady. In 2024, Chile received $15.3 billion in FDI, one of the highest inflows in recent years. A big share of that comes from reinvesting earnings, which shows that companies already in Chile are confident enough to expand. The government agency InvestChile closed 2024 with a portfolio of $56.2 billion in foreign-backed projects, with US companies investing the largest share at $20.5 billion. Major investments target clean energy: green hydrogen, mining, and infrastructure. These numbers show that foreign investors, especially those from the United States, believe in Chile’s long-term stability and the clarity of its rules. They see a country where projects can start quickly and scale up, thanks to predictable regulations and reliable systems. That confidence in both infrastructure and political stability strengthens the case for more investment.

The U.S. International Development Finance Corporation (DFC)’s mandate prioritizes investments in markets that offer predictability, stability, and clear rules, conditions that have historically made countries like Chile attractive for engagement. The DFC, a US federal agency, was created under the 2018 Better Utilization of Investments Leading to Development (BUILD) Act, which merged the Overseas Private Investment Corporation (OPIC) with USAID’s Development Credit Authority. Its core purpose is to mobilize private capital to advance US development and foreign policy objectives by leveraging financial tools such as loans, equity investments, guarantees, and political risk insurance to support private-sector-led solutions in markets where commercial finance is limited or unavailable.

In December 2025, Congress reauthorized and modernized the DFC through the FY 2026 National Defense Authorization Act (NDAA), extending its authorization through 2031, and significantly expanding its scope and authorities. Under this reauthorization, the DFC’s investment cap (Maximum Contingent Liability) was raised to $205 billion, and the agency gained new tools, including a $5 billion equity revolving fund and increased equity investment authority. The legislation also broadened DFC’s ability to invest in more countries and sectors while placing limits on financing in the wealthiest countries, ensuring that no more than 10 percent of its portfolio may support high-income markets, with specified sector exceptions such as energy, critical minerals, and information and communications technology.

While Chile’s high-income status means that large-scale DFC engagement is still limited compared with developing markets, the agency can support selected projects in strategic areas, including clean energy, critical minerals, infrastructure, and technology, particularly where there is a clear economic or strategic rationale and consistent with the statutory constraints on participation in wealthy countries.

Addressing bottlenecks to further FDI in Chile

Following the presidential election, Chile enters a new political phase with renewed attention on how the next administration will translate campaign promises into policy. Chile continues to take steps to strengthen its investment environment, while facing persistent bottlenecks that shape foreign investor confidence and will influence the country’s economic direction in the months ahead.

• Regulatory delays are a major concern and become impediments. Permitting and environmental review processes can take several years. However, the Framework Law on Sectoral Authorizations (Law 21.770)—better known as the Ley de Permisología, which creates the Framework Law on Sectoral Authorizations (LMAS)—was enacted and posted in September 2025. The goal is to update and speed up the permit process to encourage investment. The law creates a single digital portal called SUPER to manage permits simultaneously, introduces simplified procedures for low-risk projects, and establishes administrative silence. Streamlining and updating procedures are expected to drop processing times between 30 percent and 70 percent without lowering regulatory standards. This will also be a step forward for attracting foreign investment.
• Policy uncertainty remains a concern for long-term investors. Over the past decade, shifts between governments of the right and left have created questions about the direction of future regulations. Relations between Santiago and Washington are expected to further deepen under a new administration. Kast will need to show that he can meet public expectations for stronger growth and higher investment. Here, it’s critical to balance the demands of [JF1] parties across the political spectrum as this congressional balancing act is what’s needed to advance legislation reassuring to investors. Although Chile has struggled lately to attract FDI, the United States remains its second-largest source, with a strong presence in energy, data centers, and mining.
• The economy also plays a major role in the current political moment. Chile has experienced slow growth for several years and unemployment sits at about 9 percent. Investment remains stagnant, with inflation and high living costs shaping daily choices for many Chileans. Voters widely see the current government as falling short in addressing these issues. The national budget was also a central topic of conversation during the election. The legislative commission in charge of reviewing the annual budget recently rejected the proposal for 2026; Kast will now likely express his approach to next year’s spending plan in the short term. That said, his proposal of gradual elimination of property taxes on primary residences, starting with those on homeowners over sixty-five, would reduce government revenue, meaning the 2026 budget will need to account for this shortfall. The administration will need to balance funding public services and implementing the policy in a fiscally responsible way.
• Security is another major risk. While Chile remains relatively safe in comparison to select other countries, crime has risen in recent years—including organized crime, drug trafficking, and violence in northern regions and Santiago. Researchers estimate crime costs the country nearly $8 billion annually, discouraging some foreign investment. Kast made public safety a core part of his platform through the previous mentioned Plan Implacable, which includes tougher penalties for organized crime, high-security prisons, expanded self-defense laws, protections for law enforcement and judicial actors, and targeted border security measures with his Plan Escudo Fronterizo.

Sectors in Chile with investment potential

• Information technology (IT): Chile’s IT sector is expanding rapidly, driven by high internet penetration, widespread mobile connectivity, and growing demand for digital services. Key emerging sectors include fifth-generation (5G) deployment, big-data analytics, and artificial intelligence (AI) integration, supported by initiatives such as Chile Digital 2035 and the National AI Policy. To accelerate growth, Chile can build on existing programs by expanding Chile Digital 2035 and Digital Talent for Chile, increasing investment in digital infrastructure, scaling training and education initiatives, and deepening public-private partnerships to ensure broader access to advanced IT solutions, close the skills gap, and achieve full digitalization of public services.
• Critical minerals (copper and lithium): As the world’s largest copper producer, supplying 24 percent of global output, and home to 41 percent of lithium reserves, Chile is a strategic source of materials essential for clean technologies. These include electric vehicles, energy storage, and digital infrastructure. With public policies promoting sustainability and high environmental standards, Chile is positioning itself to attract investment that advances technological innovation, supports the global energy transition, and fosters inclusive economic growth. China currently dominates global demand for Chilean copper and lithium, but Kast could attract more Western-aligned investment by promoting legal certainty, officering incentives, and fostering partnerships with companies that meet high environmental and governmental standards.
• Water management and drought mitigation: Chile is increasingly leveraging public-private partnerships to improve water management and climate resilience. Investments focus on both traditional infrastructure, such as dams, and natural solutions including reforestation and wetland restoration. There is demand for technologies that enhance water efficiency, like advanced treatment and recycling systems, data-driven water management tools, and construction waste reduction. Sustainable agricultural practices that conserve water and lower input costs also present promising opportunities. Water management could become a strategic priority for Kast, with the advancement of such projects allowing the administration to deliver visible results, balance regional needs, and contribute to Chile’s robust agriculture sector.
• Seismic-resilient infrastructure: Situated on one of the most active fault lines in the world, Chile experiences frequent earthquakes, including several above magnitudes of eight. Critical infrastructure—such as ports, airports, and energy facilities—requires modern seismic design. There is strong demand for engineering and technology services in risk modeling, resilience planning, and early warning systems. Opportunities include digital twins, smart sensors, and integrated solutions to strengthen utilities, transportation networks, and urban development.

How can the new Kast administration help unlock Chile’s economic potential and attract investment?

• Visit Washington before the March 11 inauguration. This would reinforce Chile’s shared interests in economic security and investment cooperation, present project pipelines aligned with DFC priorities and clarify Chile’s commitments in areas such as energy transition and trade. Early engagement would allow Chile to secure a proactive position in shaping US investment decisions, demonstrate commitment to close cooperation with the United States, and build political support in the US Congress and executive branch for stronger bilateral financing ties. When in Washington, use the visit to generate broader public interest in the importance of Chile as a strong US partner.
• Identify emerging skills and priority growth sectors in Chile and encourage private-sector programs that link education directly to industry needs. Kast can do this by providing tax incentives and speeding up the processing of paperwork for companies involved in workforce training. Scholarships, vocational training, apprenticeships, and partnerships with universities that teach technical skills can help equip students and current workers with the skills required for mining, technology, energy, and other strategic industries.
• Maintain continuity in key policies on permitting reforms. This applies to policies such as the Ley de Permisología, which aims to streamline and coordinate environmental and sectoral permitting across government agencies, and they should be expanded to ensure that the ministries and offices involved are actively collaborating with each other. If government entities are not coordinating—for example, in the processing of environment permits—the procedures for key sectors such as mining and technology will continue to be delayed. Demonstrating consistency will reinforce Chile’s reputation as a stable investment destination and encourage both new and reinvested capital.
• Avoid over-centralizing these initiatives in Santiago. This can be done by collaborating with regional partners or established private-sector actors to develop and train local workforces. This could include local recruitment, training programs at regional universities, and ongoing partnerships between the government and private sector.

These measures strengthen security in ways that matter for investors by creating clearer rules, steadier institutions, and stronger local trust. When the government improves workforce training and expands formal job opportunities, it reduces pressures that fuel crime in regions tied to mining and energy. Better coordination on permits lowers chances of corruption or operational disruptions because companies face fewer conflicting decisions from different agencies. Together, these steps create a safer and more predictable environment for investors. 

Conclusion

Chile remains a trusted and stable partner for the United States. Its democratic values, institutional strength, and openness to trade make it a strategic destination for US investment. But sustaining and expanding this partnership will require continued economic reforms and political engagement between both countries to ease processes for doing business, improve regulatory efficiency, enhance human capital, and foster political stability toward a robust, long-term strategic partnership. As Kast prepares to take office, he has an opportunity to set a foundation to ignite Chile’s economic growth and attract investment. And with the Western Hemisphere as a top priority for Washington, Chile has the potential to be an even more strategic partner to the United States.

The views expressed in this publication are those of the authors alone. Some of the investment opportunities discussed in this issue brief were informed by an October roundtable discussion on US-Chile investment relations, which included the participation of US and Chilean private-sector leaders, public-sector representatives, and multilateral organizations. The roundtable was organized in partnership with AmCham Chile and with the support of MetLife. Neither were involved in the production of this issue brief.

Maite Gonzalez Latorre is program assistant at the Adrienne Arsht Latin America Center of the Atlantic Council.

Jason Marczak is vice president and senior director of the Adrienne Arsht Latin America Center of the Atlantic Council

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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This is the second chapter in the Freedom and Prosperity Center’s 2026 Atlas, which analyzes the state of freedom and prosperity in ten countries. Drawing on our thirty-year dataset covering political, economic, and legal developments, this year’s Atlas is the evidence-based guide to better policy in 2026.

Evolution of freedom

Between 1995 and 2025, Colombia has gone through five institutional phases. Each phase could be characterized by progress and tension, where advances in democracy, improvements in the rule of law, and economic openness were frequently challenged by fiscal limits, political crises, and persistent inequality and informality.

The rooting period (1991–2002)

A fresh chapter of institutional development arrived in Colombia during the early 1990s. The 1991 constitution emerged from a collective determination to eliminate centralism and violence through establishing a participatory and decentralized state which protected rights for all. Social and cultural rights were integrated into the legal framework along with expanded civic freedoms. In addition, the government in the 1990s initiated structural market reforms which included trade liberalization, financial system modernization, and the establishment of an autonomous central bank to manage inflation and create responsible and prudent macroeconomic policies.

Colombia earned economic policy credibility from these reforms which established fiscal and monetary stability for three decades. Nevertheless, these reforms produced a paradox within the country: The economic liberalization process outpaced the transformation of the country’s productive base. As many authors, such as Juan Carlos Echeverry, have noticed, Colombia opened international trade doors without having first constructed its economic base. The nation developed openness, but industries remained defenseless, and infrastructure remained behind. On the other side, the constitution guaranteed a wide range of rights (related to health, education, justice, and more) which had to be funded and created ongoing fiscal burdens exceeding the state’s financial resources. In the 1990s, Colombia emerged as a nation with promising reforms, but its ambitions outpaced its capabilities. This is the tension in which Colombia has operated for many years.

Security and stabilization (2003–2015)

Between 2003 and 2015, Colombia experienced a phase of security along with stabilization. The country managed to regain territorial authority from insurgent forces while attaining public trust in its institutional structures. The government’s “democratic security” strategy was combined with macroeconomic discipline to create a virtuous cycle of investor return, economic growth, and advancement in the rule of law.

During this time, institutional development advanced significantly in response to various policies. A fiscal rule was established while the central bank kept its independence and debt remained controlled. Changes among political ruling parties in Colombia continued without violence while international observers recognized the country’s democratic progress. However, structural problems remained hidden. The security improvements brought undeniable benefits to Colombia, but fighting insurgent forces led to human rights violations that damaged the country’s legitimacy and ability to govern. Colombia made progress on security but failed to improve equality and strengthen its institutions.

Polarization and the post-peace era (2016–2020)

The third stage in modern Colombian history began with the 2016 Peace Agreement, which put an end to fighting with FARC, the Revolutionary Armed Forces of Colombia, the country’s largest guerrilla force. The peace agreement meant to unite society but instead divided it more deeply. The national plebiscite opposition to the agreement, together with its congressional approval, created an impression that the government had disregarded public opinion.

The government could not maintain the ambitious goals of the peace agreement because it lacked sustainable implementation capacity. The implementation of programs for rural reform and reintegration and financial support for these programs remained insufficient. Progress on truth, justice, and reparation was also uneven. At the same time, non-repetition mechanisms—designed to prevent former combatant or affiliated groups from committing the same crimes and to reduce the likelihood of renewed violence—were only partially carried out. Meanwhile regional territorial conflicts increased as coca production grew (due to the dismantling of aerial coca fumigation), and new criminal organizations appeared. The anticipated “post-conflict” situation was instead a reshuffling of existing threats. By 2020, people in Colombia had grown exhausted and increasingly disappointed that the global celebrations of peace appeared so distant from their actual experiences.

Pandemic and social unrest (2020–2022)

The fourth phase revolves mostly around the COVID-19 pandemic. Although Colombia managed to avoid major economic and social setbacks through its proactive countercyclical economic approach, the pandemic nonetheless revealed structural weaknesses of inequality and informality, which led to multiple indicators falling before they partially recovered in 2021 and 2022. The impact of COVID-19 pushed more people into informal work while increasing poverty and inequality and reducing the number of available jobs. The result was diminished economic freedom. The public protests, in part triggered by illegal support and tax increases announced in the wake of the pandemic, revealed deep societal inequalities and perceptions of corruption and political manipulation. These combined to damage institutional trust, hindering investor confidence and consequently the economy.

Uncertainty and political confrontation (2022–2025)

The fifth phase covers the developments since 2022. The current political environment is marked by a confrontational atmosphere, which disrupted consensus-building efforts and created conditions that decreased investment potential and caused institutional uncertainty that destroyed trust in all government institutions. Since 2022, Colombia has faced fresh difficulties caused by inadequate and debatable policies on energy, public services, education, pensions, health, taxes, and land that drive political polarization and create economic instability. The decline of institutional dialogue has diminished investor trust and created uncertainty about Colombia’s future course while democracy persists. The current state of ideological conflict has displaced the practical economic management approach that used to guide the country’s economic affairs. Colombia now confronts the dual challenge of building trust between government and markets and connecting its citizens with their representative institutions.

The 1991 constitution established institutional structures which form one of Colombia’s most valuable assets. The Acción de Tutela gave citizens legal tools to protect their rights, and decentralization increased local government accountability, capacities, and options. The central bank’s autonomy enabled uninterrupted monetary and exchange rate policy and protected the nation from the populist cycles that ravaged most regions on the continent.

But legal systems cannot ensure freedom by themselves. Governance remains weak due to corruption, excessive regulations, and persistent informalities and social inequalities. Over 55 percent of workers remain outside the formal economy, and millions of firms are microbusinesses with low levels of formality, undermining tax collection and labor protections. Colombia needs to protect its democratic institutions while extending institutional benefits to formalize the excluded population.

The security situation represents the second vital point in Colombia’s recent timeline. During the 1990s, the Colombian state faced three concurrent threats from drug cartels, guerrilla insurgents, and armed groups that fought for territory; used kidnapping, extortion, and narcotrafficking to fund their operations; and exported large-scale violence to cities. The homicide rate ticked up, and many people were forced to abandon their homes. Business owners lost their local enterprises and had to defend themselves because municipal authority disappeared from vast sections of the country. By 2005, Colombia regained its administrative control and normalized daily activities, which permitted people to travel more freely, reduced transportation expenses, and extended investor horizons. Companies prospered under fiscal discipline and macroeconomic stability, which directed workers toward new regions for economic enterprise.

Over the course of three decades of social and economic development, women gained visibility and access to opportunities in both the public and private sector. Women’s participation in the workforce increased as did leadership diversity and social policies aimed at gender balance. The boost in household earnings together with more stable societies proved that inclusive growth strengthens both economic prosperity and social freedom.

The business environment in Colombia developed according to its political dynamics. Institutional predictability and consistent rules produced the best investment conditions from mid-2010-2020s. The trust in Colombia has been diminished by inconsistent policies and growing polarization since 2022. The business community shows apprehension toward taxation due to its inconsistent design and enforcement.

The country’s most effective reforms happened when governmental authorities joined forces with business leaders and academic experts to craft public policy that integrated regulatory, infrastructure, and labor initiatives to achieve common goals. Economic strategy has lost cohesion because the dialogue that used to inform it has diminished. Because freedom and prosperity depend on a foundation of predictability, the loss of predictability stands as the most critical institutional threat facing Colombia in the short term.

Colombia’s democracy has shown more stability compared to other regional nations, but 2016–18 marked a fundamental change. The nation experienced a rapid deterioration of political rights and a decline in civil liberties during this time frame. The rejection of the peace agreement in the plebiscite triggered political polarization, which worsened after congressional ratification of the plan. This resulted in widespread public concern about the institutional bypassing of political processes. During this period, both cocaine cultivation and illegal mining activities expanded while violence shifted its operational patterns and power dynamics among different actors. The political rights indicator shows further deterioration during the 2020 emergency period, which also witnessed social uprisings, but there was some improvement in 2021–22 once restrictions were lifted.

At present, legal operations are restricted in Colombia because of two fundamental elements. Most labor markets and business activities operate predominantly beyond the formal sector. The rule of law, measured by the legal subindex, experienced a rapid increase in 2014–15, followed by a dramatic decline. Formalization efforts expanded when security conditions improved, and economic activity rose only to retreat once economic performance declined and labor costs increased. Research shows that greater informality reduces enforcement capacity as well as social insurance coverage and tax revenue. Corruption and bureaucratic scandals from 2010 to 2018 reduced judicial public trust, and illegal activities in unregulated territories eroded local government authority.

Governance quality worsened during these processes even though other sectors showed signs of improvement. While problems existed before the pandemic, COVID-19 made them more apparent. Social unrest spiked sharply in 2019, subsided during COVID-19 lockdowns, and intensified again in 2021. Data reveal that political freedom declined both before and after COVID-19. Yet the underlying causes—rising inequality, widespread informality, and growing insecurity—had been eroding democratic rights well before the pandemic triggered massive job losses and overwhelmed public services. The political situation since 2022 has been more confrontational, hindering consensus-building between government, business, and academic partners and stirring tensions between autonomous institutions and regulatory bodies. The key goal of economic recovery requires the establishment of stable economic directions along with trustworthy dialogue mechanisms that will rebuild private-sector confidence and restore normal market expectations.

Evolution of prosperity

Freedom and prosperity in Colombia have developed concurrently, although their progression has never been perfectly aligned. The 1990s and 2000s market liberalization, alongside expanded rights in the new constitution of 1991 and fiscal and monetary discipline, created the foundation for Colombia’s largest social change in contemporary history. The nation’s average per capita income tripled while poverty dropped by 20 percentage points and life expectancy increased by around ten years. This growth, however, contained a key warning since its uneven distribution meant delayed economic benefits for many Colombians. The clear lesson was that growth without fairness damages society just as severely as economic stagnation.

The inequality trap

Between 2005 and 2016, many observers believed Colombia had entered a positive feedback loop.¹ Economic growth remained healthy while job creation improved, and social programs reduced extreme poverty levels. Market freedom finally found a way to work harmoniously with social policy to benefit society.

After 2016, the positive cycle started to break down. Economic growth decreased, and productivity reforms came to a halt while the wealth gap between rural and urban Colombia remained the same. Informal employment increased yet again while people lost hope for their future because inequality returned to its former levels. Then the pandemic struck, revealing structural defects the country had delayed addressing. Education interruptions, female job losses, and strained public finances pushed the country to its limits.

The 2021 protests were triggered by discontent over taxes, but they served to express people’s deeper sense of exclusion. Many Colombians felt that prosperity had become an exclusive privilege rather than a universal promise. The widespread perception damaged people’s trust in democracy and transformed economic inequality into a political moral crisis. People will tolerate slow economic growth, but they will refuse to support a system that fails to reward hard work or equitable treatment.

Colombia achieved indisputable progress through its recognition of Indigenous and Afro-descendant community rights. However, many of these advancements failed to deliver real benefits in practice. From 2010 to 2020, minority inclusion freedom indicators experienced a decline. The absence of governmental security in peripheral regions, combined with ongoing displacement and illegal expansions of mining and drug production, continue to drive social marginalization.

The disconnect between greater formal rights and stagnant living conditions is clearly visible. For many Colombians, equality before the law failed to translate to real equality of opportunities. The main takeaway is that inclusion demands more than official recognition; it requires continuous financing for education, infrastructure, and peacekeeping that creates national investment incentives for all territories.

Since 2018, Colombia has received over two million Venezuelan migrants. Managing this massive influx tested national institutions but also brought new energy, talent, and entrepreneurship to Colombian society. Border communities became overburdened because social services reached their limits. The “Temporary Protection Statute” along with other pragmatic policies transformed what could have been a humanitarian crisis into a demographic boon over time. Formal labor market workers contributed to the economy through tax payments while bringing new and energetic workforce potential. Amid regional tendencies to respond with populist fervor, Colombia demonstrated a distinct approach that blended openness with strategic foresight. Institutional flexibility combined with inclusiveness demonstrated that migration could be a driver of renewal instead of instability.

Colombia has achieved one of its most remarkable successes through environmental policy initiatives. From 2010 through the early 2020s, Colombia transitioned from setting green targets to producing tangible achievements. The economic policy established through CONPES 3934 (2018) and CONPES 4075 (2022) proved that green growth had become an integral economic plan instead of merely aspirational.

The addition of electric vehicle incentives, together with renewable energy auctions in La Guajira and enhanced prosecution of illegal mining, transformed environmental defense into a core competitiveness element. Mercury emissions decreased while wind and solar power capacity expanded, and the nation began perceiving sustainability as an advantage rather than a limitation. Although environmental issues such as deforestation remain, Colombia has advanced to where economic and environmental goals are more in sync.

Human development presents the clearest demonstration of how freedom relates to prosperity. People in Colombia have experienced longer lifespans and enhanced health outcomes over the past three decades. Infant mortality rates dropped dramatically while literacy rates increased, and healthcare access became almost universal. As a result of the 1993 and 2011 reforms, Colombia’s health care systems transformed to become one of Latin America’s most comprehensive.

Education in Colombia remains divided: Urban schools have developed quickly but rural areas continue to lag behind. Digital access and trained teachers remain scarce in many classrooms while educational results show significant differences across regions. The pandemic intensified educational inequalities, emphasizing to policymakers that offering coverage without proper quality or relevance is insufficient. Future development requires better integration between educational systems and productive sectors to create job opportunities which could also lead to social stability.

The path forward

Colombia is approaching a critical point which will define its future direction. Thirty years of institutional advancement delivered stability alongside credibility, yet the country continues to struggle with social inequality, economic informality, and declining public trust. Challenges arose after 2016, when investment diminished, economic growth declined, and political polarization intensified. But the real issue is greater than Colombia’s ability to grow: The crucial challenge is to achieve inclusive growth that transforms freedom into equal prosperity.

The foundation of prosperity rests on establishing stable public finances. After the necessary spending during the pandemic period and the increase in public debt, Colombia started to make a fiscal adjustment which was successfully implemented between 2020 and 2023. However, since then, public debt and the fiscal deficit have risen high enough to make investors nervous. As a result, Colombia needs an effective reform that expands the taxpayer base while making compliance easier; it should also eliminate tax benefits that favor a select few while preserving support for small regional businesses.

The restoration of fiscal rules (which were suspended in 2025) would demonstrate Colombia’s commitment to disciplined governance while enhancing market and public confidence in the country’s fiscal management. Decentralized fiscal authority with proper accountability mechanisms would enable state institutions to connect with citizens more effectively while distributing growth benefits more fairly.

Peacebuilding requires more than negotiation-based approaches while demanding consistent territorial governance. Large rural areas of Colombia still live under alternative and illegal power systems that impose fear instead of upholding legal authority. Road construction alongside internet connectivity and new schools serve as development tools which could also be useful in strengthening citizenship.

Government investments in infrastructure yielded clear advancements across Antioquia, the coffee region, and parts of the Caribbean region in the form of decreased violence, increased job opportunities, and population retention. Security improves only when people have access to opportunities to replace coercive systems. The practical and moral lesson that emerges is that prosperity requires peace, and peace demands governance from a state whose presence is felt where people reside.

Informality blocks the path that unites freedom with a prosperous future. More than 50 percent of Colombian workers lack contracts and protections since they work outside the formal system. The workplace formalization process would be achievable by easing procedures and reducing labor expenses and modernizing ways to connect workers with employers.

Simultaneously, Colombia needs to transition from an extraction-based economy to an innovation-driven economic model. Productivity functions as the link between immediate economic recovery efforts and enduring prosperity. This requires industry-university coordination along with technological implementation support and local business development investment. Subsidies will not reduce inequality nor sustain freedom because productivity growth serves as the fundamental solution.

Colombia’s greatest challenge, however, springs not from fiscal concerns but from the political domain. The current political division has turned policy discussions into entrenched conflicts, making compromise look like weakness. Future development in Colombia depends on institutional pragmatism, which requires leaders to prioritize results over political statements.

Non-negotiables must be to protect the independence of the central bank and to maintain the autonomy of courts and oversight agencies. Dialogue between government, business, and civil society needs to be reestablished through structured channels. Economic freedom depends not only on predictable rules for investors but also on the social contract that allows it to endure. Transparent institutional operations promote both economic and public trust.

The transition toward clean energy creates difficulties while promising new possibilities. Even though oil and gas continue to generate substantial government revenue, Colombia possesses vast renewable energy potential. The appropriate approach involves slow and responsible market transition combined with building new industries based on sustainable agriculture, clean energy, and ecotourism while preserving fiscal stability.

Environmental stewardship could become a competitive advantage when established through consistent regulations and patient investment. Colombia is endowed with geographical diversity, biodiversity, and abundant water resources that would enable green industries to thrive—as long as institutions remain constant, regulations are simplified, and public-private partnerships are strengthened.

Throughout the thirty-year period from 1995 to 2025, Colombia has been trying to balance its aspirations against its limitations. It strengthened its democracy and opened the economy, but it continues to battle persistent problems of inequality, informality, and insecurity. Freedom in the country has never been fixed since each generation must labor to preserve and renew it.

The next chapter depends on Colombia’s ability to tether freedom to present-day opportunities. Achieving fiscal stability together with security systems, educational advancement, and institutional trust is a moral obligation essential for democratic success. Once trust returns to citizens and government bodies, between investors and institutions, and among regions with their central authorities, Colombia will convert its practical liberty to enduring economic prosperity.

The future direction of the nation depends on making decisions between opposing forces, including confrontation versus consensus, populism versus pragmatism, and empty rhetoric versus courageous social and economic reforms. With the right decisions, Colombia can become an example of democratic stability and inclusive development throughout the Americas.

José Manuel Restrepo is an economist, academic leader, and former public servant with experience in education management and economic policy. He has served as president (rector) in Universidad EIA, Universidad del Rosario, and CESA Business School in Bogotá. He held cabinet roles as Colombia’s minister of commerce, industry and tourism and later as minister of finance and public credit. He holds a master’s degree in economics from the London School of Economics and a Ph.D. in management from the University of Bath.

A strong advocate for innovation, sustainability, and institutional ethics, Restrepo has championed policies such as the Entrepreneurship Law, Green Sovereign Bonds, and the modernization of Free Trade Zones 4.0. His leadership experience extends to academia, government, and business, where he seeks to foster collaboration as a means to turn policy into progress. As a frequent speaker and columnist, he reflects on productivity, education, and governance, emphasizing that economic progress must always serve people.

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The post Colombia needs a strong private sector—and renewed government institutions at the helm appeared first on Atlantic Council.

1. What does this blockade mean for Venezuela?

This blockade adds significant pressure to Maduro’s regime, as these shadow tankers act as a financial lifeline that Maduro relies on to sustain his corrupt patronage system. Sanctioned vessels operate in a global black market, transporting US-sanctioned oil that has been critical over the years to the ability for Maduro to stay in power.

Since the initial US seizure of the Skipper last week, Venezuelan crude exports have fallen sharply, effectively targeting Maduro’s main source of income. Venezuela relies entirely on tankers to export its oil, and disrupting the illegal trade that runs on these sanctioned tankers weakens Maduro’s grip on power. As of last week, more than thirty of the eighty ships in Venezuelan waters were under US sanctions.

Frankly, with the size of the US fleet amassed in the Caribbean, it was only a matter of time before this blockade began. It will be important to see which of these shadow vessels continue to try to reach Venezuelan shores and which vessels the United States determines it has the authority to seize. These ships are part of a large shadow shipping network designed to evade US sanctions and mask the destination of Venezuelan crude. This illegal trade network delivers oil primarily to China, and to a lesser extent Cuba, employing several tactics to disguise the origin, name, and shipping routes to evade US regulations.

The blockade of these sanctioned vessels provides an additional source of leverage for the United States. By cutting off a significant part of the regime’s income, the United States gains an additional chip to put on the table in discussions on ending Maduro’s dictatorship in Venezuela. This move elevates the Caribbean campaign from a counter-drug operation to one that is also cutting off the financial lifelines to Maduro, who the United States has designated as the leader of the Cartel de los Soles.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

2. What is the likely impact on oil markets in the region and globally?

Venezuela exported a little over 780,000 barrels a day in October of this year, 100,000 of which came to the United States and the rest directly or indirectly going to China. It is highly uncertain whether all or only a portion of those exports will be impacted by the blockade.

The president referred to a blockade of “sanctioned vessels,” which could potentially exclude Chevron’s 100,000 barrels per day. A respected tanker tracking outfit suggested that only 40 percent of the vessels transporting Venezuelan crude are sanctioned.

The president also made reference in social media to Maduro and his government being labeled a foreign terrorist organization. We do not yet have designations or explanations from the Treasury or State Department. It is possible that any person or entity doing business with the Venezuelan government or its national oil company, Petróleos de Venezuela, S.A. (PDVSA), could therefore be exposed to liability. In this case, nearly all of Venezuela’s exports (oil or otherwise) could be impacted.

So far, the oil market has shrugged its shoulders at the blockade. Brent crude was up 2.5 percent overnight, to sixty dollars a barrel, according to Bloomberg. That is a pretty modest impact. This could be the result of the market having already priced in the impact of higher levels of naval interdiction of Venezuelan oil exports, high levels of spare capacity, or weak winter oil demand. Ordinarily, one million barrels a day of displaced oil translates into about ten dollars on the oil price, so a complete blockade of all of Venezuela’s exports, if not replaced by increased by OPEC spare capacity or commercial reserves, would be in the range of five dollars to eight dollars a barrel. Everything will depend on how the blockade is enforced.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

3. What else could the United States do to put pressure on Maduro?

Venezuela relies on revenue from sanctioned oil exports to prop up the regime and the country’s economy. Venezuela continues to sell its sanctioned oil, predominantly to China, while accepting payment in digital assets, namely stablecoins, to circumvent US sanctions. To increase economic pressure on Venezuela, the administration should consider enforcing existing sanctions on Venezuela’s oil sector, including PDVSA. Sanctions enforcement would include seizing crypto wallets and working with stablecoin issuers to seize or burn digital assets held by sanctioned Venezuelan entities. This would have an immediate impact on Maduro by taking out significant financial assets and it would be much more cost-effective for the United States and its naval forces.

Separately, as the United States increases pressure on Venezuela with a blockade, the administration should consider where the vessels will go next. As we have seen, the sanctioned tankers carrying Venezuelan oil have also carried Iranian oil. If ships cannot dock in Venezuelan ports, then the United States should anticipate where they will go instead and whose cargo they will carry, which could be Iran or Russia. The shadow fleet used by Venezuela, Iran, and Russia is a network, and to affect Venezuela, the United States needs to address the entirety of the fleet and its operators.

—Kimberly Donovan is the director of the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. She previously served as acting associate director of the Financial Crimes Enforcement Network’s (FinCEN) Intelligence Division, in the US Treasury Department.

4. What does the blockade mean for Russia’s shadow fleet?

The US move against Venezuelan oil exports may matter less for Venezuela itself than for Russia’s shadow fleet, because it signals a shift from symbolic sanctions toward more assertive enforcement against maritime sanctions evasion.

Russia today relies on a sprawling shadow fleet—aging tankers, opaque ownership structures, flag-hopping, ship-to-ship transfers, and weak or fictitious insurance—to keep oil flowing despite Western restrictions. What the Venezuela case demonstrates is that Washington is increasingly willing to treat sanctions evasion not just as a financial violation, but as a maritime security problem.

This matters because Russia’s shadow fleet is not isolated. Many of the same vessels, intermediaries, insurers, and ship-management networks service Russian, Iranian, and Venezuelan crude interchangeably. Pressure applied in one region exposes vulnerabilities across the entire system. Even limited interdictions force tankers to go dark longer, take riskier routes, rely on fewer ports, and accept higher freight and insurance costs—raising the overall cost of Russian oil exports.

For Moscow, the immediate risk is not a sudden collapse in exports but growing friction and uncertainty. Each escalation increases the probability of seizures, port refusals, or secondary sanctions on service providers—factors that reduce the efficiency and scalability of Russia’s energy revenues over time.

There is also a deterrent effect. By demonstrating that shadow fleets are visible, traceable, and vulnerable, the United States raises the strategic risk premium for Russia’s oil trade—even if enforcement remains selective.

This dynamic is being reinforced in Washington on the policy front. A bipartisan group of US senators has introduced the Decreasing Russian Oil Profits (DROP) Act of 2025, which would authorize financial sanctions on foreign buyers of Russian petroleum products and seek to choke off a key source of Kremlin revenue. The proposal includes targeted measures to penalize entities anywhere in the world that continue to purchase Russian oil, with narrow exemptions tied to support for Ukraine, underscoring Congress’s intent to close loopholes in the sanctions regime and further isolate Moscow’s energy exports.

The key takeaway is this: Russia’s shadow fleet survives on the assumption of tolerance and ambiguity. The Venezuela action suggests that assumption is weakening. For a war economy dependent on energy revenues, that shift matters.

—Agnia Grigas, PhD, is a nonresident senior fellow at the Atlantic Council’s Eurasia Center working on energy and geopolitical economy.

The post What Trump’s Venezuela oil blockade means for Maduro and the world appeared first on Atlantic Council.

The past year reshaped Latin America and the Caribbean in ways that will echo into 2026. The return of Donald Trump to the White House introduced new US priorities and a greater regional focus, as the administration imposed new tariffs and elevated the Western Hemisphere as a top priority.

Elections brought mixed outcomes. Argentina handed President Javier Milei a legislative boost in the midterms. In Bolivia, voters rejected the ruling party’s candidate. Honduras held presidential elections November 30 after logistical challenges and institutional disputes. (No winner had been announced as of this writing in mid-December.)

In Venezuela, increased US military operations in the Caribbean added pressure on the Maduro regime amid a renewed focus on countering drug trafficking. Across the Caribbean, countries continued calling for more support to strengthen resilience after Hurricane Melissa caused widespread damage.

The year ahead will test the region on multiple fronts, from the long-anticipated review of the US-Mexico-Canada Agreement (USMCA) trade pact to high-stakes elections in Colombia, Brazil, and elsewhere—as well as an exciting summer marked by the World Cup.

What might be in store for Latin America and the Caribbean in 2026? Read on for our annual ten questions about the year ahead. 

Will Nicolas Maduro still be in power at the end of the year?

Hopefully not. 

Maduro’s dictatorship has been devastating for the Venezuelan people, the country’s institutions, and the Latin American region at large. Eight million Venezuelans have been forced to flee their homes as his repressive and parasitic regime exacerbates hyperinflation and poverty and erodes democratic processes in the country. 

When Maduro stole the presidential election from the democratically elected Edmundo González in July 2024, Venezuelan authorities carried out brutal systematic repression campaigns to suppress any political dissent. 

The US military positioning in the Caribbean—which includes the world’s largest aircraft carrier, the USS Gerald R. Ford—adds pressure on Maduro’s regime, as does the recent announcement of a blockade of all sanctioned oil tankers. Illegal oil revenue that comes through a shadow fleet of tankers helps to prop up Maduro. The Trump administration has yet to show its cards regarding whether it will attempt to negotiate an exit deal with Maduro, if it will seek to remove him through military action, or pursue another option. The US military deployment, which began in late August 2025, is one of the largest to take place in the Caribbean. But pressure will escalate for it to deliver results, and Maduro must come face to face with his increasingly limited options. There are many factors at play when it comes to the possibility of Maduro leaving power in Venezuela. The real goal should be not just for Maduro to leave power, as he could be replaced by a similarly repressive ally, but a real, long-awaited democratic transition.

After Colombia elects a new president, will Bogota and Washington return to a closer partnership? 

Yes.

The next year is bound to be an important one for US-Colombia relations, as a presidential election will be an opportunity to begin forging closer ties. Colombia has historically been one of the United States’ closest partners in the hemisphere, designated a major non-NATO ally and seen as central to preserving regional stability. In 2025 the relationship hit lows it hasn’t seen in decades. Tensions have largely been tied to clashes over the last few years between President Gustavo Petro and his American counterparts, however, rather than changes in the overall relationship at a subnational or people-to-people level. 

With approximately ninety presidential pre-candidates and more than one-quarter of voters telling pollsters they are undecided, the election’s outcome is anyone’s guess. Regardless of who wins, the next Colombian administration will inherit a complex security landscape marked by rising violence and increasingly fragmented criminal organizations, making a partnership with Washington essential. Bilateral ties are unlikely to bounce back immediately or to revert to the way they were. But both sides will have strong incentives to rebuild trust, with Bogota focused on securing US support for counternarcotics efforts and Washington aiming to control the threats of transnational organized crime.

It will be important for the next Colombian president to show early willingness to cooperate with Washington, set a pragmatic tone, and restore predictable channels of communication. Doing so, despite any political or ideological differences, will be key to rebuilding a new type of partnership that may be more focused in scope, especially at the outset.

Will the left regain ground across Latin America in the 2026 elections?

No.

Over the last two years, voters across the region have rewarded candidates running on hard security, market-friendly, and anti-establishment platforms (think José Antonio Kast in Chile, Milei in Argentina, Nayib Bukele in El Salvador, and Daniel Noboa in Ecuador). The trend is similar at the subnational level. Chile’s 2023 constitutional council was decisively conservative, though it was rejected by voters. Brazil’s 2024 municipal races strengthened Jair Bolsonaro-aligned forces, and Colombia’s 2023 local elections punished Petro’s left coalition. 

Considering the regional pendulum swung left earlier in the decade and produced a crowded “pink” map, it would be simplistic or misleading to say that a conservative wave is now sweeping over the region. Voters seem to be driven more by anti-incumbent sentiment and security fears than by any left or right ideology. 

Heading into 2026, right-leaning forces are well positioned in Costa Rica, Brazil, Colombia, and Peru, where crime, migration, and the state of the economy dominate voter concerns. Trends and leading candidates in Costa Rica, for example, suggest that voters are backing more personalistic candidates from nontraditional parties rather than more traditional and conservative parties. So, while we could expect at least a few of the aforementioned countries to lean right, security, anti-corruption, and economic competence might matter more than left-right labels.

Will the review of the US-Mexico-Canada Agreement reshape North American trade? 

Maybe.

The review comes at a moment when all three countries face economic and political pressures. The United States might push for stronger enforcement of labor and environmental standards, and a baseline of protections for the US to prevent countries such as China from shipping their goods through USMCA countries and then trying to claim “rules of origin” benefits.

And while US Trade Representative Jamieson Greer noted December 10 at the Atlantic Council that he continues to meet separately with Mexico and Canada, the United States’ USMCA partners may also seek additional updates. Mexico could press for more flexibility in energy and automotive rules. Canada might seek updates on digital trade, dairy market access, and environmental cooperation. These issues matter but expect governments to act cautiously, with the possibility of separate bilateral protocols in the final agreement. Reopening too many chapters could create uncertainty for businesses and supply chains that depend on stable and predictable rules.

Because North America’s economies are so interconnected in autos, agriculture, and energy, even small changes could have large effects. For this reason, the most likely outcome is an integral review that keeps at least the core benefits of the USMCA intact. The three governments might add clarifications, strengthen enforcement tools, or expand cooperation without fundamentally rewriting the deal.

USMCA review can provide a pragmatic roadmap for reshaping North America’s trade, if parties are open to discussing the fundamentals to be strengthened at this point. These include enforcing clear rules of origin, transparent technical frameworks, customs modernization, interoperability, and the rule of law to protect investment and provide overall security to businesses. 

Will Milei’s economic reform agenda gain momentum? 

Yes.

Argentina has long needed sizable structural revamps across key areas including tax, labor, and pension systems to unlock sustained growth, strengthen competitiveness, and ease pressures on businesses and consumers alike. While Milei has advanced parts of his agenda through executive action, the country has now reached the point at which deeper and more transformative changes require congressional approval. The challenge is that, although the government will enter next year with a sizable minority in congress, its caucus will still need to work with moderate opposition legislators to pass key legislation. 

Many legislators appear willing to engage in dialogue to allow meaningful progress, and securing their support would both make these measures viable and send a powerful signal to markets that Argentina’s political class is broadly committed to long-term stability and modernization. That is why progress is likely, particularly when it comes to tax and labor reform. But the ultimate outcome will depend heavily on the administration’s ability to negotiate with provincial governors, whose delegations form a majority of the moderate opposition bloc. Watch out for early successes in the first months of 2026, which might set the tone for the legislative agenda throughout the year, defining the scale of the administration’s ability to pass reforms. 

Will Latin America and the Caribbean surpass their growth projections for 2026? 

Yes.

Although Latin America is expected to continue experiencing relatively slow growth in 2026 compared to other emerging-market regions, progress in US-Latin America economic engagement and improvements across several key macroeconomic variables create a credible pathway for the region to exceed current projections.

Economic forecasts suggest that 2026 will not be a transformative year for most countries. Argentina and Guyana are the primary exceptions, with Guyana standing out as the only Caribbean country among the world’s thirty fastest-growing economies. Even so, the region has meaningful upside potential on trade. Stronger-than-expected export performance could lift regional growth, especially if recent announcements on commodities lead to further reductions in trade barriers with the United States. A pickup in demand from major markets, including China, could provide an additional boost. These improvements would help offset the decline in the region’s overall trade surplus projected by the International Monetary Fund (IMF).

At the same time, a gradual easing of monetary policy in the European Union (EU) and the United States could help revive foreign direct investment flows, which have slowed since the post-pandemic surge. When combined with country-specific recoveries such as Argentina’s stabilization process and continued gains from energy and mineral projects across the region, these factors create a realistic opening for Latin America and the Caribbean (LAC) to surpass the current IMF growth projection of 2.3 percent for 2026.

Will the United States counter Chinese investment more aggressively in Latin America? 

Yes.

The Trump administration’s sharp rhetoric toward governments seen as aligning with Beijing has already signaled a tougher stance, and this pressure will grow as Washington confronts the strategic nature of China’s investments in the region. While US companies invest far more than Chinese firms in overall volume, much of that investment in the region goes to low-risk service sectors. 

China, meanwhile, is expanding its influence through targeted bets on critical minerals, energy, infrastructure, and transport, which shape long-term supply chains and political leverage. For the United States to remain competitive, it will need to shift its policies to encourage more strategic investment. This means reducing costs and risks for US firms, expanding development finance tools, and partnering more closely with multilateral banks to help US companies enter the sectors in which China currently dominates. 

The US International Development Finance Corporation (DFC) is due to be reauthorized and recapitalized in 2026. This will help to provide some of the capital necessary to lower the barrier of entry to US companies engaging in capital-intensive projects such as infrastructure and extractives—two sectors in which China has had stronger influence in LAC. The unveiling of a holistic economic diplomacy initiative by the White House, such as America Crece 2.0 (a more comprehensive version of its predecessor during Trump’s first term), could further support US efforts in the region.

Will the Caribbean improve hurricane response and coordination? 

Maybe.

Better coordination will require stronger regional planning and risk management, but past storms have shown the severity of the challenge. Partnerships with the Inter-American Development Bank and programs such as One Caribbean can help prepare projects, support public-private partnerships, and manage political risk. 

Local participation in risk mitigation remains essential because many Caribbean firms operate as family businesses with deep community ties. If countries and investors work together by expanding financing tools, strengthening regional institutions, and supporting resilient infrastructure, the Caribbean can recover more quickly and prepare for stronger storms.

Jamaica is an example of the daunting challenge ahead. For more than a decade, Jamaica kept a primary surplus above 3 percent of gross domestic product (GDP) and reduced its debt, earning US bipartisan recognition for steady governance. In September 2025, Standard and Poor’s (S&P) Global Ratings upgraded Jamaica to BB minus with a positive outlook. But Hurricane Melissa caused almost $8 billion in damage, nearly half of Jamaica’s annual GDP. The country’s $250-million catastrophe bond will likely pay out in full. Yet that amount cannot cover losses of Melissa’s scale. 

Across the region, Caribbean Community (CARICOM) countries lose an estimated 2 percent of their infrastructure capital stock each year to climate-related damage. The growing frequency of severe storms raises insurance costs and stretches already limited public budgets.

Will security remain the top voter priority across upcoming elections? 

Yes.

Voters across Costa Rica, Peru, Colombia, and Brazil will head to the polls with security top of mind. 

In Costa Rica, concern over rising violence jumped from 30.3 percent to 43.7 percent between November 2024 and April 2025. Fifteen of the twenty presidential candidates have placed security at the center of their agendas, with many proposing education reform and youth-focused opportunities to tackle the roots of violence.

Peru has seen one of its most violent years since 2017. Homicides are up 12.8 percent and extortion complaints 27.4 percent compared to 2024. Instability peaked after the attempted assassination of a cumbia band triggered President Dina Boluarte’s impeachment and the swearing in of Jose Jeri as her successor. With protests, unrest, and a surge in criminal extortion targeting informal workers and small businesses, voters will demand immediate solutions.

In Colombia, “total peace” efforts fell short, deepening the security crisis and straining relations with the United States, the country’s long-standing security ally. Armed groups expanded control, coca cultivation reached record highs, and violence surged. This included large-scale displacement in Catatumbo, an attack on a police helicopter that killed thirteen officers, and a bombing in Cali. Nearly one-third of Colombians now see security as the country’s top problem.

In Brazil, security will compete with economic concerns, but October’s Operação Contenção in Rio de Janeiro, the deadliest police raid in the country’s history with 120 victims, has pushed violence to the center of public debate. Gangs continue to control neighborhoods and challenge state authority. While economic pressures remain significant, security is poised to drive the political conversation in 2026. 

Will the United States lift the additional 40 percent tariffs on Brazilian goods? 

Yes.

The additional 40 percent tariffs on Brazilian goods are likely to be lifted or significantly reduced in 2026. Trump and Brazilian President Luiz Inácio Lula da Silva had a positive meeting in Malaysia in late October, and trade negotiations have been ongoing and a priority ever since. The United States and Brazil share a long-standing diplomatic relationship, and the United States has historically enjoyed a trade surplus with Brazil. Many imports from Brazil supply US demand for products that are not produced domestically, such as coffee and bananas; others are imported as input for US manufacturing, such as wood panels and airplane parts.

The Trump administration has already begun rolling back some of the additional duties. On November 20, several Brazilian products were removed from the list of those subject to the additional 40 percent tariffs, including beef and coffee, for which Brazil is the United States’ top supplier. A Supreme Court decision on the legality of International Emergency Economic Powers Act (IEEPA)-based tariffs—expected soon—would also impact Brazilian and global tariffs: Because the administration cited IEEPA to levy the tariffs, a ruling against the use of IEEPA in this way could put all of the administration’s added tariffs on Brazil at risk. Together, the diplomatic momentum, economic reasoning, and legal backdrop all point toward favorable conditions under which many of these tariffs could be lifted in 2026. 

Bonus question: Will Argentina repeat its World Cup title?

Maybe.

Argentina will enter the 2026 tournament with its eyes firmly on back-to-back glory, but the biggest wildcard is Lionel Messi. The captain has given no guarantees that he will lead the team next summer, leaving fans wondering whether “La Pulga” will take one more shot at the world’s biggest stage. Even without certainty about his presence, Argentina remains one of the strongest contenders, backed by a talented roster.

But the region will not make it easy. Colombia returns to the World Cup after eight years with a revitalized team eager to prove it can compete with the best. Brazil will arrive hungry to reclaim its historic position in the World Cup hierarchy, with pressure mounting after more than two decades since it last lifted the trophy. Mexico will face the added pressure of competing as a host nation. Ecuador, Paraguay, and Panama will all look to make their mark and test regional rivals.

The tournament will unfold across the United States, Mexico, and Canada, setting the scene for an unforgettable summer. Argentina is well positioned, but the path to glory will be anything but simple. There is no certain answer for now.

This publication was updated December 17 to reflect news developments.

Issue Brief Nov 19, 2025

Why modernizing CAFTA-DR matters for the United States, and options for updating the trade pact

By Enrique Millán-Mejía, Antonio Ortiz Mena, and Rocío Rivera Barradas

Central America and the Dominican Republic are emerging as key partners for US economic security. The United States has a unique opportunity to reform its free trade agreement with the region—CAFTA-DR—to strengthen these ties.

Americas Economy & Business

New Atlanticist Nov 7, 2025

Hurricane Melissa left $8 billion in damage. Jamaica needs US support to get back on its feet.

By Patricia R. Francis, Maite Gonzalez Latorre

After the devastation caused by Hurricane Melissa, Jamaica needs the United States to invest in the country’s resilience and economic recovery.

Caribbean Climate Change & Climate Action

New Atlanticist Nov 6, 2025

The expert conversation: What’s Trump’s endgame in Venezuela?

By Matthew Kroenig, Jason Marczak

We spoke to Matthew Kroenig and Jason Marczak to shed light on the US campaign of attacks on alleged drug boats and lay out what’s next.

Conflict Human Rights

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post Latin America and the Caribbean in 2026: Ten defining questions for the year ahead appeared first on Atlantic Council.

Online Event Wed, December 10, 2025 • 10:00 am ET

US Trade Representative Jamieson Greer on one year of a new global trade system

AN #ACFRONTPAGE EVENT—US Trade Representative Jamieson Greer discusses the major changes in US trade policy that have taken place during the first year of the second Trump administration and how the strategy will evolve in the years ahead.

Economy & Business Politics & Diplomacy Trade and tariffs United States and Canada

Event transcript

Uncorrected transcript: Check against delivery

STEPHEN J. HADLEY: Good morning. Thank you all for being here for this highly anticipated Atlantic Council Front Page event. I want to welcome our distinguished visitors here with us today, including many members of the diplomatic corps, and our viewers watching online.

I’m Steve Hadley, one of the executive vice chairs of the Atlantic Council Board of Directors. And today I have the distinct honor and privilege of introducing the 20th US Trade Representative Ambassador Jamieson Greer. We could not ask for a better guest as we conclude this year of significant transformation of the global economy.

As we look back on the first year of President Trump’s second term, there’s no doubt that trade and tariffs have dominated the economic agenda. The effective US tariff rate has gone from 2.5 percent last January to above 15 percent today—the highest in eighty years. President Trump has set out to remake the global trading system. And Ambassador Greer has been at the center of those efforts. From Geneva to Madrid to Kuala Lumpur, over the past year, he has helped shape this new policy. This summer, writing in The New York Times, Ambassador Greer said that we are at the beginning of a new global trading system. He called it the Turnberry system, named after the resort in Scotland where the US-EU trade deal was brokered.

He wrote, and I quote, “In the past, we subordinated our country’s economic and national security imperatives to a lowest common denominator global consensus. This approach harmed American workers, their families, and communities by undermining a manufacturing sector that creates high-wage jobs, fosters innovation, and catalyzes investment across the country. What began at Bretton Woods as a necessary effort to rebuild a global trade system shattered by war evolved over nine rounds of trade negotiations into something unrecognizable.”

The question we hope to answer today with Ambassador Greer, the question that animates our work here at the Atlantic Council, is what comes next? The Atlantic Council Front Page Event Series was created for conversations like these with leaders like Ambassador Greer. Before taking on his current role, Ambassador Greer served as chief of staff at USTR during President Trump’s first term. In that role, he helped negotiate the Phase One US-China Agreement and the US-Mexico-Canada Agreement, the USMCA. Ambassador Greer has had a distinguished career in private legal practice, focusing on international law and national security. He also served in the US Air Force, in the Judge Advocate General’s Corps, including a deployment in Iraq. Ambassador Greer, we thank you for your many forms of service to our nation.

To moderate today’s conversation, we are pleased to welcome Greg Ip, chief economics commentator at The Wall Street Journal. I’m sure everyone in this room and watching online agrees that Greg’s analysis of the global trading system and his writing on the US and Chinese economies are simply unmatched. Those of you joining us today will have the opportunity to join the conversation, asking questions via AskAC.org. Before I turn the floor over to Greg, let me note that today marks the fifth anniversary of the founding of the Atlantic Council Geoeconomic Center. It was created thanks to the vision of Chairman John Rogers to help define the shape of the new global economic system. Through its new tariff tracker and its data-driven work on trade, digital currencies, China’s economy, sanctions, and more, it is doing precisely that. We could not ask for a better event to mark this milestone.

Ambassador Greer, the Atlantic Council floor is yours. And, Greg, over to you.

GREG IP: Thanks very much, Stephen. And thank you, everybody here. And, Ambassador Greer, thank you so much for coming today.

Now, I’ve known you for a while, and I know that you keep a busy schedule, but even by your standards, it’s been exceptionally busy. I understand that this is actually your third meeting of the day. You’ve already met with delegations from Jordan and the UK.

I also understand that there’s an AI avatar of you out there with a song put to you, too. So do you think that in the future you’ll be doing—you’ll allow your AI avatar to take over some of the negotiation?

JAMIESON GREER: Maybe. That would allow me to multitask.

GREG IP: That’s right, yeah. Catch up on your sleep.

Look, I want to start out by going back to a speech you gave in Detroit at a reindustrialization summit. And in that speech you laid out, you know, some of the goals of the Trump administration’s trade plan, and you also laid out a three-part test—three things that you thought would tell us if you were achieving what you wanted to. They were smaller goods trade deficit, higher median real incomes for households, and rising manufacturing share of GDP. I want to ask you, give us a report card. How has the agenda—how is it delivering so far? And what more do we need—needs to be done?

JAMIESON GREER: Thanks. And thanks for having me today. Thank you to the Atlantic Council and to, you know, Adrienne Arsht for your patronage here, and for the audience.

The president has a great line where he says, you know, a lot of you I really like and some I don’t like as much, and I’m not going to tell you who. I have a reputation for liking everybody, so I’ll just leave it at that.

With respect to the report card, you know, I give those metrics when I’m talking about our goals in the administration and at USTR. The goal is not to simply have a trade deal or to simply to have tariffs for tariffs’ sake; it’s to have a trade policy that leads to these kinds of outcomes. So where are we on all of these?

The trade deficit. Right now the trade deficit globally is tracking higher than it was last year. You know, why is that? Well, there were a lot of people frontrunning the tariffs, all right? They knew this was going to happen. So if you look—if you look on a monthly basis, you know, early on, you know, we had higher imports than normal. People were frontrunning the tariffs. If you look since August, we’ve seen a significant decrease. Notably, our bilateral trade deficit with China has continued to decrease. It’ll be about—it’ll be down by about a quarter this year, I think, if it continues at this pace. So overall on the year, of course, it’s going to—you know, the first half of the year is going to track a little bit what happened last year and the frontrunning, but when you look at what’s happening more recently it’s clearly going the direction we want it to go and we expect it to go.

You know, second, on wages, blue-collar wages are up. So we’re seeing the right direction there.

And then on the—on the last one, manufacturing as a share of GDP, it’s about the same. You know, some folks measure it a little less. You know, what I would say, though, is we’re seeing a lot of positive numbers there. And you have to forgive me, I actually just brought the numbers because I can’t remember everything. I remember a lot. But you know, some of the metrics I’m looking at are shipments of core capital goods, which rose to an all-time high in July, remained high in August, remained high in September. Real private fixed investment was 5.7 percent in the first half of the year; in 2024, it was about 1 percent. So some of those indicators of new investment, more capital goods. You know, construction of new factories and facilities is also up by a large percentage. So all of those are going the right direction that we want. You know, I think we’ll see it show up in, you know, early next year. Secretary Bessent said the same thing.

You know, we also have, accompanying the trade policy are, you know, good tax policies, energy policies. You know, we’re pumping more oil a day than we ever have. We have expensing in the One Big Beautiful Bill that’s going to help folks with their capital equipment and things like that. So a lot of the indicators we’re looking at are going exactly the right direction.

GREG IP: Manufacturing employment has been weak this year. I think it’s been down in the last few months. What do you make of that? Is that a sign that the reshoring has yet to happen?

JAMIESON GREER: Well, again, it’s something we track, and we’re—you know, we’re aware of those numbers, of course. And I look at it in the broader context of some of the figures I just talked about—you know, more capital equipment, more construction, more private fixed investment. Those are all good numbers.

The employment number overall, our numbers overall, are interesting because we have this phenomenon as well of the administration’s immigration policies, you know, really changing the fundamental employment numbers in the United States. And I’m looking into that, honestly, because I see that number and it seems a little out of step with what we’re seeing in the other numbers.

So we’re watching that. I mean, it’s not been a huge drop, but obviously, we want it to be higher.

GREG IP: Last night in Pennsylvania, the president talked somewhat about his tariff plan, and one line that caught my ear was that he talked about—you know, I think he said something about how we don’t need thirty-five—so many pencils and Barbie dolls, and he’s said this in the past. But explain to us the theory of the case about reshoring. Is it the case that we want to bring back the production of everything, including pencils and dolls? Or do you—does the administration have an overarching theory about which manufacturing is most important to bring back?

JAMIESON GREER: Sure. The first thing I’ll say on, you know, Christmas and all of that, you know, we had the National Retail Federation vice president come out, you know, recently and say stores are stocked up and ready for a record holiday season. So I think we’re—you know, I’m not the Grinch just yet.

GREG IP: No doll shortage?

JAMIESON GREER: No. No, there’s no shortage.

GREG IP: That we’re hearing from—OK.

JAMIESON GREER: What I would say is manufacturing—and not just manufacturing, but the associated research and development—it moves in ecosystems. And so when you reshore—when you’re focused on reshoring the things that matter most—automotive, pharmaceuticals, semiconductors, robotics, steel, fertilizer, all of these things—you tend to naturally get a lot of other manufacturing that comes along with it. Could that be toys and pencils, et cetera? I mean, we’ve made those things here before.

And by the way, manufacturing jobs in America on average pay more than services jobs. You know, we talk a lot about services jobs and how great they are, and they certainly are, but manufacturing on average pays more. So I don’t think we should turn up our nose at making pencils in the United States or other things. I don’t know if American Girl is made in America. It says American Girl. I have four daughters, so I’ve, like, got these things.

GREG IP: Yeah.

JAMIESON GREER: So what I would say is I’m not turning my nose up at this other manufacturing. I think all manufacturing jobs are good jobs, and they typically feed into the broader ecosystem.

GREG IP: All right. Let’s talk a little bit about the agenda. I think last week you had a series of hearings on USMCA—US-Mexico-Canada Agreement—and I believe the treaty or the agreement says renegotiation must begin sometime in the coming year. You were, of course, a part of the team that negotiated that treaty back in 2018. What are the flaws that have since become apparent to you and what do you want to fix? What’s your priority for altering or fixing this agreement?

JAMIESON GREER: So one of the things we really wanted to do with USMCA—and remember, when you look at North American trade you have—you have big—you know, big sectors. You have automotive transportation and everything around it. You have energy trade. You have agricultural trade. You have other important sectors, too. You have services trade. But those drive a lot of trade in North America and in the United States. And remember, it’s a $31 trillion deal, $29 trillion of which is in the United States, when it comes to GDP.

And so in the first term we were quite focused on, you know, securing and improving ag access, because I think a lot of our agricultural producers are big winners of the North American economy. On the automotive side and related manufacturing that was more challenging, where we saw a lot of that production go to Mexico and also to Canada. And a lot of people will say, well, that was the point; we wanted to, you know, have lower-wage, you know, manufacturing in Mexico. But if you go back and look at the history, the narrative around NAFTA was, well, it’s actually going to raise wages in Mexico; we’re going to export more because they’re going to buy more from us. So it played out quite differently than how it was sold.

What we did there is we changed the rules of origin. We wanted to incentivize more content from North America, particularly from the United States. One of the drawbacks is that the most favored nation rate for automobiles in America is 2.5 percent. And so we had a very narrow range to play with where we wanted to incentivize more production in North America, but we only really had 2.5 percent to play with. And that’s a problem. If our MFN rate for autos had been 25 percent like it is for pickup trucks, it’s a lot easier to create incentives to produce in America. We make a lot of pickup trucks in America. It’s because of that 25 percent chicken tax, as it’s called.

So one of the things we’ve already done in this administration, as you know, is we’ve imposed the Section 232 on autos. We’ve to some degree fixed that. I think going forward with USMCA we need to look at non-auto rules of origin to take a similar approach. Especially now that we have the reciprocal tariff overlay of Section 232, I think we have more incentives to create more US and North American content.

GREG IP: Do you have a view on whether this is best done trilaterally, as was done last time, or that it’s best done as two separate bilaterals?

JAMIESON GREER: Well, I—our economic relationship with Canada is very, very different than our economic relationship with Mexico. The labor situation’s different. The import-export profile is different. The rule of law is different. So it makes sense to talk about things separately with Canada and Mexico.

We have the underlying agreement. There are certainly areas where—

GREG IP: When you say underlying, are you referring to CUSFTA, the one that preceded NAFTA?

JAMIESON GREER: Well, I’m talking about USMCA.

GREG IP: Oh, OK. Sorry. All right. OK.

JAMIESON GREER: We have USMCA, which is a trilateral agreement. My sense going forward is we’re going—you know, we’re already talking to them separately.

GREG IP: Sure.

JAMIESON GREER: I have not—I have not had a meeting this year where I sat with Canada and Mexico in a room and we sat together and talked about USMCA.

GREG IP: So it sounds like, if I could sort of infer what you’re saying, is that, yeah, we could end up with simply two rather than one agreement.

JAMIESON GREER: You could have—you could have a couple of protocols attached to the agreement, you could have a replacement. I mean, there are a lot of things that you could do. Now, there are going to be certain areas where a trilateral discussion could make sense. Rules of origin being one of them. Do we align on external trade policies to some extent? That could be another one. Critical minerals could be another area.

GREG IP: Under this—under this scenario does USMCA plausibly go away altogether and is simply replaced by new agreements?

JAMIESON GREER: So we put, and Congress agreed, to have this sunset review clause. And the whole purpose was to review, revise, or even exit USMCA. That’s the purpose, because NAFTA did not have such a clause. And so for twenty-five years, it persisted without change, without a driving factor to force political accountability for the deal. And it lost political support over the years, to the point where, you know, presidential candidates from both parties regularly would run against NAFTA, when it’s fully in the power of the US government to change this and revise it. So we put in the forcing function. So, you know, could it be exited? Yeah, it could be exited. Could it be revised? Yes. Could it be renegotiated? Yes. I mean, that is the purpose of that clause. And all of those things are on the table.

GREG IP: Do you anticipate submitting the finished product to the Senate for ratification?

JAMIESON GREER: So, if you—if you have something where we require an adjustment to US laws, then you have to go to Congress. That’s just how it works. If I have a situation like with some of our reciprocal trade agreements that we’re doing, where there’s not really a congressional change to be made and it’s mostly just changes on the other side of the table, you don’t necessarily have to go to Congress. Now, all that being said, go to Congress, we consult with them. I was there last night in the hearing. Our people talk to them all the time. With respect to a vote, if we need to have a vote to change something in US law, of course we’re going to go to Congress.

GREG IP: OK. Let’s turn to the International Emergency Economic Powers Act. As you know, there is a case pending in the Supreme Court—

JAMIESON GREER: I’m familiar with it.

GREG IP: That’s right, yeah, because you’ve been reading The Wall Street Journal, I would hope, yes. On the legality of this thing. So there is—I’d say the betting markets are saying that the Supreme Court will rule against you. What’s your contingency for dealing with that situation?

JAMIESON GREER: So I would say that since the first term, President Trump and the policy people surrounding him have been thinking about ways to achieve his goals with respect to trade. And even this year, in January, when we were preparing the America first trade policy and options for the president to decide from, there are many statutory delegations that Congress has granted to the president or to other—to agencies to take action. Now, remember the Section 232 actions on steel, aluminum, autos, et cetera, those aren’t at issue in the case. So all of that stays.

The question is, you know, imposing the global tariff and ensuring that the biggest offenders when it comes to trade deficits and unfair trade practices are addressed. And, you know, you have a lot of familiarity with Section 301, with—obviously, I referred to Section 232. There are people out there talking about Section 122, which is a balance of payments power. And the courts have even talked about Section 122. So, you know, all of this is kind of in the ether and people are talking about it. I’m under strict instructions from my general counsel not to reveal the backup plan.

GREG IP: The Atlantic Council—they have a lovely visual, and I hope you can put it up right now, showing the IEEPA tariffs versus the 232 tariffs. Can we get that picture put up somewhere? Oh, there we go. So, as you can see, by their estimates the IEEPA tariffs are raising an annual run rate of around $200 billion a year. That’s a lot of money. Do you think that you can basically recreate that revenue stream using alternative instruments?

JAMIESON GREER: Yes.

GREG IP: Yes? Is that—

JAMIESON GREER: Short answer, but yes.

GREG IP: Is that, in fact, one of the policy goals? Will it be one of the considerations?

JAMIESON GREER: I mean, listen, revenue—tariff revenue is a byproduct of the policy. And you’ve heard the president talk about it a lot. And as this group knows, I think, and anyone who follows trade, the default position for a long time in the United States was to raise revenue to fund the government, and then we switched to an income tax early in the twentieth century. So it’s not crazy to have revenue helping to fund your government. And a lot of countries actually still do to this day. So it’s certainly, you know, a byproduct of the policy. The policy is to reshore the things that matter. It’s to get our trade deficit down. It’s to raise in real income, all those things I discussed.

GREG IP: Well, the reason I bring up the revenue is that’s, in some sense, a proxy for the tariff burden or the tariff incidents, right? I mean, divide the tariff revenue by the imports and there’s your rough proxy, right? So the reason—what I’m trying to get at in that question is, do you think that you can create more or less the same tariff incidents, the same policy outcome using alternative instruments?

JAMIESON GREER: I mean, so I would say, roughly yes. And here’s why—

GREG IP: And is that something that would be under a consideration? Would that be one of the policy objectives that you think about in that contingency?

JAMIESON GREER: I am focused—here’s what we’re focused on, getting the trade deficit down. So when you look at where we are right now, what does the trade landscape look like? The countries that have the largest surpluses with us and the world, have the largest problems with overcapacity or subsidization, they’re largely Asian countries but, you know, the EU has a giant surplus with us. You know, those countries currently have the highest tariffs, right? China has an all-in rate of about 45, if you add the 301s and what we’ve done this year. You know, Southeast Asia has high rates, you know, 18, 19, 20 percent. You know, and then we have a variety of, you know, closer allies that we trade with, but with whom we have real trade problems. This is Japan, Korea, EU. I keep pointing here because the EU ambassador is, like, right there.

You know, and then when you get to the Western Hemisphere we’re generally at about, you know, 10 percent. This is our this is our backyard and we have surpluses with these countries. The reason why some of those countries have a higher tariff is because they have a variety of unfair trading practices that they pursue. And so I’m confident that with other tools we have related to unfair trading practices we can—we can produce the tariff rates we need.

GREG IP: If, in the event the Supreme Court also orders a refund of tariffs paid, do you anticipate any difficulty in actually facilitating or advancing those refunds? It’s a lot of money. Could the people who—a lot of companies have lined up asking you—you know, preparing to ask for their money back. How long would they have to wait?

JAMIESON GREER: Well, it is a lot of money. And, I mean, this is part of the reason why the president’s been so vocal about this case. Obviously, he wants to have the leverage that is afforded by IEEPA to be able to take care of the emergency we’re facing, the offshoring of manufacturing and the deficit. You know, and he’s raised this point too, right? You leave a hole in our finances if you do this. So it’s a big deal, right? And hopefully the Supreme Court, you know, follows the plain language of the text, which is in our favor.

You know, one fortunate thing—and this is probably the only question I’ll dodge—is I’m the USTR. I’m not CBP. I’m not the Treasury Department. And so, you know, I’ll refer you to Secretary Bessent. But, listen, I had the commissioner of CBP in my office yesterday. And we were talking. And, you know, obviously people think about, you know, how this might work. I don’t know what the timeline looks like, though.

GREG IP: So don’t expect them to thank you for basically telling us to go ask them the answer to that question.

JAMIESON GREER: Well, they send people to me all the time.

GREG IP: OK. Fair enough. You mentioned the EU ambassador. Obviously, you know, we’re still sort of, I think, working on some of the details there. Your colleague, Commerce Secretary Howard Lutnick, recently suggested that, for example, the outcome on steel and aluminum tariffs might depend on the treatment of US tech companies. There was recently a very large fine imposed on X, and I think that obviously creates some friction. Are those two things linked, in your view? Will how the EU essentially implements their various digital legislation have—affect how they are treated in tariff negotiations?

JAMIESON GREER: In our joint statement from the past summer, which was really important, right? And Stephen Hadley referred to our statement and what happened at Turnberry. It was an incredible moment for the EU and the US to agree to look at the facts on the ground and say, listen, there are other things going on in global trade that, you know, maybe aren’t accounted for by the current system. And we need to address them, and we’ll do it together. So I give huge credit to President von der Leyen, her staff, and everybody for being super pragmatic on that point.

In that joint statement, there is language about no discrimination against US digital actors and making sure that they have fair treatment. You won’t be surprised to know that what we think is fair treatment and what they think is fair treatment is quite different. And I’ve been, frankly, disappointed over the past few months to see zero moderation by the EU and its implementation of the DMA and now the DSA. You know, I don’t purport to control any other country’s, you know, regulatory schemes, or their sovereignty, or anything like that. I understand that. But with respect to our companies, we’re going to regulate our companies.

You know, the challenge with the digital—in the digital trade space is that, due to the nature of the internet and digital trade itself, is it transcends boundaries. And so if you have one jurisdiction that says, well, we’re going to impose this super-draconian set of rules, or we’re going to limit your business models in certain types of ways, because these are naturally, you know, cross-border companies, it affects them everywhere, right? This is the equivalent of California setting the emissions rules for cars for the whole country, right, for what they do, right? The EU is essentially trying to do it, you know, for global digital operators.

And it would be one thing if they had their own champions, right? But they don’t. So it’s a real problem. And, by the way, we haven’t even quite settled this in the US, right? There’s a—there’s a lot of discussion in Congress and among policymakers on how to do digital tech regulation, and people are a little bit all over the place. What I will say is, we’re not going to allow that regulation to be outsourced, and so I’m hopeful we’ll have constructive discussions with our friends in the EU on this.

GREG IP: Yes, it’s been observed that the one thing the Europeans export a lot of is regulation, so looks like they might need to find some different comparative advantage.

JAMIESON GREER: This is why they gave the EU ambassador a front row seat here, to hear this again.

GREG IP: Going back to the revenue situation, how do you feel about going to Congress and saying, let’s legislate some of these tariffs, let’s go and amend the harmonized tariff schedule to create some permanence to this revenue stream?

JAMIESON GREER: Yeah. I mean, listen, if I were Congress, I’d be quite interested in that. You know, I’ve had members of Congress come up to me who I would not characterize as fans of tariffs, but they’ve said things like, this is real money. This is real money. We have actual priorities we’d be interested in legislating. I’ve had people come up and say, we understand exactly what you’re talking about when it comes to the supply chains that we need to reshore and the trade deficit we need to get down. You know, why don’t we legislate some of this? So I’ve had some interest. You know, we’ve had discussions in the White House about the viability of this. Obviously, any bill like that is really challenging, and I’ve been in Washington long enough to be jaded at the prospect of legislation, but I think it makes sense. I think that it would provide a new baseline for companies to understand, you know, this is not just President Trump or maybe the one person who comes after President Trump, but it truly is a bipartisan expression of what I think a lot of people agree with.

GREG IP: So could that involve, for example, raising the MFN tariff, which I believe is the first schedule?

JAMIESON GREER: Yes. I mean, my own view is, if I were—you know, if I were Congress, I would want to have something like a global baseline to help get the—

GREG IP: Ten percent?

JAMIESON GREER: For example, to get the deficit under control, and then you have higher tariffs based on, you know, whether it’s the deficit or unfair trading practices or something, and you give the president enough discretion to adjust that, to incentivize countries to, you know, come into the fold.

GREG IP: There’s even been interest, and I think there might actually have been a bill in Congress on creating a separate China tariff schedule. Is that something you’d be interested in?

JAMIESON GREER: I mean, I guess my view is you don’t need something China-specific if you have a broader kind of global approach, right? You can fold whatever your approach to China would be into that same legislation.

GREG IP: Sure, OK.

One thing we hear a lot about, and we at the Journal hear a lot about from our business readers, is complaints about the complexity, the uncertainty, the compliance burden of tariffs. Tariffs have changed a lot this year, and there’s a lot of interaction, you know, between the different—for the 232s, the 301s, the IEEPA tariffs. You know, the question is, do they stack, do they not stack? There are anecdotes out there of like an importer getting three different quotes on what tariff they raised, and there was a Fed study that suggested additional compliance costs are roughly equal to a tariff of like 1 to 2.5 percent. So do you agree complexity is an issue? And if so, what’s the solution, and can American businesses look forward to a period of stability?

JAMIESON GREER: So I’m sensitive to the complexity question, because I’m an international trade attorney, and in my private life, I spent many years helping navigate what’s already a complex system, by the way. So I mean, let’s level set, right? It’s not like before this it was like all roses and hugs in customs world. It’s always been quite challenging. You know, but we are sensitive to this.

So early on, there were questions about stacking. How do you relate 232 to the reciprocal tariff? And so, you know, there was guidance and executive orders to help clarify that. And as a general matter, if something’s under the 232 regime, that’s where it is. If it’s another reciprocal tariff regime, that’s where it is. There’s some exceptions to that.

You know, I understand on, you know, steel and aluminum, there are derivative products, and there’s some complexity there. We’ve heard from that on a lot of folks. So the goal is not to introduce complexity for its own sake. Naturally, when you are moving trade policy that’s been more or less the same for seventy years to a new outcome, and you’re changing the tariff regimes, there’s going to be challenges in making it operational, right?

GREG IP: Yeah.

JAMIESON GREER: It’s one thing to kind of have big ideas at the administration level. But again, I had the CBP commissioner in my office yesterday, and we discussed this very issue. So we’re committed to making it as smooth as possible, and so we’re very open to feedback on complexity.

GREG IP: By the way, as the Atlantic Council people, I know they had a slide they wanted to show. It’s really cool with a slider that shows the changing tariff levels that—feel free to put it up now if you have it, but that sort of like visually explains how much tariffs have changed. And so now you could say, wow, that’s a great, you know, like piece of work product there. But, you know, like, if you were in your old job, you’d be, like, rubbing your hands at all the work that’s been created, I’m sure.

But yeah, anyway, I get what you’re hearing, and I presume that you’ve gotten—it looks like a lot of the heavy lifting has been done in terms of just rebuilding and reframing, restructuring the system. All else equal, will 2026 be a quieter year than 2025 on tariffs?

JAMIESON GREER: Well, that’s a question for President Trump.

GREG IP: OK.

JAMIESON GREER: But what I would say is, you know—and I see the graphic, and obviously, again, we’re in the middle of a project. I’m sure you’re going to see things changing over time. And there’s a lot of focus on April 2 and Liberation Day and things that happen since then. I would really focus on August 1st, because that is when the president really set in place a lot of what the reciprocal tariffs are going to be, we announced a bunch of deals, and then in the couple months since then we’ve kind of fleshed out what those deals are. And you’ve really seen, you know, the structure play out that I talked about, right? The highest, you know, over capacity, you know, trade deficit, countries with the highest rates, and the farther you get away from that, the lower the tariffs are.

GREG IP: Yeah, yeah.

JAMIESON GREER: I mean, that’s the structure. There are outliers: Brazil, India. We’re working on that.

GREG IP: Yeah.

I want to turn to China now. And I believe you have a visual also that shows some interesting patterns in the trade between the United States, China, Mexico. So this is interesting. As you pointed out, we’re seeing the big drop in the China number and diversion behavior, but China now drops to third place in terms of its importance as a supplier to the United States.

And I bring that as background, because I think that one of the things that has remained constant between the Trump first term, this term, and even the Biden term in between was the view that China is different. And when I read the national security strategy—and I understand you contributed to this, right? USTR actually had some role in helping draft the national security strategy?

JAMIESON GREER: We got to see it and give input.

GREG IP: OK. So I’m just going to quote a little bit from it: “We must work with our treaty allies and partners to counteract predatory economic practices, use our combined economic power to safeguard a prime position in the world economy and ensure that allied economies do not become subordinate to any competing power.” It discusses encouraging our partners to rebalance China’s economy toward household consumption, forming coalitions that use our comparative advantage to pursue growth through managed cooperation tied to strategic alignment.

So, conceptually, all of this seems to be pushing us in a direction where, whatever other differences, the United States and its like-minded partners would benefit from a common approach to China. Is that true? And how do you actualize it? Can you talk about how the United States can actually—given there’s been a lot of tension, and a lot of you know, you know, friction between our partners—given all that, how does the United States, or should the United States, even want a common approach towards China?

JAMIESON GREER: Yeah, so first of all, I think, you know, I would characterize our view on China—and I’ve mentioned this, you know, recently. So it’s not, it’s not news or something. People in Washington like to talk about China hawks and China doves, etc. That’s a distinction that doesn’t really resonate with the Trump administration because we’re just pro-American, right? We’re just pro-American. We’re not anti-anybody. You know, we’re pro-American, America first, as they say. So, so first of all that, that’s our position.

And we hear this sometimes when partners say we should align on China. Oftentimes, that is code for don’t put tariffs on me.

GREG IP: Yeah.

JAMIESON GREER: Right? So that’s like its own thing.

I mean, my own view is it’s in every country’s interest to take action against overcapacity and distortions, whether that’s from China or that’s from Vietnam or Indonesia or other folks, right? You know, we talk about the EU. We have real issues with some of the EU’s, you know, regulatory approaches. So, you know, we’re not really in a position of telling everybody you’re either with them or you’re with us. I mean, that’s really not how it is. I mean, our view is the United States has taken a lot of unilateral actions since the Trump administration. The Biden people kept a lot of this. We’re doing things now.

A lot of it has to do with China simply because we have a giant deficit with them, and their economy doesn’t fit in very well with ours. We’re just quite different economies. It doesn’t mean we can’t trade together. We should trade together. I mean, I think the landing zone with China is really we just have more balanced trade. I think we have to manage it. I think we have to talk to each other about what we do want to buy and sell from each other, and just make it, frankly, quite managed. Is that ideal? Not for a capitalist, but, you know, we aren’t dealing with capitalists on the other side.

I think with respect to, you know, other countries, I think a lot of it is organic, right? You can see other countries already taking action against overcapacity, whether it’s from China or elsewhere. You know, I think it’s not really a situation where you have, like, the Justice League coming together and, you know, doing all this. This is not how it is. We’re taking unilateral actions. It always takes longer for other countries to, you know, get behind it or do things. And I understand that everyone has different politics and policies. You know, if we align in a way that helps America, great. If not, we’re going to take our own actions.

GREG IP: So we learned just this week that China ran a trade surplus, I think, of a trillion—more than a trillion dollars just through the first eleven months of the year, an all-time high. There’s growing concern—we wrote about it this week in the Journal—that China’s export-driven model is actually hurting other countries by deindustrializing them. And so that essentially—so where that’s heading towards is that it’s—the China challenge is not strictly a bilateral challenge; it’s global. And we can try and keep out China’s exports bilaterally, but they’ll find some other home somewhere else and it will redound to the United States in some way. And this brings folks to the idea that there’s some value in this common approach.

And I noted, for example, in the Malaysia deal there’s a section there that obligates Malaysia that if the United States imposes restrictions on a third country, such as China, Malaysia must sort of copy those. So what’s the driving thought behind that? And is there some willingness to consider, for example, in USMCA maybe the United—Canada and Mexico sort of mimic the American external tariff on China in exchange for maintaining some of the preferential access in that agreement?

JAMIESON GREER: Well, I would say, first of all, it’s really important to acknowledge that President Trump is very focused on having a constructive relationship with China. We certainly had tensions earlier this year. And you know, when China really escalated the situation through rare earth controls and all these different things, the United States certainly had an option to elevate our own export controls or other things. We have—we have a lot of leverage, you know, over all kinds of—China and everyone else. But the president’s interest is not in blowing up everything, right? And that includes our relationship with China. And so we’re quite focused on trying to find a path forward to have an exchange of goods and services between China and the US that makes sense for both of us and that is fairly balanced.

Now, you referred to some of the provisions we have in our trade agreements with Malaysia and agreements from others. You know, it makes sense in a bilateral trade agreement to want to ensure that the benefit of that agreement goes to the two parties involved, right? And that helps us control all kinds of things—control for transshipment, et cetera. And if you’re ever in a situation where we think that broader action is necessary with regard to third countries—and it’s not China-specific, right; if you look at the agreement, it doesn’t say anything about China specifically—you have that option. You have that option to be able to go to countries and say, listen, you agreed to work with us on these issues, and we’re seeing an effect in your market that affects us.

I mean, that’s a—that’s a pretty—I think a normal, natural thing. I think saying it out loud is new. I think writing it down is new. And I think it signifies the importance of economic security. That’s all new, and I think we should be commended for it.

You know, again, I think it’s there if we need it. Right now we’re really trying to have a constructive relationship with China.

GREG IP: OK.

I’m being told that I need to start asking the audience for questions. There’s a few other things I wanted to ask. But any questions out—OK. My friend Gavin Bade from The Wall Street Journal has a question.

Q: Moderator’s prerogative.

JAMIESON GREER: It’s kind of a plant.

Q: He doesn’t know what I’m going to ask, I promise.

GREG IP: It’s true.

Q: Ambassador, thanks for being here. I appreciate it. As you said, Gavin from the Journal.

I wanted to ask you about some recent recalibrations in some of these IEEPA tariffs. You all have rolled back some tariffs, especially on foodstuffs, recently. Some of that was in relation to trade deals or agreements that you signed with some nations, but some of it was outside of the trade negotiations. I wanted to ask you why you’ve recalibrated in that way. And is there kind of a tacit admission there that maybe some tariffs were applied to some goods that, you know, had raised prices for consumers in a way the administration didn’t want to see going forward?

JAMIESON GREER: Yeah, so I think you’re referring to stuff like coffee and bananas and stuff like that. And so from the—you know, from the outset of these negotiations, you know, at least internally, you know, there had been a view that there would be calibrations at some point. And some of these tariffs you have because you want to reshore, you want to protect, you want to take care of the deficit; and some you have for leverage.

And so in early September the president put out an executive order saying, you know, listen, you know, here’s a bunch of stuff where we can—you know, I’m going to authorize USTR and Commerce and all these folks to eliminate the tariffs contingent on progress on the deals. And so, you know, a couple months later, after we had announced deals—a swath of deals in Asia, obviously the EU, other places in Europe, Western Hemisphere, et cetera—we were in a position to feel like we finally had really had a critical mass of progress that we could—we could remove the tariffs on these items, which he had been signaling he was going to do. And several weeks later, we did. It’s no coincidence that when we announced deals with, you know, Ecuador and Guatemala and, you know, Vietnam and Cambodia and these places, places where we get banana and cocoa and coffee, like, there’s just no coincidence that we announced these deals and then we released this stuff.

You know, with respect to the incidence of tariff increases, I mean, listen, there’s a lot of stuff that goes into pricing. If you look at coffee, the coffee price had been going up for two years, right? I can’t control the weather in Brazil with a tariff.

That being said, I think it’s more likely that you have an incidence—a tariff incidence on a price for something that we just don’t make in America than something we do make in America. Also, when you think about the incidence of tariffs, you often get a situation—you know, particularly with manufactured goods or commodities that are broadly produced. If you’re trying to sell into the most valuable consumer market in the world, you want to keep your market share. And so you’re going to compete with other exporters to eat the tariff. And so that’s why you see the tariff effect really diffuse throughout the supply chain.

GREG IP: There was a—yes, right here. Introduce yourself, please. Wait for the mic, and then introduce yourself.

Q: Thank you so much. How are you, Ambassador? I just wanted to ask you a couple of specifics and then a general question.

So specifics—

GREG IP: Let’s see if we can compress it into one question.

Q: Sure. It’s all trade related, you know.

On Indonesia, there’s reporting that you are unhappy about what’s happening with Indonesia. If you could give us an explanation on what’s happening there and what they’re trying to push back on? And what does that mean about these other agreements that you’ve already sort of negotiated? And are you seeing that kind of same recalcitrant attitude from other players?

But then, the other issue is the chips issue and the ruling that came—or the decision that was made by the president. We understand that there’s some, you know, sort of pushback. Obviously, we’re seeing that on the Hill yesterday in the hearing. But can you tell us your view on allowing those chips to go? Thanks.

JAMIESON GREER: So I’ll just do the first one, because you said one question. So on Indonesia, yeah, we saw that report in the FT. And, you know, we have confidentiality agreements between us and Indonesia as we proceed. You know, what I will say, I think it’s meaningful that we had signed agreements at the ASEAN conference in October with Malaysia and Cambodia. I would love for Indonesia to be in that same position. I think it’s a great export market. There are things we import from Indonesia that we want to import. You know, I think that we’re always ready to move forward, and to move forward quickly. And I’m going to have a conversation with my counterpart in Indonesia tomorrow morning. I’m, like, looking at my staff. Tomorrow morning? You know, to talk about progress. You know, I’d love to see that deal finished and done. I think it’s in their interest, and in ours.

GREG IP: I’m going to go to a question from the online audience. And, by the way, if you are waiting to add a question you can go to AskAC.org and there will be an opportunity there, if you want to ask a question. Let me see. How do I do this? This is the part where my age starts to catch up with me. I’ll read the—well, I guess you can all see the question now.

JAMIESON GREER: So everyone can see it?

GREG IP: Yeah.

JAMIESON GREER: Yeah. So Brazil. All right. So with Brazil, we have a lot of issues going on with Brazil. Historically, they have been a challenging trade partner in a lot of ways. An important trade partner. We have a trade surplus there. A lot of good import-export trade that happens. But there are a lot of barriers to the United States, tariff, non-tariff barriers, regulatory barriers. On top of that, they’re a competitor for the United States, especially in agriculture. You know, whenever we are trying to sell our commodities overseas we’re always competing with the Brazilians. We’re concerned about some of their practices with respect to agriculture. So we’re conducting a Section 301 investigation that covers a number of practices in Brazil, including what we think could be illegal deforestation in the Amazon, you know, for their soybean production, a variety of digital practices.

The president also, kind of separate from the trade world, has had foreign policy concerns with respect to the weaponization of law and judicial system in Brazil with respect to officials in Brazil. We’ve seen them detain Americans. We’ve seen them issue, you know, secret orders to American tech companies. We’re concerned with all of these. Some of these are identified in our Section 301 investigation that we’re conducting. Some are identified in the executive order that empowers the State Department and others to take action. And so we essentially have a mix of tariffs on Brazil due to both trade issues and foreign policy issues.

President Trump has had several very constructive interactions with President Lula recently, in the process of relieving tariffs on coffee and cocoa, which we were discussing earlier. Brazil was included in that. And part of that is a recognition of progress we’ve made with them. You know, we would like to in the near term have some kind of deal with Brazil. It may not solve every problem, but I think that there are things they can do. They seem to be quite willing partners. They’re in the Western Hemisphere. You saw the National Security Strategy. Western Hemisphere is very important to us. We want to have a better trade relationship with them. And I think we’re—we kind of have a structure set up to do negotiations to achieve that. Of course, it takes both sides’ willingness to actually make concessions.

GREG IP: Thanks. Yes, there. Wait for the mic and then introduce yourself.

Q: Hi. Logan Wright, Rhodium Group.

You mentioned that the administration is favoring a more constructive relationship with China at this point. Is that inconsistent with other objectives to bring down the US trade deficit, given that China’s strategy remains export-oriented and, you know, continuing to increase global trade surpluses? And is that—does that reflect a change in the approach toward longer-term strategic competition with China?

JAMIESON GREER: So I don’t think it’s inconsistent at all. I mean, we’ve really—frankly, since May, since our Geneva talks, we’ve been on this path with China to be more constructive. And since May, we’ve seen more balance come into the relationship on the good side. So we’re doing both of these things at the same time. As I mentioned earlier, I think that US-China trade, just I think it needs to be managed. I think we need to figure out, you know, what do we want from you? What do we not want from you? What do you want to buy from us? And there’s always going to be this, you know, upper area of the highest tech—you know, the highest tech items, which, you know, folks have referred to and asked about. And that’s always going to be, you know, some stuff obviously, and other stuff is a gray area. You have to figure that out.

But there’s a lot of area where we should trade with China, right? There’s a lot of, you know, consumer goods or low-tech items. You know, we certainly should be selling ag, and airplanes, and medical devices, and things like that. I mean, I think we should focus on where do we agree where we should be trading, and what types of volumes, to try to have balance? And then if there are stickier issues we can address those down the road. I don’t think it’s inconsistent at all.

GREG IP: We’re almost out of time. And I’m going to do the moderator prerogative to ask the last question. You know, we heard the phrase “rules-based international order” so many times, but I think the only thing we all agree on now is that it’s dead. Is that it died sometime between 2016 and 2017, but it might have already been dying by that point. What is your vision of what replaces that order, if anything? I mean, I could have explained that when it was a WTO and nested in that were a group of bilateral and prolateral treaties. What will govern the rules of international trade going forward, if, in fact, there are such rules?

JAMIESON GREER: Well, first of all, I’d say, from what I would think is a realist view, the question is was it ever alive at all, right?

GREG IP: Yeah.

JAMIESON GREER: I think sometimes we kind of have white lies we tell ourselves in international relations to paper over the actual power politics that really control everything. I would say, with the WTO, it has a baseline set of commitments that were agreed to many years ago. There hasn’t been a lot of development there. That’s why we, as the United States, are layering over the WTO commitments bilateral agreements that we believe put America’s interests first and are also in the interest of these other countries to be able to maintain access to the US market in ways that are beneficial to them.

So, I mean, I think we have some of those underpinnings, but where they can’t—I mean, the WTO can’t fix overcapacity, right? They can’t even be transparent among their own members and publish notices of new rules. You know, they can’t fix overcapacity. So we’re going to have to deal with that, either on our own or with willing partners. So I think it’s going to be interest-based.

GREG IP: OK. Ambassador Greer, thank you very much. Very interesting conversation. Really appreciate your time.

JAMIESON GREER: Thank you very much.

GREG IP: Thank you.

Watch the event

The post Inside the Trump trade strategy with US Trade Representative Jamieson Greer appeared first on Atlantic Council.

And the now-released National Security Strategy (NSS) clearly states the United States’ goals for the Western Hemisphere: “Enlist and Expand.” The latter goal includes ridding the hemisphere of a regime that advances priorities clearly in contrast to NSS objectives by providing safe haven for criminal groups, profiting from trafficking, and welcoming the influence of foreign adversaries. And as the United States seeks to secure access to critical supply chains, Venezuela presents an untapped opportunity. 

Although US President Donald Trump has been evasive on what exactly his plans are for Maduro, it’s clear that the president is not authorizing the largest US naval deployment in the Caribbean in forty years—dubbed “Operation Southern Spear” by the Pentagon—only to counter small drug boats. It’s part of his NSS. Trump has recently spoken with Maduro, and reports indicate a possible deal being brokered for the dictator’s departure from the country. 

But there have been rumors of Maduro’s downfall many times before. Hopefully, this time it comes to pass. Without Maduro, Venezuela and the hemisphere would rid itself of a cancer. 

The opposition’s democratic blueprint

A democratic transition in Venezuela must begin with Maduro out of power, but it entails much more than that. It is imperative any opportunity for change is not usurped by many malevolent actors in Venezuela, including Maduro’s generals and high-ranking members of Venezuela’s intelligence agency, the Servicio Bolivariano de Inteligencia Nacional (SEBIN). Drug trafficking guerrilla groups such as the National Liberation Army (ELN) and dissidents of the Revolutionary Armed Forces of Colombia (FARC), as well as armed pro-government paramilitary forces known as colectivos, are also a concern. Corruption lines every inch of Maduro’s regime, so much so that the US Department of State recently designated the Cartel de los Soles as a foreign terrorist organization. The Cartel de los Soles is the term used to describe the de-centralized military structure within Maduro-controlled armed forces that facilitate drug trafficking and other illicit activities for profit. 

A democratic transition depends not only on the failure of these malign groups to derail the process, but also on the success of democratic forces that share similar interests to those laid out in Trump’s NSS. Here it’s worth looking back to July 28, 2024, the day of the Venezuelan presidential elections. Maduro, backed by friendly electoral authorities, stole the election and declared himself winner. In that election, opposition activists were able to gather more than 83 percent of the voting tallies and electoral records, demonstrating that Edmundo González Urrutia, candidate for the Plataforma Unitaria Democrática, had won around 67 percent of the vote. Since then, González has been forced to flee Venezuela, and opposition leader and 2025 Nobel Peace Prize laureate María Corina Machado remains in hiding from Maduro’s regime in Venezuela.

Critically, opposition leaders still have the weight of their sweeping electoral win behind them. They have reiterated time and again a plan for a democratic transition when Maduro leaves power—a plan that includes economic revitalization and the rapid re-instating of civil liberties and human rights for Venezuelan citizens.

Machado herself has laid out her plans for Venezuela’s first hundred days post-Maduro. She has emphasized that before those hundred days are up, freedom of speech would be restored and new leadership would address the most pressing aspects of the ongoing humanitarian crisis. Further, the opposition has pledged to adopt reforms to curb food insecurity in the country. After immediate social needs are met and processes are in place to continue pulling Venezuelans out of malnutrition and other poor conditions, Machado has said she would enact her plan to begin revitalizing the economy. It’s an ambitious plan—after so many years of corruption and mismanagement under Maduro—but also one that will require continued US support in the days and months following a Maduro exit and a transition that would empower democratic forces. 

“A trillion-dollar opportunity”

The Venezuelan opposition’s team of economists have laid out a plan for what Machado’s economic team calls a “trillion-dollar opportunity”—a free-market, liberalized Venezuela open to investors, including the United States.

In her plan, Machado notes Venezuela’s abundance of natural resources, ranging from the world’s largest oil reserves to vast deposits of gold, iron, and other minerals. She argues that a legacy of public investment since before former leader Hugo Chavez came to power and hollowed-out institutions because of Maduro’s dictatorship open a unique path to streamline reforms by removing bureaucratic obstacles and opening Venezuelan goods for international trade with partners around the globe. Machado drives home the point that because so many private-sector opportunities are unexplored in Venezuela, the country is sitting on a gold mine for those who invest in these sectors after Maduro’s grip on the country ends.

The opposition’s main reform programs, which include rule of law, security and defense, and an economic relaunch, provide the United States with a distinct opportunity to create a partnership with one of the most resource-rich and strategically located nations in South America. The positives of Venezuela becoming a friend and an ally of the United States would have been inconceivable in Washington’s policy circles just a few years ago. And such an outcome would significantly advance the NSS’s “expand” goal.

These reforms are an ambitious overhaul of the parasitic political system that has plagued Venezuela for decades. And even though it could take some time for full implementation, it’s an agenda that would amount to a new dawn for Venezuela.

Looking beyond Maduro’s Venezuela

Maduro is noxious—both to the people of Venezuela and the wider Latin American region. In the past decade, almost eight million Venezuelans have fled their homes as Maduro’s parasitic and clientelist regime has enriched itself on the backs of its people. The mass exodus as a result of Maduro’s policies has resulted in a domino effect of instability in the region, notably with the high influx of refugees, who have brought fragile institutions in countries such as Colombia, Peru, Ecuador, and Chile to a near breaking point. Moreover, catastrophic medical and food shortages have jeopardized the lives of millions of Venezuelans, while Maduro’s regime denied the existence of a crisis. 

After Maduro stole the election from González in July 2024, his regime carried out a colossal campaign of violence and repression, forcibly disappearing, unlawfully imprisoning, and torturing citizens suspected of supporting the opposition and challenging the regime. Since the election, more than two thousand people have been detained for ties to the opposition, many of them with no contact to the outside world since their imprisonment. 

At this pivotal moment for the Venezuelan people and the region, momentum must not be lost for Venezuela’s transition to democracy. Its democratically elected opposition has a plan for the first hundred hours, the first hundred days, the first year, and beyond. It’s time to see that plan in action.

Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post After Maduro appeared first on Atlantic Council.

This issue brief is part of the Freedom and Prosperity Center’s “The future of democracy assistance” series, which analyzes the many complex challenges to democracy around the world and highlights actionable policies that promote democratic governance.

Introduction

After decades of democratic and economic progress, Latin America and the Caribbean (LAC) is now losing ground. Between 1995 and 2016, the Atlantic Council’s Freedom and Prosperity Indexes recorded steady gains—a more than eight-point rise in prosperity and a more than three-point rise in freedom—that lifted millions out of poverty, deepened the region’s integration into the global economy, and strengthened democratic institutions. Over the past decade, however, this momentum has stalled, and in many countries reversed. Across the region, insecurity has surged, authoritarianism has deepened, and corruption has stifled development, with consequences that reach far beyond its borders.

This reversal is fueling two interconnected crises reshaping the Western Hemisphere: migration and insecurity. Over the past decade, migration—both within the region and toward the United States—has surged. Authoritarian rule in Venezuela, Cuba, and Nicaragua, along with the collapse of Haiti, has driven mass exoduses, while gang violence spurs migration from Central America and hundreds of thousands more have left other countries in search of safety and economic opportunity. Transit states such as Colombia, the Dominican Republic, and Panama face mounting strain on public services, while the United States confronts unprecedented pressure at its southern border.

Regional security is also deteriorating as gangs and transnational criminal networks expand their operations. Mexican cartels dominate the production and trafficking of fentanyl, methamphetamine, cocaine, and other illicit drugs across Latin America and into the United States. The effects of their trade have been devastating, with tens of thousands of overdose deaths annually, particularly in the United States and Canada. Other groups, such as Venezuela’s Tren de Aragua, extend beyond narcotics, driving homicides, corruption, and violent competition over trafficking routes across the region.

Beneath these crises lies a deeper erosion of governance and democracy—one that the United States should support its allies in confronting. Weak rule of law and systemic corruption stifle economic growth and enable criminal networks to thrive. Authoritarian regimes in the region fuel migration, crime, and cross-border instability, while external powers—most notably China—exploit governance gaps through opaque infrastructure projects and debt diplomacy, deepening authoritarian influence. Together, these forces erode state capacity, destabilize the region, and pose a direct challenge to US security and economic prosperity.

Stable, transparent governance in LAC reduces migration pressures, disrupts criminal networks, and creates economic opportunities that benefit both US and Latin American citizens. As the United States reassesses its foreign assistance strategy, democracy assistance can be enacted as a strategic investment to make the hemisphere—including the United States—stronger, safer, and more prosperous. We identify three core issues that pose the greatest challenges but promise the greatest rewards if addressed, and provide recommendations to streamline assistance, expand its scope, and engage business and local actors as funders and partners.

Ultimately, democracy assistance in the region remains one of the most cost-effective investments to advance shared security and prosperity.

Regional challenges to democracy and governance

LAC is confronting a convergence of three interlinked challenges that erode governance, destabilize societies, and undermine US security and economic interests. Each reinforces the others and fuels the migration and crime that strain the region. The United States should therefore prioritize addressing these challenges through targeted foreign assistance and investment.

Transnational organized crime and insecurity

Transnational organized crime (TOC) has evolved into one of the most destabilizing forces in LAC. Once localized, criminal groups have grown into sophisticated, multinational networks that traffic drugs, weapons, and people across borders while infiltrating political systems. These networks now operate across nearly every corner of the region, both benefiting from and contributing to weak rule of law and institutional resilience.

Gangs and TOC actors are among the main drivers of insecurity in the region. Although the region comprises less than 10 percent of the world’s population, it accounts for roughly one-third of global homicides. Central America maintains high levels of insecurity, while countries such as Mexico, Ecuador, Colombia, and Peru have experienced sharp increases in violent crime as cartels and gangs battle for control of trafficking routes, urban neighborhoods, and illicit economies. The costs are profound: Latin American Public Opinion Project data show that intentions to emigrate are significantly higher among individuals exposed to crime, while nearly one-third of private sector firms in Latin America cite crime as a major obstacle to doing business, with direct losses averaging 7 percent of sales. Insecurity is not only displacing communities but also undermining prosperity and eroding trust in governments.

The drug trade remains one of the most profitable and damaging arms of TOC. Mexican cartels—particularly the Sinaloa Cartel and Jalisco New Generation Cartel—are the hemisphere’s principal suppliers of fentanyl, methamphetamine, cocaine, and heroin. Their operations extend beyond Mexico and the United States, reaching deep into Colombia, Ecuador, Central America, and increasingly Canada. In 2024, US Customs and Border Protection seized over 27,000 pounds of fentanyl at the southern border—up from 14,700 pounds in 2022. The human toll is staggering: Fentanyl overdoses now kill more than seventy thousand people annually in the United States.

TOC represents not only a law enforcement problem but also a profound institutional and governance challenge. These groups thrive in contexts marked by weak institutions, porous borders, and entrenched impunity. Venezuela’s institutional collapse, for example, directly enabled the rapid growth of the Tren de Aragua gang from one prison to over ten countries. Once established, criminal networks act as corrosive forces—penetrating police forces, judicial systems, militaries, local governments, and even segments of the private sector. Their influence extends into the electoral arena as well: In Mexico’s recent elections, criminal actors not only financed campaigns for local candidates but also threatened and assassinated others, further distorting political competition and undermining democratic accountability. Left unchecked, TOC erodes public trust, distorts markets, and makes effective governance nearly impossible, fueling a self-reinforcing cycle of violence, displacement, and state fragility.

In many countries, governments have proven unable or unwilling to meaningfully confront TOC. Others have stepped up efforts to target these groups through mano dura policies or intensified security operations that, while capable of disrupting trafficking routes, cannot by themselves dismantle transnational criminal networks. Addressing the governance gaps that allow these organizations to thrive is therefore crucial. In this context, US leadership remains essential. Given the cross-border nature of these networks, lasting, viable solutions demand a coordinated regional response. By leveraging its diplomatic influence, security partnerships, military capabilities, and development tools—including technical assistance, institutional support, and investment incentives—the United States can help foster cross-border cooperation, strengthen judicial and prosecutorial capacity, and reinforce institutions to shield them from criminal infiltration. Paired with diplomatic and intelligence support, democracy assistance can play a critical role in disrupting organized crime, safeguarding US security interests, and creating the conditions for more prosperous and resilient communities across the hemisphere.

Rule of law and economic development

Declining rule of law has become an increasingly urgent concern in LAC, as regional indicators have steadily worsened in recent years and several countries have registered some of the steepest declines worldwide. This deterioration both enables transnational organized crime and authoritarianism and imposes enormous costs on national economies. Research by the Atlantic Council’s Freedom and Prosperity Center shows that the rule of law is the single most influential factor for long-term economic growth and societal well-being. Liberalizing markets is not enough: Legal clarity, judicial independence, and accountability are the foundations of effective governance and thriving economies. This is particularly relevant in Latin America, where corruption remains the region’s Achilles’ heel—undermining public spending, fueling fiscal deficits, and weakening financial oversight. Across the region, higher corruption levels are consistently associated with lower gross domestic product per capita and reduced foreign direct investment, costing countries and investors billions in lost growth and opportunity

A particularly distorting force in the region’s economy is the prevalence of kleptocratic networks. These are not isolated acts of graft, but coordinated, systematic efforts to capture state resources and extract rents for political and economic gain. Such networks often comprise coalitions of corrupt political elites, complicit business actors, and criminal organizations. They co-opt the judiciary and prosecutors, while silencing investigations and oversight bodies. Their actions stifle competition, discourage entrepreneurship, and produce unfair monopolies that sideline foreign investors, while draining public coffers of resources needed for development.

The scale of these operations can be staggering. In Venezuela, over the past two decades, ruling party figures and business allies have been suspected of siphoning off as much as $30 billion in public funds through transnational schemes involving front companies, illicit contracts, and offshore accounts. This systemic kleptocracy has not only enriched elites but also accelerated Venezuela’s economic collapse, fueling one of the worst migration crises in the region, including to the United States. In Peru, the Club de la Construcción scandal revealed how an informal cartel of major construction companies colluded to divide up public works contracts in exchange for bribes to officials in the Ministry of Transport and Communications. The scheme operated for more than a decade, was worth billions in inflated contracts, and sidelined honest competitors while draining infrastructure budgets.

Some of the region’s largest corruption scandals have been uncovered by investigative journalists and independent prosecutors. Yet in many cases, impunity prevails, and little progress is made toward prevention or sustained accountability. Strong judicial institutions, effective anti-corruption reforms, and governance are essential for stability and growth. Predictable, rules-based environments make countries far better partners for both domestic and US businesses—creating jobs, expanding markets, and strengthening local economies. Such efforts can also reduce migration pressures, as corruption has been shown to drive both legal and irregular migration. As with TOC, for the United States, supporting rule-of-law reforms is therefore a strategic investment in building a more prosperous, democratic, and secure hemisphere.

Countering authoritarian influence

LAC is home to several resilient democracies that remain close US allies and important trading partners. Yet the region also contains some of the world’s most entrenched dictatorships—Cuba, Venezuela, and Nicaragua—which pose direct threats to stability. Between these extremes lie eight nations that Freedom House classifies as “partly free,” many of which experienced additional democratic declines in 2025. Countering democratic backsliding and protecting the global order is not a values-based mission; it is essential to safeguarding US security, economic interests, and the long-term prosperity of the Western Hemisphere.

The region’s authoritarian regimes illustrate the stakes. Economic collapse and repression have forced 7.7 million Venezuelans, 500,000 Cubans, and tens of thousands of Nicaraguans to flee over the past decade. These governments also generate acute security risks. Nicaragua has positioned itself as a conduit for extra-regional migration, inviting travelers from Africa, Asia, and the Caribbean to enter visa free and transit toward the US border. The Daniel Ortega regime has further been linked to targeted harassment and even assassinations of dissidents abroad, including the 2025 killing in Costa Rica of Roberto Samcam Ruiz, a retired Army major and government critic.

Similarly, the consolidation of Venezuela’s dictatorship has transformed the country into a hub for criminal organizations, including Colombian paramilitary groups and Tren de Aragua. The Nicolás Maduro regime has hosted the Wagner Group while continuing to rely on Russian military advisors, Iranian oil technicians, and Chinese surveillance systems to tighten internal control and repress dissent. Members of the regime have been linked to drug trafficking––most notably through the illicit military network Cartel de los Soles––and, in late 2024, Maduro threatened to invade neighboring Guyana.

At the same time, external authoritarian powers—especially China—are expanding their footprints, particularly in “partly free” states where institutional checks are weak. China exploits governance gaps through surveillance technology, opaque infrastructure deals, and strategic investments in critical sectors—often at the expense of US influence and market access. Over the past decade, China invested $73 billion in Latin America’s raw materials sector, including refineries and processing plants for coal, lithium, copper, natural gas, oil, and uranium. In Peru, Chinese firms paid $3 billion to acquire two major electricity suppliers, giving them what experts describe as near-monopoly control over the country’s power distribution and edging out competitors. Beijing also provides critical technology to regional authoritarian governments and at-risk democracies. In Bolivia, the government deployed Huawei’s “Safe Cities” surveillance systems, raising concerns about mass data collection, particularly during elections.

These developments underscore the importance of countering authoritarianism in LAC as both a security and economic priority for the United States and the region. Betting on democratic renewal in Cuba, Nicaragua, and Venezuela is critical to restoring stability in the hemisphere. At the same time, it is equally important to strengthen “at-risk” democracies to prevent further backsliding. Targeted investments in political party development, anti-corruption reforms, and transparency measures can bolster resilience in these states and reduce the appeal of authoritarian alternatives. Pushing back against China’s growing economic and geopolitical influence in the hemisphere is also essential. By leveraging diplomatic and trade tools, the United States can position itself as a credible alternative to China—particularly by mobilizing investment, fostering public-private partnerships, and advancing governance reforms that strengthen transparency and accountability. Doing so is vital for freedom and security in the region and creates opportunities for business and investment.

Recommendations

Insecurity, weak rule of law, and authoritarianism represent growing threats to freedom and prosperity in the Western Hemisphere. As outlined above, TOC, entrenched corruption, and authoritarian regimes impose heavy economic costs on LAC and undermine democratic governance. At the same time, these forces drive mass migration, placing immense strain on transit and destination countries. Tackling these challenges is a strategic win-win: It can enhance US security and economic interests while advancing stability and prosperity in the region.

As the United States reassesses its foreign policy and democracy assistance strategy in LAC, it should make use of its full range of diplomatic, security, trade, and investment mechanisms—including targeted democracy assistance—to address these challenges.

Move beyond grants to expand the toolkit

The proposed shift toward an investment- and trade-driven foreign policy can go hand-in-hand with democracy assistance and reform. The United States can mobilize financial and diplomatic tools to expand investment as an alternative to Chinese influence, while incentivizing governance, transparency, and accountability reforms that strengthen the region’s resilience against the challenges outlined above.

• Leverage the US International Development Finance Corporation (DFC) to provide an alternative to Chinese financing and invest in projects that strengthen democratic resilience through economic modernization, digitalization, and high-quality infrastructure—particularly in areas vulnerable to authoritarian influence. As Congress prepares to revisit the DFC’s authorizing legislation, it should ensure the agency has long-term funding to deploy its range of tools—including debt financing, equity investments, and political risk insurance—across the region.
• Work with Congress to pass the Americas Act to establish regional trade, investment, and people-to-people partnerships with like-minded nations, fostering long-term private sector development. Use this framework to advance transparency and institutional autonomy reforms—particularly through the proposed Americas Institute for Digital Governance and Transnational Criminal Investigative Units—to ensure partner countries strengthen anti-corruption prevention, detection, and prosecution.
• Use regional forums—such as the Summit of the Americas—to advocate for governance, security, transparency, and accountability reforms to strengthen the resilience of democratic allies and counter authoritarian regimes. The United States should link political reform benchmarks to investment incentives, offering “carrots” for change through regional development commitments.

Ensure democracy assistance makes business sense

A safer and more democratic Western Hemisphere directly benefits economic development and business. The United States should position its domestic and the Latin American private sectors as active partners in strengthening democratic resilience, not just as passive beneficiaries of stability.

• Revive and operationalize America Creceto incentivize and promote reform-linked investments, infrastructure projects, and job creation across the region to counter Chinese influence and advance US interests while bolstering political will through the DFC. Participation should be tied to clear benchmarks on transparency, labor rights, and legal predictability.
• Forge public-private partnerships that co-finance civic education, anti-corruption initiatives, and local development projects, particularly in high-risk areas vulnerable to TOC recruitment and migration.
• Mobilize Latin America’s business elites—among the greatest beneficiaries of economic and democratic collaboration with the United States—to push for and co-fund democracy and governance programs in their home countries. Leading companies, philanthropic foundations, and chambers of commerce should be engaged as active partners in advancing reforms.
• Strengthen and engage with regional initiatives like the Alliance for Development in Democracy—championed by Costa Rica, Panama, the Dominican Republic, and Ecuador—that integrate the private sector into democratic reform and good governance agendas.

Deploy whole-of-government tools

While the State Department plays a central role in US democracy assistance, the scale and interconnected nature of the region’s challenges—spanning security, rule of law, and authoritarian influence—demand a coordinated, whole-of-government approach.

• Leverage the Pentagon’s Defense Institution Building program to strengthen law enforcement reform, bolster rule-of-law resilience, and build institutional capacity to counter transnational crime and human trafficking.
• Provide technical assistance and legal expertise through the Department of Justice, Drug Enforcement Administration, and Bureau of International Narcotics and Law Enforcement Affairs to help countries develop national frameworks that protect transparency, law enforcement, and sovereignty in investment decisions.
• Double down on rule-of-law reforms and projects, particularly those targeting organized crime and corruption. Support vetted law enforcement units, independent anti-corruption actors, and judicial reform initiatives through US, private sector, and multilateral funding channels, including the Organization of American States, the Inter-American Development Bank, and the Open Government Partnership.
• Protect the key pillars of democratic institutions from co-optation by TOC, kleptocratic, or authoritarian actors. This must include courts, election management bodies, political parties, and critical government agencies such as those overseeing infrastructure, development, procurement, and public prosecution. Emphasis should be placed on institutional independence, combating and preventing corruption, and ensuring sustainable financing to strengthen resilience.
• Apply targeted sanctions, Global Magnitsky measures, and trade conditionality to dismantle kleptocratic networks, prosecute corrupt actors, and reward credible reformers.
• Advocate for and support the implementation of global security and anti-corruption standards—including recommendations from the Financial Action Task Force and its LAC branch, GAFILAT (Grupo de Acción Financiera de Latinoamérica), on money laundering, organized crime, and illicit finance—to disrupt TOC and kleptocratic funding networks while fostering safer and more competitive business environments.

Scale the power of local networks

Regional local actors—both within and outside of government—are often the most credible and resilient defenders of democratic governance. The United States should deepen its engagement with these networks while identifying and empowering new partners.

• Partner with trusted community institutions—including religious organizations, civic leaders, businesses, and grassroots groups—on programs that prevent gang recruitment, reduce crime, and promote integrity in high-risk areas.
• Strengthen governance mechanisms to build sustainable local capacity to counter corruption and transnational organized crime.
• Expand the partner ecosystem to include diaspora networks and local community groups, leveraging their resources, expertise, and transnational connections to reinforce democratic resilience.

Push back on regional and external authoritarian influence

Bipartisan US support for organized opposition in Cuba, Nicaragua, and Venezuela has been a cornerstone of regional democracy policy and should be sustained and expanded. At the same time, Washington should back democratic movements and reformers across the hemisphere where authoritarian influence is taking hold.

• Sustain support for dissidents and democratic movements in Cuba, Nicaragua, and Venezuela to prepare the ground for eventual political transitions.
• Invest in independent media.
• Support the next generation of democratic leaders through fellowships, trainings, and political party development, prioritizing authoritarian and high-risk states.
• Collaborate with electoral commissions, legislatures, and political parties with an emphasis on internal democracy, campaign transparency, and long-term institutionalization.
• Assist governments in auditing and renegotiating opaque infrastructure or digital agreements—particularly those with authoritarian powers—that undermine sovereignty, transparency, and public accountability.

The recommendations offered here provide a roadmap to confront the region’s most pressing security and prosperity threats by pairing diplomacy, trade, and investment tools with targeted democracy support. By leveraging the United States’ entrepreneurial capacity and its ability to mobilize multinational and public-private partnerships, reforms can be made more attractive, sustainable, and impactful. This is not charity—it is a strategic investment that advances both US and LAC interests.

At relatively low cost, democracy assistance strengthens governance and open markets in ways that directly serve US security and economic priorities. It helps dismantle transnational criminal organizations, kleptocratic networks, and corruption, while countering the growing influence of authoritarian regimes inside and outside the region. These efforts reduce the flow of illicit drugs and irregular migration, create more reliable markets for businesses, and build stronger partnerships with governments that share democratic values. The outcome is clear: a stronger, safer, and more prosperous hemisphere.

Antonio Garrastazu serves as the senior director for Latin America and the Caribbean at the International Republican Institute (IRI). Prior to this role, he led IRI’s Center for Global Impact and from 2011 to 2018 was resident country director for Central America, Haiti, and Mexico. Garrastazu has worked in academe, the private sector, and government, serving in the Florida Office of Tourism, Trade and Economic Development under Governor Jeb Bush. He holds a bachelor’s degree in political science from the University of Florida, and a master’s and PhD in international studies from the University of Miami. 

Henrique Arevalo Poincot is a visiting fellow with the Atlantic Council’s Freedom and Prosperity Center. A strategy and communications specialist with expertise spanning Europe and Latin America, Arevalo Poincot is pursuing his master’s degree in democracy and governance at Georgetown University.

The future of democracy assistance

This paper series provides an in-depth look at the many complex challenges to democracy around the world and highlights actionable policies that promote democratic governance.

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The post A stronger, safer, and more prosperous hemisphere: The case for investing in democracy in the Americas appeared first on Atlantic Council.

The situation—a second vote in fewer than five months on whether to strip the president’s immunity—caught the attention of a sitting US Congress member as well as former and current heads of state in the region. Judging by their statements, it’s clear that there is confusion about what exactly is happening. Is Costa Rica really in crisis? Is an institutional coup underway?  

A decisive vote in Costa Rica’s Legislative Assembly will take place by December 18, before deputies head out on vacation, on whether to lift President Rodrigo Chaves’s immunity so prosecutors can pursue alleged electoral-law violations. 

Less than a week into the formal campaign period, on October 7, the TSE asked the Legislative Assembly to lift Chaves’s immunity so it can pursue alleged violations related to political belligerence and interference, including participation in campaign-related activities. While it is true that many of the complaints put forth for consideration of the TSE are from leaders of opposition parties, the TSE unanimously accepted fifteen out of twenty-four as admissible for “unwarranted interference.”  

This request to lift Chaves’s immunity is not the first such instance. In July, the Costa Rican Supreme Court requested the national assembly lift the president’s immunity in a corruption case tied to a communications contract financed by the Central American Bank for Economic Integration. In September, lawmakers fell short of the two-thirds supermajority needed to strip Chaves’s immunity in the corruption case. That vote, regarding a sitting president, was a first in Costa Rican history. Now, considering stripping the president’s immunity twice in one calendar year is even more remarkable.  

But it is important to note two things. First, none of these moves constitutes an impeachment: lifting immunity (desafuero) merely opens the door to investigation and a trial while the president remains in office. Second, under Costa Rican law, Chaves is not eligible for consecutive reelection, so to extrapolate that the TSE request for the assembly to consider the removal of the fuero is an institutional coup of some sort is a stretch.  

Soon after the Costa Rica ambassador spoke with US Representative Mario Díaz-Balart (R-FL-26), the congressman toned down his stance on the country’s political situation. Meanwhile, the process in Costa Rica rolls ahead, with a vote on the fuero expected by December 18. Will the deputies at the asamblea entertain a second vote on Chaves’s immunity? The president already appeared before the national assembly’s special three-member commission (two members of the opposition and one “officialist” member) on November 14. Chaves left that hearing before it concluded.  

Should the two-thirds majority be reached this time, it will be uncharted territory for the “Switzerland of Central America.” A successful vote would authorize prosecutors and the attorney general’s office to open a case through criminal proceedings. Importantly, it would not amount to impeachment, nor would it remove the president. The courts, rather than politics at the asamblea, would determine whether charges advance. The presidency will continue to function, and the electoral calendar will continue to advance, as well. And regardless of the outcome, the term-limited Chaves will leave office and a new government will be inaugurated come May 8, 2026. 

Costa Rica’s confrontation is, so far, a stress test of checks and balances operating within its constitution and electoral laws. 

For Washington, the attention to Costa Rica reflects the recognition that Central American stability matters for the world’s largest economy. US efforts to strengthen democratic resilience in its own neighborhood must be accompanied by support for processes and procedures—not specific players. Doing so effectively would help advance US interests in the hemisphere.  

María Fernanda Bozmoski is director, impact and operations and lead for Central America at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the center’s work on Mexico and Central America and supports the director with the center’s operations. 

The post Is Costa Rica in a political crisis?   appeared first on Atlantic Council.

Hopes are high that this moment could present momentum for the long-awaited democratic transition in Venezuela, and US policy should continue to press hard for it. Still, while Washington should continue to ratchet up pressure on the Maduro regime, a military intervention would hold first- and second-order risks to global energy and food markets.

Strikes limited to counternarcotics targets are unlikely to affect energy production or food markets. But any action attacking the regime itself or damaging single points of failure in the energy system, such as ports, is another matter altogether. Some proponents of military intervention in Venezuela are hopeful that any intervention would be relatively small and contained; skeptics, conversely, warn that air strikes could unleash unpredictable forces and lead to “difficult choices about whether and how to escalate.” With President Donald Trump reportedly seeking to speak directly with Venezuelan strongman Nicolás Maduro, a diplomatic solution may also emerge. We leave it to others to assess the dynamics and pathways of a coercive campaign. Still, if a small-scale intervention becomes a large one, several consequences are likely. 

Even with high US domestic oil production, spare production capacity in the Gulf, and a well-stocked US Strategic Petroleum Reserve buffering crude markets, the loss of Venezuela’s heavy-sour barrels would tighten already-strained diesel markets. More dangerously, a conflict could spill over into regional oil or ammonia infrastructure—especially Trinidad and Tobago’s Point Lisas complex—likely resulting in an increase in fertilizer and food prices, which could potentially set off another bout of global inflation. 

Global oil markets and Venezuela 

Although it is still a significant player, Venezuela is at present not as important in oil markets as it was in pre-Hugo Chávez times. Venezuela exports stand at 800,000 barrels per day (bpd), or a little under 1 percent of total world oil consumption (although exports briefly exceeded one million bpd in September). Most export volumes head to China, directly or indirectly, while US imports have fallen below 100,000 bpd in recent months. 

In the event of a US military intervention, Venezuelan production and exports would almost certainly plummet. Furthermore, US military strikes on Venezuelan territory could cause the regime to retaliate, especially if the United States attacked Venezuelan military installations or leadership offices. Venezuelan retaliation could take several forms, including sabotaging production to handicap a potential successor regime, attacking neighbors that seem to be supporting US military action, and fomenting internal political instability that makes continued operation unsafe.

Venezuela’s history shows how quickly production can drop even absent a military intervention. In 2002–2003, a Venezuelan oil workers’ strike, led by opposition to then President Hugo Chávez, reduced Venezuelan oil exports from three million barrels per day to less than 200,000 barrels per day. 

At the same time, high US domestic crude and natural gas liquids (NGL) production, significant spare production capacity in Gulf states, and continued expectations for an oil market glut will put a ceiling on global oil prices—even if Venezuelan production outages occur in the short term. Additionally, the US Strategic Petroleum Reserve is well stocked. 

But the longer-term picture is much more mixed. Venezuelan production would likely require several years to recover from any large-scale US military intervention. Though imperfect, comparative experiences point to the challenge of bringing postwar oil production back online. During the US invasion of Iraq, for instance, Iraqi liquids production fell to zero for several months after the invasion; annual production did not return to pre-war levels until 2011. Libya’s experience, too, suggests a disorderly political transition can severely hamper oil production. Since Libyan leader Muammar al-Qaddafi’s overthrow in 2011, Libyan liquids production has never returned to prior levels: 2024 annual production stood at 1,188 kbpd, down 32 percent from 2010 levels.

The incompetency of the Chávez and Maduro regimes leaves open the possibility that a post-Chavismo Venezuela could eventually see higher production. Indeed, the Venezuelan opposition has released a thoughtful and credible plan for bolstering oil and mining production, including by pursuing best practices. However, rebounding production will depend on several factors. For example, capital and labor will need to return to Venezuela. State-owned Petróleos de Venezuela, SA, which is debt-laden and has deferred maintenance on key pieces of field infrastructure, will need to be overhauled. And many of Venezuela’s reservoirs, which have suffered from poor production practices, will need to be restored. 

Long-term Venezuelan outages would therefore likely lift oil prices, especially diesel. This is because Venezuela’s heavy-sour crude oil grades are highly suitable for producing diesel, which is a key input into virtually every industry. Recently, the International Energy Agency has warned that middle distillate markets—including diesel—are already tight. Accordingly, if Venezuela production is removed from the market, then diesel prices could shift higher, which is likely to increase global inflation. 

Indeed, if US policymakers undertake military intervention in Venezuela, then they should both anticipate higher inflation via diesel markets and prepare for a post-intervention environment wherein Venezuela’s oil production takes time, and requires support, to fully rebound. 

Horizontal escalation risks

A US military intervention in Venezuela might have wider regional impacts should the Maduro regime, faced with an existential threat, escalate a conflict horizontally to other countries or regions via semi-deniable proxies.

Horizontal escalation would expand the aperture of commodity-related risks. For instance, energy infrastructure in Colombia, especially pipelines, could be one such target, given links between Caracas and the ELN, a US-designated foreign terrorist organization. The ELN operates extensively in the Venezuela–Colombia borderlands, where the Caño Limón-Coveñas pipeline has been regularly attacked since it opened in 1986, including as recently as July of this year. An attack by ELN on a Colombian pipeline—either implicitly or explicitly supported by Caracas—would offer Maduro an opportunity to increase the costs of a conflict in an asymmetric or deniable manner, as even short-lived outages in Colombia would compound Venezuela’s supply losses and harm US refinery economics.  

Maduro seems unlikely to approve an attack on Colombian infrastructure, for now, given his need for a diplomatic lifeline with Colombian President Gustavo Petro, a fellow leftist. But his calculus could shift after Colombia’s upcoming legislative and presidential elections in early 2026. If leftist candidate Iván Cepeda prevails, Maduro will likely still seek to preserve ties with Bogotá, but after the election he is less likely to worry that escalation might electorally empower his opponents. If a non-leftist candidate wins, conversely, Maduro may feel freer to escalate inside Colombia. Crucially, Colombia’s exports of heavy and medium sour crude oil, including medium-sour production in Caño Limón sent to the Coveñas terminal on the Caribbean for export, are highly suitable for producing middle distillates. About 40 percent of Colombian crude oil was shipped directly to the United States in 2024, and many Panama-bound shipments are transshipped to US Gulf Coast refineries. Accordingly, losses of Venezuelan and Colombian crude may significantly impact domestic fuel prices, especially for diesel. 

Trinidad and Tobago’s ammonia supply chains are also vulnerable to disruption in a military conflict, especially one that expands beyond Venezuela. While accounting for only 2.5 percent of all global ammonia production, Trinidad and Tobago is responsible for 15-20 percent of global ammonia seaborne trade, and the country is the second-largest exporter to the United States, after Canada. This supply chain centers on Point Lisas, which sits on Trinidad’s west coast in the Gulf of Paria, directly facing Venezuela, about fifty kilometers away, leaving it exposed to disruption and retaliation in a prolonged conflict with the Maduro regime. Point Lisas has limited redundancy, with potential single points of failure such as the Phoenix Park Valve Station, a key hub for processing and routing gas feedstock to ammonia plants.

If Maduro sympathizers disrupt Point Lisas with cyber or kinetic attacks—including asymmetrical methods such as drones—then the effects will be felt throughout the Americas and potentially beyond. While the United States and Europe are Trinidad and Tobago’s largest ammonia partners by volumes, Mexico’s, Chile’s, and Brazil’s fertilizer markets are disproportionately exposed. Accordingly, an outage at Point Lisas would reverberate throughout the region. Mexico, too, would be impacted: It imported 250,000 tons of anhydrous ammonia from Trinidad and Tobago in 2024, while domestic ammonia production stood at only 319,000 tons. Due to deep US-Mexico agricultural ties—22.8 percent of US agricultural imports in 2024 by value hailed from Mexico—a fertilizer disruption at Point Lisas would likely send US, regional, and global food prices higher. 

Carry a big stick, but think before swinging

The Maduro regime is one of the world’s worst, and it lost its legitimacy long ago. And while Maduro must step down, US policymakers should think carefully about the consequences that would accompany military force.

The United States’ strong domestic oil production and Strategic Petroleum Reserve, Venezuela’s limited role in global oil markets, and a projected state of market oversupply all lower the probability of an immediate crude-oil price spike in the event of hostilities. Yet a long road ahead for Venezuela’s oil production to rebound, as well as the possibility of spillover to other oil- or ammonia-producing countries, speaks to a wider and perhaps deeper set of inflationary risks that policymakers and market participants should take into account. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. 

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

The post How a Venezuela shock could raise global oil and food prices appeared first on Atlantic Council.

Crypto adoption is Venezuela’s response to US sanctions

In recent years, the United States has imposed sanctions on Venezuela in response to the Maduro government’s repression of opposition groups and “subversion of democracy.” Much of this US economic pressure has come since 2017, when the Trump administration issued a series of executive orders that it then expanded. In 2019, the United States enacted full blocking financial sanctions against PDVSA (the state-owned oil company Petróleos de Venezuela, S.A.) and the Central Bank of Venezuela. 

Venezuela’s oil sector was particularly exposed, given its complete reliance on PDVSA—a company already weakened by aging infrastructure and chronic underinvestment. This overreliance on PDVSA left both the energy sector and Venezuela’s broader financial system acutely vulnerable to financial sanctions.

This year, the Trump administration has increased economic pressure further, imposing a 25 percent tariff on buyers of Venezuelan oil in March. However, the Maduro government has not yielded to US economic pressure by ceding power. Instead, it has adopted sanctions evasion methods developed by China, Russia, Iran, and North Korea—a group for which my colleague Kimberly Donovan and I coined the term “Axis of Evasion” due to their shared tactics and cooperation in circumventing Western sanctions. 

Like Iran and Russia, Venezuela needed to receive oil payments from China outside the reach of Western financial oversight. Transacting with cryptocurrencies is one such evasion method, which North Korea, for example, has used in the past to launder the proceeds of cybercrime. Last year, Russia softened its restrictive stance on cryptocurrencies by allowing companies to use them in cross-border trade. Reports from this year indicate that Russia has been receiving oil payments from Chinese and Indian customers in Bitcoin and other cryptocurrencies, with transaction volumes reaching tens of millions of dollars. 

The Venezuelan government has spent several years experimenting with cryptocurrencies, most notably with the launch of the state-backed petro (PTR), which was launched in 2018 and collapsed in 2024. As US sanctions on Venezuela intensified in 2019 and the years since, the Maduro regime grew increasingly interested in leveraging digital assets to facilitate oil transactions—leading to US Department of Justice indictments against individuals brokering these deals. Over the past year, Caracas has turned to USDT, a dollar-pegged stablecoin issued by the offshore company Tether, as an alternative vehicle for international payments.

Tether has previously faced scrutiny over its alleged involvement in illicit finance and money laundering. Notably, Tether has also worked with the US Department of Justice in an investigation that led to the dismantling of the online infrastructure supporting Garantex, a sanctioned cryptocurrency exchange implicated in facilitating Russia sanctions evasion and money laundering by transnational criminal organizations. By 2024, Tether had also frozen forty-one wallets that were using USDT to evade sanctions on Venezuela’s oil. 

By the end of first quarter of 2024, PDVSA began requiring new clients to use digital wallets and make payments in USDT for spot oil deals. Subsequently, Venezuelan authorities enabled a limited number of banks and exchange houses to offer USDT to private companies, in exchange for bolívars. In July alone, an estimated $119 million in cryptocurrencies were sold to the private sector. This shift marked the growing use of cryptocurrencies, predominantly USDT, as a substitute for physical US dollars in domestic financial flows. While crypto still represents only a small share of total oil trade by value, it plays an outsized strategic role by offering sanctioned regimes a parallel payment channel outside traditional banking.

Sanctioned oil trade schemes between China and Venezuela

Similar to other “Axis of Evasion” countries, Venezuela transports oil to China via shadow fleet tankers—sometimes called “ghost ships”—employing at-sea evasion tactics such as turning off trackers during ship-to-ship transfers and rebranding the Venezuelan crude oil as Malaysian. By 2020, official Chinese imports of Venezuelan oil dropped to zero, while Malaysian oil imports surged to a sixteen-year high. 

Like Iran and Russia, most of Venezuela’s oil is refined by small independent Chinese refineries known as teapots, primarily located in Shandong province. Although China officially halted imports of Venezuelan crude after sanctions in 2019, China remains the primary destination for Venezuelan crude exports. In September, approximately 84 percent of Venezuela’s exported oil went there, either directly or indirectly. Thus, it is widely reported that Venezuelan oil goes to China, and that Venezuela ends up with USDT. What remains unknown—and needs investigation—is the payment chain that connects these two facts.

New Chinese investments in Venezuela’s oil sector

Venezuela has historically had investments from Chinese companies in its oil sector. While China National Petroleum Corporation halted operations in Venezuela in 2019 due to the risk of US secondary sanctions, reports from August indicate that the smaller China Concord Resources Corp (CCRC) is investing one billion dollars in two Venezuelan oil fields. In May 2024, CCRC signed a twenty-year shared production agreement, aiming to produce sixty thousand barrels per day by the end of 2026. Under this deal, lighter crude will be supplied to PDVSA, while heavier crude will be exported to China. 

This development carries two major implications. First, it challenges the strategic framework through which the United States has traditionally approached sanctions on Venezuela. Washington has long operated under the assumption that escalating sanctions on Venezuela’s oil sector would deter foreign companies from operating there due to the risk of secondary sanctions—and, until now, that assumption has largely held. A twenty-year production agreement with a smaller Chinese firm, however, suggests that Beijing may no longer be willing to adjust its trade and investment decisions in Venezuela according to US sanctions.

Second, if CCRC can indeed raise production to the stated levels and deliver half of the output to Venezuelan authorities, restricting the Maduro regime’s access to cryptocurrencies may become the only remaining lever to curb its oil revenues. That said, CCRC has no prior drilling experience, underscoring the need for caution and close monitoring of whether it can realistically meet its production targets.

What should the US do next

Recent reporting by Reuters and the New York Times indicates that sanctioned entities—including PDVSA—are now using crypto to receive oil payments. To ensure the Maduro regime is not using cryptocurrencies to undermine the Trump administration’s sanctions strategy, the US government, in coordination with partners and allies, should build out the intelligence picture regarding Venezuela’s use of stablecoins and other digital assets to evade sanctions. After identifying the key actors and wallets involved, the government can use targeted sanctions and law enforcement actions, consistent with past actions against Venezuelan oil-trade–related schemes. It should also share relevant information with private-sector partners, particularly stablecoin issuers and exchanges. The government should then request their cooperation on freezing wallets linked to sanctioned individuals, which issuers and exchanges have done before.

Understanding how to counter sanctions evasion through cryptocurrencies is critical—not only in the context of Venezuela, but for the overall integrity of US financial sanctions. Our Axis of Evasion research shows that sanctioned regimes often replicate one another’s tactics to bypass restrictions. With Russia’s oil giants Lukoil and Rosneft now under sanctions, Moscow is likely to adopt Venezuela’s approach of using stablecoins to facilitate oil payments from Chinese buyers. Developing a clear strategy for how US sanctions and law enforcement authorities address the use of dollar-pegged stablecoins and other cryptocurrencies is therefore essential. Doing so would not only disrupt Venezuela’s ongoing sanctions evasion efforts. It would also send a powerful signal to other heavily sanctioned countries that the United States will not tolerate the use of digital assets to undermine its sanctions regime. 

Maia Nikoladze is the associate director of the Economic Statecraft Initiative at the Atlantic Council’s GeoEconomics Center.

Energy Sanctions Dashboard

This dashboard focuses on US sanctions and restrictive measures placed on crude oil from Russia, Iran, and Venezuela—including the unintended consequences and the lessons learned.

The post How Venezuela uses crypto to sell oil—and what the US should do about it appeared first on Atlantic Council.

TO: Secretary of State Marco Rubio
FROM: María Fernanda Bozmoski, Isabella Palacios, and Jason Marczak
SUBJECT: In the upcoming Honduras election, the US must defend democracy and its economic interests
DATE: November 24, 2025

What do world leaders need to know? Our “Memo to…” series has the answer with briefings on the world’s most pressing issues from our experts, drawing on their experience advising the highest levels of government.

Bottom line up front: On November 30, 2025, Honduras will hold one-round general elections in which the candidate with the most votes wins the presidency. As things stand, neither the credibility of the process nor an undisputed result is guaranteed, and any outcome is likely to trigger a contested election—a déjà vu of 2017’s post-electoral crisis. This time, however, the election carries significant stakes for the United States: it could affect US-Honduras security cooperation, reshape geopolitical competition following Honduras’ 2023 pivot to China, and test President Xiomara Castro’s push to expand military involvement beyond constitutional limits, including subordinating the armed forces directly to the presidency rather than the electoral authority. The United States should step up its monitoring of this election because the instability it could trigger would reverberate well beyond Honduras.

Background: An x-ray of Honduras

Over six million Hondurans will head to the polls on Sunday, November 30, to elect a new president, 128 members of Congress, 298 mayors, and twenty representatives to the Central American Parliament.

These are the broader domestic and geopolitical dynamics at play:

Electoral context

The general elections follow March’s chaotic primaries, during which logistical hurdles affected an estimated 1.3 million voters in Tegucigalpa and San Pedro Sula, out of the 5.8 million eligible voters nationwide. Many citizens had to cast their ballots the following day, and in some cases up to a week later, due to delays in opening polling centers or receiving voting materials. These disruptions triggered serious clashes within electoral institutions, including the National Electoral Council (CNE) and the Electoral Justice Tribunal, and between them and other public bodies such as the armed forces and the attorney general’s office¹. These disputes ultimately delayed key steps in the electoral timeline, including the adjudication of the contract for the company that would transmit preliminary results (TREP) on election day.

In the months since, operational gaps have widened. The CNE delayed contracting satellite connectivity for remote voting sites. Then, a logistics contractor withdrew in early November—just days before the vote—citing delayed contract awards and lack of guarantees for election-night performance. With only twenty-two days remaining, the CNE launched a “fast track” procurement to replace both the connectivity and logistics functions, compressing timelines that typically require months of testing and coordination.

The Organization of American States, one of sixty-eight institutions set to observe the elections, has already deployed its mission and issued statements raising concerns about on-the-ground conditions for citizens to exercise their right to vote. The European Union (EU) was also invited to participate as an observer, with approximately 120 delegates stationed across the country. In total, there are roughly five hundred international observers on the ground. Worrisome, however, is that in a span of forty-eight hours, one of the national observing institutions quickly accredited over nine thousand additional delegates—many close to the ruling party.

Altogether, logistical challenges; a shift toward an increased role of the military in the elections—including directly asking the transportation company for the location of the GPS devices that will be used on election day—; the attorney general’s harassment of electoral authorities; institutional tensions; and the “express” accreditation of local observers have undermined confidence in the vote. This has opened the door for results to be questioned, regardless of the outcome, putting Honduras’ democratic stability and key US interests at risk.

Security in Honduras

Violence and extortion remain pervasive in Honduras. The country has the highest homicide rate in Central America, with an estimated 25.3 homicides per 100,000 in 2024. To fight drug traffickers and gangs, the current administration has repeatedly declared a “state of exception” since 2022, following the model of neighboring El Salvador. The latest extension of the emergency declaration was on November 12, for an additional forty-five days. However, the impact of this measure is unclear, as homicide rates in municipalities have only slightly decreased—both in areas where the measure is in place and where it is not.

Importantly, the country is a main node of cocaine transit toward the United States, and a former president, Juan Orlando Hernández, a central figure and ultimate winner of the contested 2017 election, is now serving a forty-five-year sentence for drug trafficking in the United States.

In an important reversal, and less than a month after the inauguration of the second Donald Trump administration, Honduras renewed an extradition treaty with the United States, which was on the brink of expiration. The Castro government had threatened cancellation, framing US extradition pressure as interference and coup-plotting. The renewed treaty now extends through the end of Castro’s term, but post-election instability could again put it at risk if a power vacuum emerges in Tegucigalpa.

US military presence

The Soto Cano Air Base (previously known as Palmerola) in Honduras has been home to the US Southern Command’s Joint Task Force-Bravo since 1983 and was originally established as a strategic hub during the Cold War. Soto Cano is the main platform for US military presence in Central America and one of only two major bases in the broader region, the other being Guantánamo. The base has the capacity to rapidly deploy counter-transnational crime missions, humanitarian assistance, and disaster response—including the recent deployment of personnel and supplies to Jamaica following Hurricane Melissa. Because Soto Cano is an important regional operational hub for the US military, political stability in Honduras is key to ensuring that US missions and broader security efforts can continue without disruption.

Migration cooperation

Honduras closely cooperates with the United States on migration. As part of this effort, the Cooperation in the Examination of Protection Requests agreement was signed in Washington on March 10, 2025, and entered into force in June. It allows the United States to send certain non-Honduran migrants to Honduras to seek protection there, rather than on US soil. The arrangement builds off a 2019 asylum cooperative agreement signed under the first Trump administration, which allows the United States to send asylum seekers to Honduras. Political stability will influence Honduras’ ability to continue these agreements effectively and affect broader regional migration flows.

Trade and investment between the US and Honduras

As a founding partner of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), Honduras is closely linked to US markets. Bilateral trade totaled almost $13 billion in 2024, with a surplus in favor of the United States of $2.4 billion in 2024. Currently, more than two hundred US companies operate in the country, and foreign direct investment from the United States totaled $1.4 billion in 2024. However, investors continue to face challenges including regulatory uncertainty, unpredictable tax enforcement, unreliable and expensive electricity, and poor infrastructure—a challenge shared across most Central American countries.

Affronts to US investment in Honduras are not new, but have risen since the early days of the Castro administration, as exemplified by a bipartisan letter from Senator Bill Hagerty and then-Senator Ben Cardin in 2022, which raised the alarm bells. Legal uncertainty has increased under the current administration, following the Supreme Court’s September 2024 ruling declaring the 2013 creation of so-called Zones for Employment and Economic Development unconstitutional, raising concerns about the future of US investment in these zones. Just a month prior, in August 2024, Honduras exited the International Centre for Settlement of Investment Disputes (ICSID), a World Bank institution that provides specialized arbitration facilities to settle investment disputes. This means that, after the withdrawal, any private complaint against the state of Honduras is no longer subject to the ICSID’s jurisdiction, creating a big gap for US commercial interests. Honduras is the fourth state to exit the ICSID, after Bolivia, Ecuador, and Venezuela.

Since April, following the announcement of the Trump administration’s tariff strategy, Honduras has been subject to the baseline 10 percent reciprocal tariff. Unlike El Salvador and Guatemala, the country has not secured an Agreement on Reciprocal Trade, which could reduce tariffs if non-tariff barriers—such as restrictions on US agricultural products, intellectual property protections, and digital trade—are addressed. Honduras has not yet initiated negotiations toward such an outcome and has shown no indication that it will do so before the Castro administration leaves office.

Ties with China

In March 2023, Honduras broke diplomatic ties with Taiwan. Soon after, it launched foreign trade agreement negotiations with China, implementing an “early harvest” trade deal in September 2024. This switch intended to open more commercial opportunities for Honduran commodities and secure Chinese financing for strategic infrastructure projects. However, the move has not significantly benefited Honduran exporters, particularly since Honduras’ once-thriving shrimp industry is now in crisis due to smaller purchase volumes and lower prices from China. In 2024, Honduras’ trade deficit with China reached $2.52 billion dollars. The country exported only $35.9 million, while imports from China totaled $2.55 billion. As of June, the deficit already stands at $1.41 billion. While exports are expected to rise this year, they remain far from matching imports from China.

Engagement with China has grown mainly in the energy sector, including Chinese participation in the Patuca II and III hydroelectric projects, and a letter of intent signed in May between Honduras’ Ministry of Energy and China’s Global Energy Interconnection Development and Cooperation Organization to advance technical cooperation and support additional Chinese energy investment in Honduras. This latest agreement appears to be a reactive or preemptive response from Beijing to make up for unmet expectations vis-à-vis Honduras. Candidates in the upcoming election have raised these perceptions, with only one of the three leading contenders indicating that she would maintain the course of Honduras-China relations going forward.

Three takeaways: Why this election matters to the US

1. A messy election aftermath could directly affect US security interests
   
   The chaotic primaries and the months after have exposed concerning institutional weaknesses: delays in procurement (from the technologies to transmit preliminary results and ensure wide connectivity across the country to the transport of ballots), technical inefficiencies, competing legal interpretations, and interference from other bodies, coupled with little willingness to compromise for the stability of the election process. These events, and the emerging narrative that the TREP is unreliable for technical reasons—potentially planting the seeds of manipulation—are driven by the incumbent LIBRE party and have undermined public confidence in the electoral system. Ultimately, it might even discourage Hondurans from voting on November 30. If citizens have little trust in the electoral apparatus, what mandate will the next president govern with? A post-vote power vacuum could risk the stalling of joint US-Honduras operations and extraditions—a top priority of the current US administration—and could see the emergence of narratives against the extradition treaty, which LIBRE threatened to end in August 2024.
   
   
2. Shared US-Honduras economic priorities rely on electoral stability
   
   With more than two hundred US companies operating in Honduras across the apparel, food and beverage, and business process outsourcing sectors—all of which depend on consistent rules, the CAFTA-DR framework, and the assurance of arbitration against non-compliant governments—a stable Honduras is essential to protecting already vulnerable US investments. If the country were to experience civil unrest after November 30, US supply chains and investor confidence would face disruptions. Even a brief period of instability could push the country’s risk up considerably, with internal actors committed to short-to-medium-term chaos until the international attention moves on to other crises.
   
   
3. The influence of nefarious actors in the region
   
   Regardless of political affiliation and views, all three candidates have reinforced the importance of the United States as a critical partner for Honduras. Both opposition candidates have explicitly pledged to revert recognition to Taipei. Extra-regional players, including China, might exploit the uncertainty to press for quick wins and expand their influence. The United States should also watch for growing Russian influence, especially after Russia announced in April that it would open a diplomatic office in Tegucigalpa to advance bilateral cooperation and allow more direct communication. Closer ties to these actors could shift from transparent, rules-based processes to opaque deal-making.

Recommendations for US policy in the lead-up to the elections

• Issue pre-election statements underscoring that the United States is closely watching the upcoming election, emphasizing transparency in the tally, uninterrupted operation of the TREP, and full access for accredited observers. Reinforce messages of swift action—including sanctions and visa revocations—against those who seek to undermine the integrity of the process.
• Support democracy in Honduras and lead the international community in reminding the Honduran armed forces of their constitutional role in the electoral process: to protect the vote and remain neutral—without conducting a parallel or political vote.
• Track electoral logistics closely, including the scheduled 9:00 pm announcement of preliminary results on November 30, which can be monitored by the US Embassy in Tegucigalpa in coordination with international observers. The EU Electoral Mission report, expected two days after the vote, will be important for determining next steps.
• Nominate a US ambassador to Honduras before the next government takes office in January.
• Send a high-level US diplomatic delegation to Tegucigalpa for the inauguration, potentially including the secretary of state and secretary of war, to show that the United States is closely monitoring developments that could affect its national security interests.

María Fernanda Bozmoski is director, impact and operations and Central America lead at the Adrienne Arsht Latin America Center at the Atlantic Council.

Isabella Palacios is a program assistant at the Atlantic Council’s Adrienne Arsht Latin America Center.

Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center. 

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

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On November 22, Jake Sotiriadis, nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, appeared on Fox News to discuss President Trump’s proposed Russia-Ukraine peace deal and the administration’s actions in Venezuela.

Fellow

Jake Sotiriadis

Nonresident Senior Fellow

GeoStrategy Initiative Scowcroft Center for Strategy and Security

Defense Policy Europe & Eurasia

The post Sotiriadis on Fox News on Ukraine peace deal, Venezuela appeared first on Atlantic Council.

On the one hand, voices of doubt are rising from some negotiating groups on the ability of the Brazilian presidency and the multilateral process to deliver an ambitious package of decisions that deliver real impact, particularly on finance for adaptation for the least developed countries and small island states. But on the other hand, it is heartening that the heat and humidity of the Amazon have not slowed momentum on elevating the importance of adaptation, resilience, and the role of private finance. Holding this COP in the Amazon rainforest has sharpened the focus for many stakeholders, serving as a powerful reminder that strengthening climate adaptation will require forward-looking climate finance that includes private sector investment.

The private sector—particularly insurers, banks, asset managers, and other financial institutions—has the analytics, risk expertise, and growing appetite to engage in adaptation and resilience finance. And they are ready to work on devising the right investment vehicles to channel that much-needed finance. What they need now are strong policy signals, stable regulatory environments, and practical mechanisms from governments that can connect capital to projects.

One of the most notable developments at this year’s COP was the announcement of the National Adaptation Plans (NAP) Implementation Alliance. Led by the governments of Germany, Italy, and Brazil, as well as the United Nations Development Programme, with the support of the Atlantic Council’s Climate Resilience Center, this initiative aims to improve coherence in the complex ecosystem of financing for NAPs. Streamlining NAP financing will be critical to enable the flow of more public and private resources for climate adaptation and resilience. Over the next year, this initiative will bring together representatives from the private financial sector, multilateral development banks, civil society organizations, the public sector, and other stakeholders to find ways to improve collective action to support the implementation of NAPs.

For the private sector, this means greater visibility into future projects and greater confidence in the investment environment. For governments, it means being better equipped to design projects that meet investor expectations while delivering local resilience benefits.

The Atlantic Council’s Climate Resilience Center, along with the Natural Resources Defense Council (NRDC), will play a vital role in the alliance through Fostering Investable National Planning and Implementation for Adaptation & Resilience (FINI). Announced at a high-level session during the first week of COP30 with representatives of the governments of Australia and Switzerland, FINI is mobilizing more than one hundred actors from civil society, multilateral entities, philanthropy, and the private sector that are already advancing adaptation investments around the world.

Another remarkable development at COP30 was the announcement that fifty-three countries have committed a combined $5.5 billion to the Tropical Forest Forever Facility (TFFF). The TFFF incentivizes the conservation and expansion of tropical forests by making annual payments to tropical forest countries that maintain their standing forest. The initiative is especially notable within the climate community because of its proposed hybrid financing model. The TFFF will mix sovereign and philanthropic funding to de-risk investments on forest conservation, regenerative agriculture, and agroforestry that sustain standing forests. This, in turn, will help attract commercial capital toward these activities.

Throughout COP30, there has been a recognition that the public and private sectors cannot act alone when it comes to climate finance. The announcements and initiatives that have been launched so far at this year’s summit reflected a broad shift: the conversation is no longer about whether private finance should engage in adaptation and resilience, but how quickly financial ecosystems and policy frameworks can be aligned to deliver project pipelines to respond at the scale and speed that climate change requires.

Jorge Gastelumendi is the senior director of the Atlantic Council’s Climate Resilience Center. He formerly served as chief advisor and negotiator to the government of Peru, playing a critical role during the adoption of the Paris Agreement in the government’s dual role as president of COP20 and co-chair of the Green Climate Fund’s board.

The post Dispatch from COP30: In the Brazilian jungle, the private sector takes center stage appeared first on Atlantic Council.

As the US government reconsiders its trade architecture, as well as its trade network in the Western Hemisphere, updating the Central America–Dominican Republic Free Trade Agreement (CAFTA-DR) should be viewed not as a simple economic exercise, but as a strategic investment in US economic security and competitiveness. An upgraded CAFTA-DR could reinforce regional stability at a time when economic fragility, migration pressures, and external influence are converging in the United States’ near abroad.

Aligning CAFTA-DR’s standards with the more modern United States–Mexico–Canada Agreement (USMCA) framework—for example, on digital trade, labor, and supply-chain governance—would create a more coherent North American–Central American production corridor serving US industries, reducing dependence on distant suppliers, and supporting a more orderly regional economy.

China’s expanding presence in Central America and the Caribbean, via critical infrastructure investments, technology partnerships, and growing trade links, has altered regional dynamics and tried to dilute US influence. Modernizing CAFTA-DR is therefore not just an economic update; it is a geopolitical must-have to both secure supply chains and keep key trade partners aligned with the United States.

An updated CAFTA-DR could strengthen supply chain resilience by encouraging the strategic relocation of certain US light and more-labor-intensive manufacturing and by diversifying away from China-dependent networks. It would also enhance digital trade rules, environmental standards, and labor protections, all central issues on today’s economic security agenda. By refreshing these commitments, the United States could help its partners attract high-value investment, foster inclusive growth, and reduce migration pressures fueled by economic fragility.

Moreover, modernization would reaffirm Washington’s long-term commitment to shared prosperity and democratic governance. A proactive US agenda, anchored in fair trade, sustainable investment, and transparent governance, could offer a compelling alternative to China’s transactional and opaque financial approach. In short, an updated CAFTA-DR represents a strategic tool for deepening US partnerships, defending economic values, and reinforcing the hemisphere’s autonomy at a time when geopolitical competition is intensifying.

Enrique Millán-Mejía is a senior fellow in economic development at the Adrienne Arsht Latin America Center of the Atlantic Council. He served as senior trade and investment diplomat for the government of Colombia to the United States between 2014 and 2021.

Antonio Ortiz-Mena, PhD, is a nonresident senior fellow at the Adrienne Arsht Latin America Center of the Atlantic Council. He served as head of the Trade & Economics office of the Embassy of Mexico to the United States between 2007 and 2015. He is the CEO and founder of AOM Advisors.

Rocío Rivera Barradas, PhD, is a senior advisor with AOM Advisors. She served as trade and investment diplomat of the government of Mexico to the United States, based at the Mexican Consulate in Chicago, between 2019 and 2024.

Issue Brief Sep 19, 2025

Secure supply chains for the US run through its closest neighbors

By Jose Manuel Restrepo and Martin Cassinelli

Central America and the Dominican Republic are emerging as key partners for US economic security. Strengthening rule of law, workforce skills, and trade frameworks can secure lasting, mutually beneficial economic integration.

Americas Caribbean

Report Sep 17, 2024

From rhetoric to reality: Nearshoring in the Americas

By the Adrienne Arsht Latin America Center’s Nearshoring Working Group

Over the past five years, global shifts have reshaped the world. China’s rise, US-China tensions, COVID-19, and Russia’s 2022 invasion of Ukraine exposed supply chain vulnerabilities, pushing resilience to the top of the agenda. Latin America and the Caribbean (LAC) can seize the opportunity to provide solutions for US companies through nearshoring.

Caribbean Central America

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post Why modernizing CAFTA-DR matters for the United States, and options for updating the trade pact appeared first on Atlantic Council.

Who advanced and why it matters

Even though he placed second in the first round, the Republican party’s Kast goes into the runoff as the stronger of the two candidates. This is because the other right-wing first-round candidates took a combined 30 percent of the vote—a share that could largely go to Kast in the next round.

Having lost the second-round election in 2021 to current President Gabriel Boric, Kast returned this year with a message centered on security and a smaller state. Jara, the candidate from the governing Unidad por Chile coalition on the left, has been working to expand her reach by presenting herself as grounded in the working-class experience and ready to provide steady governance.

It’s worth looking at the candidates that didn’t make it into the second round, too. One of the biggest surprises was Evelyn Matthei, presidential candidate for the center-right Chile Vamos coalition. She was a front-runner early in the year but lost momentum as Kast rose in the polls. On Sunday, Matthei finished fifth, even though she was polling third in the final weeks. The so-called “voto oculto,” or “hidden vote” not reflected in polling that she needed to win, never materialized. 

The fate of Franco Parisi was also notable. He captured almost one in five votes and reinforced his role as the country’s most unpredictable political force. Throughout the campaign, he rejected ideological labels and marketed himself as neither right nor left—“ni facho ni comunacho.” His voters tend to be skeptical of political institutions and have a reputation for focusing on short-term concerns and outcomes. Surveys already show around 40 percent of Parisi’s voters leaning toward Kast, about 20 percent toward Jara, and the rest undecided. Both finalists now need support from Parisi’s voters to win the runoff. 

The last two standing

Here is what we know about the remaining candidates. Kast comes from the hard right, and throughout the campaign he has underscored his social conservatism and his goal of enacting major spending cuts. He has called for lower taxes for high earners, new investment incentives, mass deportations, and a security model inspired by Salvadoran President Nayib Bukele. Some commentators have compared Kast’s political approach to that of US President Donald Trump. His place in the runoff surprised few since he stayed near the top of the polls all year. After the first-round votes were announced, Matthei and Kaiser endorsed Kast. He now needs to convince center-right voters to unite behind him. 

If Kast comes from firmly on the right, his opponent is situated at least as far on the opposite end of the political spectrum. Jara represents the Unity for Chile coalition and belongs to the Communist Party. She served as labor minister under Boric, and she worked in the Bachelet administration before that. At the same time, she has tried to set herself apart from the current government. Earlier this month, she criticized Boric for not greeting Argentinian President Javier Milei and said she would not have acted that way. She has also questioned the 2026 budget bill. She has highlighted pension reform, wage increases, and a shorter work week as her past achievements. Her security plan includes more resources for the police, biometric border controls, and new prison infrastructure. But she now faces a difficult path. She delivered one of the lowest results for the left in recent cycles. With other left-leaning candidates taking under 1.5 percent of the vote, she must win over Parisi’s supporters to stay competitive. 

What drove voters and what comes next

This election cycle comes as Chile remains politically fragmented. The country has shifted between the right and the left for more than a decade, and the back and forth has made it difficult to build long-term policy. Like much of the Western Hemisphere, concern about security and migration continues to push voters toward tougher positions on those issues. 

This election was also the first presidential vote with compulsory participation in decades. Compulsory voting was practiced from 1925 to 2012 and reintroduced for 2023. More than 13 million people cast ballots—almost double the usual turnout. That surge reshaped the map. Regions with the highest share of first-time mandatory voters showed the sharpest drops for Jara and strongest gains for Parisi. Many of these voters reject both major coalitions and use their votes to punish whoever is in power at the time. 

Security drove much of the debate. Chile remains one of the safest countries in Latin America, but violence has increased in recent years. Groups such as Venezuela’s Tren de Aragua expanded into northern regions, such as Arica y Parinacota and Tarapacá. Kidnappings, extortion, and organized criminal activity have increased. Drug trafficking and migrant smuggling continue to push homicide rates higher. In Santiago, carjackings, home break-ins, and muggings have become more common. Researchers estimate that crime costs Chile nearly eight billion dollars each year.

The economy is also a central issue. Chile has faced slow growth for several years now, and unemployment remains at about 9 percent. Investment has stayed flat. Inflation and the high cost of living shape everyday decisions. Many voters see the current administration of President Gabriel Boric as underperforming on these issues and, it seems, punished Jara for her role as labor minister. One issue sure to feature prominently in the second round is the budget. The legislative commission formed to review the annual budget bill recently rejected the 2026 budget bill, and the two candidates will likely spar over spending plans for next year. 

The finalists now offer two very different paths. Jara supports stronger social programs, more resources for the police, and new tools for policing the country’s borders. Kast favors closed borders, maximum security prisons, and military deployment in the neighborhoods most affected by violence. Chileans must now decide which approach they trust to deliver results.

What it means for the United States

Santiago’s relations with Washington will likely vary depending on who wins, but both candidates face pressure to revive growth and attract investment. While Chile has struggled to bring in foreign direct investment at the levels it once did, the United States is still the country’s second-largest source of foreign investment, much of it concentrated in energy, data centers, and mining. These three sectors are likely to continue to shape the US-Chile economic partnership. 

If Kast wins, Chile will likely move closer to Washington on regional security and migration. Trump’s team has focused on border control and transnational crime, areas where Kast might want to cooperate with the United States. Kast supports market-focused policies and favors free trade. The combination of security cooperation, interest in attracting capital, and a new economic agenda could create space for new bilateral initiatives. Kast may also choose the United States as one of his first international destinations.

If Jara wins, relations with the United States would continue but with more caution. She rarely comments at length on foreign policy and focuses mostly on domestic priorities. She and Trump would likely disagree on several issues; still, she seems to understand the scale of Chile’s security challenges and may seek cooperation on border management and reducing organized crime. If she wins, investors will watch how she approaches productivity, permitting, and the rule of law. These issues rank highly for US companies operating in Chile. Chile now enters a decisive period. The runoff will shape the country’s security, economic recovery, and its role as a partner for the United States. Washington should watch closely. 

Maite Gonzalez Latorre, who was born in Chile, is a program assistant at the Atlantic Council’s Adrienne Arsht Latin America Center.

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Most of this additional investment will have to come from the private sector, but existing approaches to use public funds to generate multiples in private investment—“blended finance”—have resulted in only marginal progress toward the funding levels needed. On average, a dollar of public money across all development finance still manages to “crowd in” only about half a dollar of private money. It will take a broad spectrum of financial structures and institutions to meet the pledges made in Baku including reform of multilateral development banks (MDBs), enhanced securitization, innovative insurance products, improvements in the integrity of private voluntary carbon markets, and new green bond structures. Of these approaches, we believe none are as effective as guarantees, which, if scaled significantly and effectively, could leverage public capital to attract significant multiples of private investment. 

Guarantees are a critical solution and can be implemented at a global scale

A consensus has begun to form in the climate investment community that innovative guarantee structures are likely to be particularly effective—perhaps the most effective—mechanisms to leverage private capital. Only a small percentage of the guaranteed private investment must be contributed in cash, amounting to a conservative estimate of expected loss—as long as the tail risk is adequately protected by other sources. 

In the lead-up to COP30 and in recognition of the potential for guarantee mechanisms to scale climate finance, several public-private coalitions and governmental task forces including the Sustainable Business (SBCOP30) initiative and a team formed by the Brazilian Development Bank (BNDES) have formulated several new guarantee proposals for investments in Brazil. Smaller guarantee structures underwritten by private sources like the Green Guarantee Fund and iTrust, as well as several new guarantee proposals backed by the balance sheets of MDBs or a single sovereign entity, have recently launched. These include Inter-American Development Bank and BNDES guarantees, Norwegian Agency for Development Cooperation and Swedish funds, a newly proposed fund in the BRICS multilateral bank (representing emerging economies Brazil, Russia, India, China, South Africa, and five additional members), and the World Bank’s plan to streamline and triple its offering of guarantees. But these existing guarantee initiatives are also much too small to begin to address the challenge of scaling up new private investment to the levels required. 

To help close the financing gap, we have worked in conjunction with partners and a global advisory committee over the past two years to develop a proposal originated by UK climate investment expert Ian Callaghan to establish an ambitious, innovative, multilateral global guarantee facility to be backed in part by wealthy countries through both cash contributions and their sovereign balance sheets. The facility would offer qualifying private investors who agree to standards of investment, due diligence, and key performance indicators (KPIs) the opportunity to use the facility’s near-comprehensive guarantees to assemble portfolios or funds for climate mitigation investment in EMDEs. The facility would not require the double or triple diligence typically performed in blended finance transactions nor a prior guarantee from the domestic country’s government. We call this proposal the Emerging Market Climate Investment Compact (EMCIC).

The EMCIC facility embodies five necessary elements for the successful de-risking of debt investments for climate mitigation by private investors in EMDEs on the scale required to meet the capital needs pledged in Baku. They are:

1. A streamlined structure. The structure must offer big global investors an environment that is more familiar and attractive to their customary practice, which means reducing overlapping bureaucracies in dealing with governments and MDBs, reducing time delays, streamlining the investment process, and contemplating guarantees of portfolios or funds rather than applying a multi-level review of every project investment.  
2. High leverage. Because cash contributions to capitalize the facility need only be made in the amount of anticipated losses, the cash can be highly leveraged so long as the tail risks are covered at least in part by developed-country sovereign balance sheets, possibly supplemented by a combination of insurance and mezzanine financing. 
3. Due diligence standards. The guarantees should be extended to pre-qualified investors and managers who agree to consistent environmental and due diligence standards  and also sign up to KPIs that will deepen their involvement in EMDEs over time (the “Compact” element of the facility’s title).
4. Additional debt avoidance. To be attractive to EMDEs, the facility must not require backup guarantees on the part of the host EMDE governments, many of whom cannot afford additional sovereign debt.
5. Risk coverage. The facility must provide enough risk coverage so that the investor can secure an “investment grade” rating or one sufficient to meet the fund’s risk/return ratio. Devoting a substantial portion of their concessionary financing or low-interest loans to such a facility should be greatly attractive to developed-country investors, since it would multiply and leverage the total amount of investment generated toward the Baku goal.  

Beyond Belém: Taking guarantees on the road to COP31

Guarantees may be critical and desperately needed for a variety of financial structures, including new portfolios by major infrastructure investors, securitization and public sale of portions of MDB portfolios, green bond funds, and debt for nature swaps.

Given the consensus among academia, proliferating proposals for new guarantee products, and the steep challenge to reach new levels of funding needed, COP30 and the climate finance community should prioritize the development and growth of both existing and more ambitious new guarantee products and facilities.

Moreover, developing countries should challenge wealthy governments to organize a guarantee facility or several regional facilities that use their cash and balance sheets in the most effective possible way. Acting on this step should be an important deliverable for next year’s COP31.

Ken Berlin is a nonresident senior fellow at the Atlantic Council Global Energy Center.

George Frampton is a distinguished senior fellow at the Atlantic Council Global Energy Center.

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Ken Berlin

Nonresident Senior Fellow

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Distinguished Senior Fellow

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EnergySource Nov 13, 2025

Key takeaways from the COP30 Circle of Finance Minister’s report

By Ken Berlin, George Frampton

For COP30, the Brazilian Ministry of Finance prepared a report with input from dozens of finance ministers, institutions, industry, and many others. Read the key takeaways here.

Americas Energy & Environment

EnergySource Nov 10, 2025

The energy conversation has changed—so must COP30  

By Charles Hendry

At COP30, world leaders have an opportunity to reframe how countries work together to achieve energy security, decarbonization, and affordability.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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On November 7, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig published an article in Foreign Policy titled “Trump Should Oust Maduro.” In the article, Kroenig lays out how President Trump could remove President Maduro from power without using military force.

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Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

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China Defense Policy

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US Energy Secretary Chris Wright summed it up well when he said that energy should make societies richer by driving economic growth, rather than making them poorer, through high prices.

In spite of the tensions in today’s energy debates, global leaders need to re-establish a common ground around energy and climate and recognize that the friction does not in fact represent a choice between decarbonization or affordability—we can still strive for both. This becomes all the more important in light of the rapidly growing demand for energy—and especially of electricity—to meet society’s needs, before even considering the rising power demand of artificial intelligence (AI) and data centers.

Reframing the energy and emission conversation

Finding this common ground again means moving on from the term “net zero.” The court of public opinion has made up its mind: net zero is now more associated with higher energy costs than delivering a desirable goal. 

And the target is too absolute. The final 10 percent of the journey to net zero could be as expensive as the first 90 percent, which cannot be a sensible use of limited resources. Achieving 90 percent would still be an extraordinary achievement, and any target needs to be credible to be accepted, with a clear pathway for delivering it.

The old talk of an energy trilemma—balancing security, affordability and decarbonization—is evolving. The conversation now also needs to include sovereignty—those resources within a country’s jurisdiction—and abundance—that which is most abundant should be more affordable. Just as this has led the United States to a policy focused on its vast gas resources, in the United Kingdom and Europe more generally, it means a continuing role for the most affordable renewables.

A new approach to energy and climate needs to start with a set of clear principles, which determines priorities, values and what leaders are looking to achieve.

These can be summarized as follows:

• Global leaders should prioritize secure and sovereign sources of energy to reduce dependence on others.
• Lawmakers should craft energy policy to help drive economic growth, reduce electricity bills, and make countries more competitive. 
• Industry leaders should champion new technologies that address these challenges.
• Public and private actors should ensure that the transition happens in a way that fairly delivers more choice to consumers and empowers them to be part of the solution.

Celebrating and building on achievements

The conversation should also champion what has already been achieved. The UK, for example, in 2022 became the first major economy to reduce its carbon emissions by half (compared to 1990 levels) while still growing the economy by 80 percent; the first major economy to end coal-powered generation; and the country that led the creation of a new global energy industry—offshore wind—in little more than a decade.

These achievements resonate with the public. Polling shows over 60 percent of the public support such policies—far and away the most popular policies of the last Conservative Government. However, it is also clear that people want to secure these achievements in a way that is much more affordable.

Accomplishing this goal has to start from facts—and the facts are promising. Many countries, including some of largest like Brazil and Kenya, get well over 80 to 90 percent of their power from clean resources. Solar generation doubled in the past three years, with China installing more solar power in one month this year than the United States did in the whole of the 2024. And most of the European countries that have lower energy prices than the UK use more renewables. These facts contradict the argument that there is no need for countries like the UK to reduce its emissions if other countries aren’t doing anything—because many are.  

Rather than discarding what has been successful, leaders need to look at how energy systems should evolve in a new era and become more affordable. 

Taking time to enact common sense policies

It is clear now that gas will have a long-term role to play in the energy transition in the UK and elsewhere. It thus does not make sense, as US President Donald Trump has reminded us, to prematurely close the North Sea with all the job losses that would entail. If gas is to be part of the mix, then it makes sense to maximize the recoveries from the UK’s own offshore fields.

A clean, affordable future also means more nuclear, despite setbacks. For a nation that led the world in civil nuclear power, the UK for one seems to have lost its way. Hinkley Point C, initially promised for 2018, will be fifteen years late and significantly over budget. The United States has had similar experiences. That does not mean nuclear isn’t worth the investment, but that leaders need to learn how to build it better and faster. It means more standardization of design and a regulatory approach that learns more actively from other countries. 

COP30: A chance to reset global thinking on energy and climate

These considerations point back to what can be done at COP30. The news from the conference is likely to be disappointing, but it gives those leaders attending the chance to set out a new way of thinking, which shows that they don’t need to choose between energy security, decarbonization, and keeping bills low. Investors need clarity and long-term thinking. We need to see more of that in evidence over the coming days.

Charles Hendry is a distinguished fellow at the Global Energy Center.

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EnergySource Oct 15, 2024

Attention to market realities are key to a successful COP29

By Robert Cekuta

Increasing funds for addressing climate and energy needs in developing countries is a COP29 priority. But it is important to remember that market conditions in recipient countries are critical in determining the success of such efforts.

Energy & Environment Energy Markets & Governance

EnergySource Mar 31, 2025

The future of global energy policy is abundance 

By Charles Hendry

The United States and Europe are diverging on energy policy, with the United States prioritizing low costs and economic growth while the United Kingdom and the European Union focus on decarbonization. But reconciling these approaches is possible through the lens of energy abundance—each country must leverage its most plentiful resources to drive down costs, enhance security, and support sustainability without burdening consumers.

Energy & Environment Energy Markets & Governance

EnergySource Jan 15, 2025

Tripling global nuclear energy capacity is in reach—if the world seizes the moment

By Amy Drake

At COP28, nations and corporations committed to tripling global nuclear energy capacity by 2050, underscoring its essential role in achieving net-zero emissions. Looking ahead to COP30, global leaders must strengthen multilateral collaboration, engage the financial sector, and provide support for new partnerships with the nuclear industry to meet this goal.

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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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Then came Hurricane Melissa, the strongest Atlantic hurricane on record ever to make landfall in Jamaica. Starting late last month and into this week, it tore through the island’s central and western parishes, destroying towns, roads, hospitals, and critical infrastructure.

After days of watching the slow, relentless approach of Hurricane Melissa, one of the authors, Patricia, sheltered in her home in Kingston. She could hear the wind howling at over 100 miles per hour (mph) and rain lashing sideways against the windows—yet even that was nothing compared to the 185 mph winds and torrential rain battering the west of the country, where her friends and family live. While Patricia dealt with small leaks, her friends and family were left with nothing.

In the days after, her family visited some of the hardest-hit communities to distribute care packages, and what they saw was heartbreaking. Entire neighborhoods flattened, the landscape looking as if an atomic blast had torn through it.

At least 40 percent of the buildings and roads on the western part of the island, including Montego Bay, suffered damage. Many small communities, such as the port town Black River, were almost completely wiped out. Such damage is remarkable mostly for its sudden severity, not for its novelty. The Caribbean Community (CARICOM) countries lose an estimated 2 percent of their infrastructure capital stock annually to climate-related damage. Infrastructure upgrades must therefore be a priority, given the region’s exposure to natural disasters and climate change.

This is where US leadership can step in, not as charity, but as shared investment in resilience and regional stability. Jamaica has kept its promises: it has delivered disciplined fiscal reform, climate-smart policies, and innovation in risk financing. It has done what the international system asks of developing nations. Now, it needs that system, and its closest ally, the United States, to respond.

Reality over foresight

The Caribbean remains highly vulnerable to hurricanes and other climate-related events, which can disrupt or extend projects critical to rebuilding, driving up costs. Natural disasters often destroy essential infrastructure, forcing projects to pause or cancel. The question now is how long it will take Jamaica to recover from this cumulative destruction. The immediate response is urgent, but so too is planning for the months ahead. With projections indicating that dangerous climate events will become more frequent and severe, insurability declines and the cost of future investment rises.

The damage caused by Hurricane Melissa already amounts to almost eight billion US dollars, which is equivalent to nearly half of Jamaica’s annual GDP. That figure dwarfs the country’s much-heralded $150 million parametric catastrophe bond that it arranged with the World Bank. This bond, purchased as a form of insurance from capital markets, is designed to trigger after major disasters like this one. Given the strength of Hurricane Melissa and the scale of Jamaica’s losses, it is expected that the 2024 catastrophe bond to pay out its full $150 million value. Even so, Jamaica will need much more to rebuild.

Two sustainable paths forward

The destruction caused by Hurricane Melissa is so extensive that once the search-and-rescue efforts end and basic services such as water and electricity are restored, the damage to homes and infrastructure will exceed the capacity of any single government. Jamaica’s recovery will likely therefore depend on two important factors: innovative financing models that reduce investment risk and strong public-private partnerships that accelerate sustainable recovery.

The Caribbean’s unique and small markets call for creative financing, but there are tools readily available to help US companies invest in infrastructure and the recovery process. Two options are especially relevant.

First, US companies partnering with multilateral development banks and insurance companies can help de-risk investments. To reach the average of advanced economies by 2030, Jamaica would need significant investment, including $5.8 billion for new infrastructure and asset replacement in road infrastructure. It would also need more than $1.4 billion toward telecommunications infrastructure for fixed broadband and 4G networks to reach equivalent levels in developed economies. This significant need offers opportunities large enough to attract major investment. Limited human and institutional capacity make collaboration with third-party institutions even more important. Projects such as the Inter-American Development Bank’s One Caribbean program can help prepare projects, strengthen public-private partnerships, and manage political risk. Equally important is building trust with local partners. Many Caribbean firms are family-owned and community-rooted, which makes relationship-building essential for lasting investment. Joining local business organizations such as American Chamber of Commerce chapters and participating in trade missions can help US investors understand regulations, identify talent, and ensure that projects succeed over time.

Second, public-private partnerships can help the Jamaican government and their partners meet urgent recovery needs while driving long-term, sustainable efforts. Launching public-private partnerships is one of the most effective ways to mobilize capital from local, regional, and private investors. Under these partnerships, governments provide needed guarantees and subsidies to reduce risk, while the private sector generates the capital needed to determine a project’s commercial viability.

It is important that this model is used, as opposed to wholesale private ownership of foreign operators, to avoid eroding projects’ national economic value. Therefore, local equity participation should be prioritized in public-private partnership structures to maximize national benefits and ensure long-term sustainability. The private sector can work with governments and local civil society to strengthen resilience through environmental and social impact assessments. It can also support by improving infrastructure standards, including for underground piping and the usage of hurricane-proof glass, as well as updating building codes where necessary. Insurance can also help keep infrastructure projects afloat during delays and stoppages resulting from natural disasters. At the same time, new investments will need to focus on renewable energy, resilient infrastructure, digital connectivity, and community housing, all sectors where US expertise and capital can make an immediate impact.

Hurricane Melissa tested Jamaica’s strength and found it unbreakable but not inexhaustible. The island has proven that fiscal responsibility is possible. Now it’s time for the United States to prove that climate solidarity is, too.

Patricia R. Francis, who currently resides in Jamaica, is a nonresident senior fellow for the Caribbean Initiative at the Adrienne Arsht Latin America Center, Atlantic Council.

Maite Gonzalez Latorre is a program assistant at the Adrienne Arsht Latin America Center, Atlantic Council.

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Public Event Wed, November 5, 2025 • 3:00 pm ET

Representative Adam Smith on how Congress will shape US defense policy

AN #ACFRONTPAGE EVENT—Representative Adam Smith (D-WA), ranking member of the House Armed Services Committee, shares his priorities for the upcoming National Defense Authorization Act (NDAA) and discusses how Congress can ensure the Pentagon meets today’s security challenges.

Security & Defense United States and Canada

“I don’t think simply committing this large number of assets—hundreds of millions, probably billions of dollars by the time it’s done—to blow up some drug boats in international waters in Latin America is going to make an appreciable difference” in the fight against drug trafficking, said Representative Adam Smith (D-WA), the ranking member of the House Armed Services Committee, at an Atlantic Council Front Page event on Thursday. 

The event, part of the Atlantic Council’s Commanders Series, came amid uncertainty over whether the Trump administration’s campaign of attacks on boats that it claims are trafficking drugs will escalate into an effort to overthrow Venezuelan autocrat Nicolás Maduro.

Based on a briefing he received from the State Department and Department of Defense on Wednesday, Smith said he thinks that “the administration does not want to go to war with Venezuela.” But, Smith added, US President Donald Trump sometimes “very quickly” changes his mind. “So who knows?”

Thursday’s event also came amid the longest US government shutdown in history, with the House out of session even as the National Defense Authorization Act (NDAA) for the next fiscal year has yet to be passed, a situation Smith called “unbelievably disruptive.”

Read below for more highlights from this conversation with Smith, which was moderated by Fox News Chief National Security Correspondent Jennifer Griffin. 

The NDAA

• “The NDAA itself is moving forward,” Smith said of the annual bill, noting that different versions have been passed by the House of Representatives and the Senate, and now the two versions need to be reconciled.
• One of Smith’s priorities for the bill is acquisition reform: “My position is we’ve had the risk wrong for a long time” on defense acquisition policy, said Smith. “We’ve been only focused” on the risk of corruption in the procurement process “as opposed to the risk of not moving fast enough,” he said. One way to speed up acquisition, he said, is “consolidating the decision makers” in the process “instead of having to go through nine or ten different layers.”
• Smith also said he wants to “have procurement people stay in their job longer.” Constant turnover in procurement roles, he said, “doesn’t really help with corruption. It just means that the person doesn’t know the system as well when they’re working on it.”

US strikes on boats in the Caribbean and Pacific

• Transnational drug-trafficking gangs in the Western Hemisphere are “a problem for our national security” and “a problem for Latin America,” Smith said. “You’ve got budding narco-states down there. They’re having a harder and harder time dealing with that. We need to be engaged and involved in that.”
• However, Smith was critical of the Trump administration’s campaign of attacks on alleged drug-trafficking boats in the Caribbean and the Pacific. “It seems very problematic to me that we have decided that drug dealing will now have the death penalty attached to it,” with “no process whatsoever.”
• “They’re certainly bad policy in my view,” Smith said of the strikes.

US military presence abroad

• “I think one of the mistakes that we have made is to assume that our global presence is just a cost that isn’t benefiting us,” Smith said of US troop deployments abroad. 
• Citing threats posed by Russia, China, Iran, North Korea, and transnational terrorist organizations, Smith said that to pull US troops back from allied countries now and “ignore” these dangers “places us at risk.”
• Smith took issue with the Trump administration’s decision to draw down its forces in Romania and noted that there is “bipartisan, bicameral support” in the House and Senate armed services committees “to maintain our presence in Europe and defend them.”
• “If any of you have been to Romania, the Baltics, Poland,” said Smith, addressing the crowd, “they want a lot of things, but the one thing they want more than anything is us,” meaning a US military presence. “They don’t believe Russia wants to come in and kill a bunch of US troops. So a little bit of presence can give us a maximum amount of deterrence, and we’re going to fight that out in the defense bill.”

Daniel Hojnacki is an assistant editor on the editorial team at the Atlantic Council.

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During the Arab Spring in 2011 and 2012, many large-scale demonstrations were led or at least widely participated in by youth. More recently, young voters helped unseat the party that had governed Botswana since independence and caused the vote share of South Africa’s African National Congress party to fall below 50 percent for the first time since the end of apartheid. Youth protesters in Bangladesh, too, ousted the government of former Prime Minister Sheikh Hasina in July 2024.

Even against this backdrop, however, the global scale and impact of the Gen Z protests in the past year is unprecedented.

In Kenya, protests against rising prices, youth unemployment, and corruption broke out after the announcement of new tax hikes in 2024, with further protests taking place in July. In Indonesia, young people have been protesting against high allowances for members of parliament and widespread food poisoning brought about through the government’s school meals program. In the Philippines, public demonstrations sparked by the misallocation of flood relief funds began in September.

And there’s more. Outraged by government bans on social media, young people in Nepal burned the parliament building and ousted the sitting government on September 9. The same month, Peruvian youth protesting against increased crime and corruption sparked conversations about government overhaul. Morocco’s “Gen Z 212” movement, (named after the country’s international dialing code), took to the streets to express their frustration with government funds being directed toward preparations for the 2030 World Cup rather than public services. Just last month, demonstrations by disillusioned youth in Madagascar sparked by water and electricity failures sent the president into exile and prompted a military-led government overhaul.

The root causes of public upheaval vary widely across these seven countries, as do the countries’ political contexts and the ultimate outcomes of their youth-led protest movements. Moreover, these seven countries are by no means the only nations around the world that have experienced mass protests led by young people dissatisfied with the political status quo in the past few years, as evidenced by youth-led protest movements in Serbia and South Korea.

Even so, the past year’s Gen Z protests are worth analyzing together for what they have in common, as these movements are influenced by one another and were all initiated by youth adept at using technology to organize. And, as the Freedom and Prosperity Indexes demonstrate, there are other broad similarities that warrant further examination.

What do the data tell us?

For starters, six of the seven countries score well above their respective regional averages in the political rights component of the Freedom Index, indicating that these countries protect freedom of association, expression, and access to information better than their neighbors. The only exception is Peru, which only recently saw its political rights score dip below the Latin America and the Caribbean regional average.

Secondly, these countries all perform below the regional average on at least one key metric of prosperity, whether that be income, health, or education.

Nepal and Madagascar score higher than their regional averages on political rights

Nepal and Madagascar score lower than their regional averages on income

If people are prone to comparing their conditions to those of their counterparts in neighboring countries, then the data indicate that conditions for protests may be largely defined by an appreciation for relatively high levels of political expression and a frustration with relative shortfalls in income levels, health standards, or education quality.

Lastly, and critically, these countries all have notably high youth populations. In all seven countries, the median age is lower than the global median and the percentage of the total population between the ages of fifteen and twenty-four is higher than the global average.

What the data show, then, is that all these countries have a lot of young people with an understanding of democratic rights, expectations of government accountability, and legitimate grievances related to the lack of government service provision.

Pair that with a growing confidence in their ability to drive change due to youth protests that came before and access to technology that allows them to easily communicate and organize, and you get the globally connected youth movement that has sprung up in recent months.

A force for positive change, or a temporary disruption of the status quo?

Attempting to find explanations for why these youth-led protests are happening is important, but assessing their impact is even more critical. Of the seven countries where protests have occurred or, in the cases of Morocco and Peru, are still occurring, two have experienced full regime change.

In both Nepal and Madagascar, the head of state was removed and replaced with interim governments organized by military figures. Perhaps one explanation for the protests leading to regime change in these two countries is that, in both cases, the military stood by and allowed protests to oust the sitting government before ushering in transitional governments of their liking. In both countries, the political influence of the young people who instigated the upheaval has diminished as new governing regimes have taken shape. Youth in Madagascar have expressed frustration with a career politician and former opposition leader being chosen to lead the country’s National Assembly, and Nepalese protest leaders say they have been frozen out of the transitional government.

The effects of the Gen Z protests in countries that have not experienced regime or leadership change have been mixed. In Kenya, protesters succeeded in convincing President William Ruto to withdraw his contentious tax bill but failed to bring about the systemic change that many wanted. The Moroccan government has responded to protests by pledging to increase health and education spending, but protesters remain unsatisfied.

If the aftermath of the Arab Spring and last year’s revolution in Bangladesh are any indication, establishing more accountable democracies through youth mobilization will prove exceptionally challenging. It is too early to tell whether the recent youth protests will truly bring about the systemic change that young people are demanding, but breaking with history will undoubtedly require young people to sustain the tremendous organized effort they have undertaken.

What’s next?

As the effects of Gen Z protests continue to materialize, there are two important questions to consider.

First, can young people use their numbers and organizational power to make government more democratic, more accountable, and less corrupt in the long term?

Only time will tell whether the answer to this question is yes or no.

The second question is perhaps more interesting: Based on the characteristics of the countries where Gen Z protests have occurred, is it possible to predict where they will happen next?

While exact predictions are impossible, the number of countries with characteristics like those of the seven examined above is limited. For example, Honduras has a high youth population, scores well above the regional average on political rights, and scores well below regional income and education averages. Côte d’Ivoire also has a high youth population, scores well above the average Sub-Saharan African country on political rights, and scores below the regional average on health and inequality. If the governments of either of these countries are widely blamed for corruption or failure to deliver services among younger people, youth populations may well follow the example their counterparts around the world have set. In Côte d’Ivoire, initial frustration over the results of last month’s presidential election could serve as a flashpoint for prolonged unrest.

Côte d’Ivoire scores higher than the regional average on political rights

Côte d’Ivoire scores lower than the regional average on life expectancy

Broadly, the data show that countries within the “low freedom” and “low prosperity” categories that have high youth populations and relatively well-protected political rights, and that perform relatively poorly in at least one indicator of prosperity, appear more prone to Gen Z demonstrations.

This is not to say that Honduras, Côte d’Ivoire, or other countries that share similar characteristics are destined for a youth uprising. But it certainly should not come as a surprise if the movement of youth-led protests spreads further across the developing world.

Protesters in Madagascar took inspiration from the Gen Z movement in Nepal, which was in turn inspired by demonstrations in Indonesia. With protests in Peru and Morocco continuing, it is possible that the wave of Gen Z frustration with a lack of government effectiveness and accountability is only just getting started.

What is certain is that increased access to technology and global information has empowered youth in limited, flawed, and unaccountable democracies to attempt to incite change through organized protest.

The voices of these young people are undoubtedly being heard; whether their demands will be met remains to be seen.

Will Mortenson is a program assistant at the Atlantic Council’s Freedom and Prosperity Center.

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As Maduro faces increased pressure, including the risk of impending US military strikes, he has turned to Venezuela’s autocratic allies for help. According to reporting by the Washington Post, Maduro has implored China, Iran, and Russia for missiles, radars, drones, and other military capabilities and assistance.

Of these three countries, Russia has long been the most important for Venezuela, and Maduro reportedly sent his request directly to Russian President Vladimir Putin in October. But with Russia’s full-scale invasion of Ukraine now in its third year and the country’s already weakened economy facing increased pressure from a new wave of US and European Union sanctions, there are significant limits to the aid that Moscow can provide Maduro—and an open question whether it will continue its assistance if the Venezuelan leader is threatened.

A long-standing partnership

Russia and Venezuela have long had close ties, with the partnership deepening significantly after then Venezuelan President Hugo Chavez reached out to Putin in 2000 for much-needed support. In the twenty-five years since then, Russia has been a vital source of military and economic aid for Venezuela. While Russian state-linked oil companies receive some oil in return for their investments, the real benefit of Moscow’s investment in Venezuela is geopolitical. In return for arms and money, Russia gains a significant foothold in South America, helping to fulfill Putin’s ambitions of making Russia a great power and challenging the United States in its own hemisphere. Russia’s support for Venezuela furthers the Kremlin’s ability to act as a spoiler for US interests, and it has the potential to pull US attention and resources away from opposing Russian aggression in Ukraine and elsewhere in Europe.

Russian oil companies have invested in Venezuela for decades, and this investment helped ensure that Venezuelan state-owned oil company PDVSA was able to sustain its output in recent years. Last month, Russia and Venezuela signed a Strategic Partnership Treaty, which calls for expanded collaboration in sectors such as energy, mining, transport, communications, and counterterrorism. Yet, the financial returns on these investments have not always been substantial. In 2019, Reuters reported that Russian companies had yet to break even on the billions of dollars’ worth of investments in the country’s oil sector over the preceding decade. Even so, Russian companies also have the exploration rights for oil and gas reserves, which are potentially worth billions of dollars. These untapped reserves continue to incentivize Moscow’s sustained presence in the country despite its early investments failing to provide a financial windfall.

Since Russia’s full-scale invasion of Ukraine became the Kremlin’s main priority and a drain on Russia’s resources, Moscow has dialed back interest in, and likely its aid to, Venezuela. However, Russia continues to value projecting the image of a formidable ally, investing instead in cultivating ties through military diplomacy. Russia and Venezuela have carried out at least nine military exchanges since 2022, and this included Venezuela hosting part of Russia’s 2022 International Army Games. Though reduced from earlier years, Russia does still provide Venezuela military aid. In July, Venezuela opened a factory to produce Russian Kalashnikov munitions, and last week, a Russian transport aircraft linked to the Russian military landed in Caracas.

In the past, Russia has been willing to deploy military assets to Venezuela when the regime has faced threats. In December 2018, Putin sent two Tu-160 strategic bombers alongside other aircraft to Caracas as Maduro faced international pressure following the election in May of that year, the outcome of which was rejected by Venezuelan opposition candidates. Then in early 2019, as Maduro continued to face opposition, Russia deployed the S-300 surface-to-air missile system to Venezuela, a clear sign of support.

What will Russian support look like this time?

Russia has had success in propping up its autocratic allies in the past. Most notably, Russia’s direct military intervention in Syria in 2015 helped change the course of the civil war and propped up the regime of Bashar al-Assad for years. But the Kremlin’s support for Assad waned after it launched the war in Ukraine, which contributed to the Syrian regime’s collapse in December 2024. This delivered a blow to Russia’s credibility as a reliable ally for Putin’s autocratic friends and should serve as a warning to Maduro.

Maduro’s appeals to Moscow for help may result in some aid, but he should not expect Putin to be his savior. Russia continues to face real economic constraints that limit its ability to provide an economic lifeline to Venezuela. When Maduro traveled to Moscow in August to mark eighty years of the bilateral relationship, he came home without any new loans or funding. Trade between the two topped out at $1.2 billion in 2024, less than a third of Russia’s trade with other Latin American nations such as Brazil and Mexico. With Russia’s wartime economy facing stagnation and potential decline, Moscow is likely hesitant to spend already limited funds on propping up Maduro.

Significant Russian military support is also unlikely to be forthcoming, even if the United States launches some sort of targeted strike within Venezuela. Today, Russia’s war against Ukraine has made it more reliant on China, Iran, and North Korea. As Russia scholar Angela Stent wrote in an Atlantic Council report released last month, these countries are “essential for Russia’s continued prosecution of the war.” Notably missing from this list of key allies is Venezuela. And even being part of this group, sometimes referred to as an “axis,” does not ensure Russian aid. Though Iran is a critical supplier of Shahed drones, the strategic partnership treaty between Moscow and Tehran signed in January stipulates that Russia will not come to Iran’s defense if it is attacked by Israel or the United States.

Indeed, following the US strikes on Iran earlier this year, Russia responded with words of condemnation, but no tangible actions of support. Instead, Moscow welcomed the distraction from its war in Ukraine that the attacks provided. Should the United States strike Venezuela, Moscow would likely repeat this playbook and avoid coming to Venezuela’s aid in any meaningful way.

Expect Russian bluster over real benefits  

Despite the limits he faces in providing economic or significant military aid to Maduro, Putin certainly still wants to be seen as a reliable and valuable partner to autocracies around the world. One option that Putin may employ is nuclear saber-rattling. Earlier this year, Russian lawmakers proposed deploying nuclear missiles to Venezuela and Cuba. While nothing has come of this threat, such statements allow Moscow to convey support for its ally in Caracas without undertaking action.

Don’t be surprised if, to up the ante now, Putin openly muses about such deployments in the coming weeks. But Russia’s economic constraints and its focus on Ukraine mean that there is simply not much that Moscow can really provide to Venezuela. Bold rhetoric from the Kremlin will continue, but not much else is likely to follow.

Imran Bayoumi is an associate director with the GeoStrategy Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. 

Shelby Magid is the deputy director of the Atlantic Council’s Eurasia Center.

The post Facing the threat of US strikes, Maduro has requested Russia’s help. He shouldn’t expect much. appeared first on Atlantic Council.

One year in, Sheinbaum has made clear that she is not defined by their legacies or actions. Her mandate, and that of her National Regeneration Movement (Morena) party is rare since Mexico’s democratization at the turn of the century. In the June 2024 elections, the president’s party unlocked a lower chamber supermajority and a Senate majority, giving Sheinbaum a rare latitude to enact her agenda. And a year into her term, her approval rating remains high—78 percent, according to an Enkoll poll released this month.

Domestically: Quick yet targeted wins

What’s behind this approval rating? For one, quick and targeted wins. Early in her administration, Sheinbaum secured several quick but meaningful gains with key constituencies. For example, she enshrined several social programs as constitutional rights and enacted the Pensión del Bienestar para Mujeres, which expands pensions to women aged sixty to sixty-four. Early this year, Sheinbaum implemented a 12 percent minimum wage hike, except in Mexico’s more industrialized northern states, which saw a smaller adjustment given their already-higher wages. This nearly nationwide minimum wage hike surpassed Mexico’s 3.76 percent inflation rate, meaning it actually improves the purchasing power of the population.

Internationally: Pragmatic yet similar to AMLO

On the international front, Sheinbaum’s foreign policy has been characterized by pragmatism and assertiveness, but also a continuation of AMLO’s stance on sovereignty—that Mexico should adopt a policy of nonintervention in other countries’ affairs except for when their foreign policy priorities align. By many measures, she has successfully dealt with Trump. In comparison to her regional peers, such as the presidents of Brazil and Colombia, she has avoided major public clashes with her northern neighbor, keeping the relationship on track. 

By participating in newly created working groups, Mexico and the United States have deepened cooperation on security issues, especially counternarcotics. She has also made modest moves to highlight Mexico’s global role through her participation in international fora, including the Group of Seven (G7) summit in Canada, the Group of Twenty (G20) summit in Brazil, and Community of Latin American and Caribbean States meeting in Honduras.

Trade and tariffs

On the commercial front, perhaps her most notable move is her proposal to raise tariffs on almost 1,500 product classifications, including footwear, apparel, toys, and steel and aluminum, targeting non–free trade agreement countries such as China, India, and South Korea. While the proposed tariffs have been framed as a way to protect domestic industries, they have injected uncertainty into Mexico’s investment climate just months before the 2026 United States-Mexico-Canada Agreement (USMCA) review. Furthermore, recent statements by officials at the Economy Secretariat have emphasized that these proposed tariffs will depend on the results of negotiations between the United States and China, underscoring Mexico’s vulnerability to external trade policy.

What she hasn’t (yet) delivered

As many politicians have learned, past performance is no guarantee of future success. Sheinbaum still has five years left in her term, and a number of items remain on her to-do list, especially on the economic and security fronts, two of the Trump administration’s top priorities in the Western Hemisphere. 

On the economic front, Sheinbaum’s strategy has largely followed a model she describes as “Mexican humanism and social justice,” which has focused on welfare and direct cash transfer programs. These programs now represent an investment of 3 percent of the country’s gross domestic product. According to the president’s State of the Nation address in September, this has lifted 13.4 million people out of poverty since 2018—a key goal of AMLO’s “Fourth Transformation” campaign to reduce inequality. While unemployment has remained low at 2.6 percent and the government has attempted to shield consumer prices from significant increases through its program to combat food price inflation and scarcity, factors such as trade and tariff uncertainty have resulted in overall tepid economic growth. The International Monetary Fund projects that Mexico’s economy will grow 1 percent this year, far below the 2.4 percent growth for the Latin America and the Caribbean area overall.  

Industrial activity indexes in Mexico continue to exhibit a slowdown, and gross fixed capital investment has steadily declined over the past nine months, despite foreign direct investment reaching historic highs. Whether “Plan Mexico”—Sheinbaum’s core long-term economic growth strategy focused on private investment across fifteen development hubs—has the power to reverse negative trends and turn moderate outcomes into significant wins could shape the economic legacy of her administration. 

The security front, historically a challenge for Mexico and among the top priorities in the bilateral relationship with the United States, has also been marked by modest achievements amid a turbulent backdrop. Sheinbaum’s security strategy hinges on four pillars—addressing root causes of crime, strengthening the National Guard, increasing investigations and intelligence, and coordinating between state and local institutions. The National Guard, however, has become the key pillar, especially since control of the force was transferred to the Defense Secretariat, turning the formerly civilian force into the fourth military branch the day before Sheinbaum’s inauguration. The president now credits this move, coupled with community-based projects such as “Peace Fairs and Brigades,” with the 25.3 percent reduction in homicides and 20.8 percent national reduction of “high-impact crime.” 

While increased arrests, drug and arms seizures, the dismantling of clandestine labs, and cooperation with the United States on surveillance flights have resulted from the security strategy, questions remain regarding how much these achievements have actually disrupted organized criminal networks. Homicides are down, but the number of missing people has increased by over 31 percent since 2022. The Defense Secretariat’s budget will be raised by 2.9 percent per the 2026 fiscal package, but the Secretariat for Security and Citizen Protection will lose 18.6 percent of its funding. The government is cracking down on transnational criminal organizations, but 63.2 percent of urban citizens still perceive their city as unsafe. The security realm remains ridden with contradictions, as territorial gains are scant and easily lost, creating vast opportunities for the Sheinbaum administration to refine its strategy over the next five years.

What to watch in year two and beyond

Beyond continuing the initial momentum on the economy, and building on some initial trade and security improvements, the Sheinbaum administration will face several important tests in the coming year that will start to determine her legacy. The most obvious one is the USMCA review, especially given Trump’s recent assertion that US trade talks with Canada are terminated.

On security, the big questions are whether US-Mexico coordination on fentanyl, counternarcotics, and arms trafficking deepens—via new and existing working groups or other mechanisms—and whether Sheinbaum is able to maintain that cooperation on Mexican terms, meaning with a limited foreign operational footprint. How she balances these two priorities, while maintaining her approval ratings, will bear direct consequences at home and abroad.

María Fernanda Bozmoski is director, impact and operations and Central America lead at the Adrienne Arsht Latin America Center at the Atlantic Council. 

Valeria Villarreal Martinez is an assistant director at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post How long can Sheinbaum keep her first-year momentum going in Mexico? appeared first on Atlantic Council.

North America stands at a pivotal juncture as the United States, Canada, and Mexico navigate shifting policy priorities around economic and industrial sovereignty in the energy sector. At the same time, North America boasts an abundance of energy resources in both production and manufacturing capacity. With a solid trilateral trade foundation already in place, Mexico can play a unique role in bolstering regional security resilience through deeper coordination on cross-border supply chains, manufacturing, and energy trade.

Strategic integration of regional energy resources will be critical to realizing North America’s full potential as an energy powerhouse. With its expanding natural gas sector, growing LNG export capacity, and increasing integration and leadership into advanced manufacturing sectors such as semiconductors and electric vehicles, Mexico can strengthen North America’s energy resilience and competitiveness. Enhanced cross-border cooperation on energy infrastructure, supply chains, and technology transfer would drive local energy stability while lowering regional costs and stabilizing the grid.

As global energy value chains become more concentrated and China continues to dominate them, North American energy security takes on a renewed importance. The upcoming United States-Mexico-Canada Agreement (USMCA) review offers an opportunity to advance policy coordination, align industrial strategy, and build out more integrated energy markets, securing North America’s collective position as a global energy powerhouse. 

Juan José Gómez-Camacho is a member of the board of directors of Citibank Mexico and the Board of Trustees of the Migration Policy Institute. He provides strategic advice to companies investing and operating in North America, particularly in light of the current political and economic climate.

Additionally, he is a professor and senior fellow at the Johns Hopkins University School of Advanced International Studies, where he teaches and lectures on global challenges and North American affairs.

Liliana Diaz is a nonresident senior fellow with the Atlantic Council Global Energy Center. She is also an adjunct professor of energy, climate policy, and markets in the Americas at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, a lecturer at leading energy industry conferences, and a contributor to journals on the development of energy sources and markets, as well as clean technologies and innovation.

Issue Brief Sep 17, 2025

Preparing US industry for a more competitive world

By David L. Goldwyn, Andrea Clabough

US companies must stay the course on decarbonization to ensure long-term global competitiveness—or risk being left behind as the world’s other major economies continue to prioritize sustainability.

Energy & Environment Energy Markets & Governance

Global Energy Agenda Feb 20, 2025

Latin America and the Caribbean: Leading the green energy transition amid climate challenges

By Andrés Rebolledo Smitmans

By tapping into a wealth of solar, wind, and water resources, Latin America and the Caribbean are progressing toward decarbonization while addressing poverty and inequality. Collective action across these regions is essential for accelerating progress and achieving a sustainable and equitable energy system.

Energy & Environment Energy Transitions

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What China’s BYD really wants from EV investments in Mexico

By Haley Nelson

BYD, the world’s largest EV manufacturer, is moving forward with plans to build a manufacturing plant in Mexico despite the country’s ongoing trade friction with the US. This decision signals a wider strategy to embed Chinese influence in Mexico’s energy infrastructure, given BYD’s potential to dominate the market.

China Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Forging North America’s energy advantage: Mexico’s pivotal role appeared first on Atlantic Council.

The demonstrators are not only protesting the new president, who has been accused of corruption and sexual assault. The protests are the political manifestation of something deeper: the steady advance of organized crime into everyday life and the collapse of public confidence in the Peruvian state’s ability to protect its citizens. As Peru approaches its April 2026 elections, the moment holds both promise for democratic renewal and risk of democratic collapse.

As Peruvians prepare to head to the polls, the insecurity crisis will be top of mind. Over the past three years, Peru has experienced an unprecedented rise in organized criminal activity. Between 2019 and 2024, reported extortions increased sixfold, and this year every third Peruvian reported knowing a victim of extortion, many of whom are small business owners. Homicides, too, have doubled since 2019. And in January of this year alone, there were 203 percent more homicides than in January 2017. What was once seen as a problem of border towns or drug corridors has become the daily reality of small and medium-sized businesses—the country’s true economic engine.

In cities such as Trujillo and Chiclayo, bus operators and construction firms now pay weekly “quotas” to criminal groups. In Lima’s districts, even market vendors receive extortion calls demanding transfers through digital wallets. Many of these workers belong to Peru’s vast informal sector, which employs nearly seven out of ten Peruvians and forms the social base that has now turned against the political establishment and is demanding solutions. When extortion payments and successive killings became commonplace, strikes and street protests followed against a government perceived as absent or complicit.

This explosion of criminality is the predictable outcome of a decade in which Peru’s institutions have been eaten away by self-interested politicians, resulting in political instability. Beginning in 2016, a Congress dominated by the fujimorismo movement began to abuse its oversight powers, engaging in what legal scholars term “constitutional hardball”—exploiting procedural rules to turn impeachment into a tool for political leverage rather than accountability, as seen during the impeachments of Boluarte and former President Martín Vizcarra.

The country was also undergoing the aftermath of Operation Car Wash, a far-reaching set of investigations originating in Brazil, during which Peruvian prosecutors launched aggressive corruption probes against Peru’s pre-2016 political class. The probes ended with four former Peruvian presidents convicted of corruption. Former President Alan García, who was accused of bribery, committed suicide as police entered his house to apprehend him. Former ministers, presidential contenders, business leaders, and mayors across Peru were swept up in corruption probes, effectively purging the political elite that had once promised to renew the country after the fall of Alberto Fujimori’s regime in 2000.

Unfortunately for the country, what emerged after the Operation Car Wash probes was not a cleaner class of leaders but a more fragmented, parochial, and self-interested one—far easier for organized crime to penetrate. Peru’s Congress, now one of the least trusted institutions in the hemisphere, has often acted as a shield for illicit interests. In recent years, lawmakers have quietly advanced legislation that has reduced penalties for certain crimes, weakened controls on political financing, and obstructed efforts to vet local authorities for corruption. Behind these moves lies a new generation of politicians, many of whom are under criminal investigation for corruption and other offenses. With institutions hollowed out, prosecutors underfunded, and police leadership constantly reshuffled, criminal economies have flourished.

Peru is now less than six months away from national elections, and the outlook is uncertain. After a decade of political chaos, citizens are exhausted and cynical, and the party system is in ruins. The danger is clear: When democracy cannot guarantee security or stability, it loses its moral and practical legitimacy.

The moment could go either way. On one hand, the democratic reflex remains: Peruvians still take to the streets, still reject corruption, and still demand that a competent state guarantee basic services. If leveraged the right way, these demands could be channeled by a democratic and reformist leader willing to rebuild Peru’s institutional arrangements and salvage its democracy.

On the other hand, the ground for populism has never been more fertile. Candidates who promise “order at any cost” will likely find a receptive audience among voters who feel abandoned by their government and terrorized by crime. Promising results in the fight against crime, an opportunistic leader may yet destroy what’s left of Peruvian democracy.

Peru’s crisis is no longer just about corruption or governance. It is about the basic survival of the rule of law. The October protests should not be seen as another episode in the country’s cyclical instability but as a warning that the old model—political chaos insulated from economic collapse—has possibly reached its breaking point. Unless the next government restores both security and institutional credibility, Peru’s democracy risks becoming not merely ungovernable, but unrecognizable.

Martin Cassinelli, who was born in Peru, is an assistant director at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post Peru at a breaking point: How ten years of political chaos opened the door to organized crime appeared first on Atlantic Council.

The vote is in, and with it a mandate. The party of Argentine President Javier Milei grew its share of seats in Congress in Sunday’s midterm elections, defying expectations and giving a boost to Milei’s aggressive economic reforms. The result comes on the heels of a major US intervention to prop up the shaky Argentine peso, which US President Donald Trump had tied to his backing of Milei’s chainsaw-wielding, inflation-fighting agenda. What’s next from Milei and the markets? Invest some time in our expert takes below.

• Alejo Czerwonko: Member of the Adrienne Arsht Latin America Center’s Advisory Council and the managing director and chief investment officer emerging markets Americas for UBS Global Wealth Management 
• Jason Marczak (@jmarczak): Vice president and senior director of the Adrienne Arsht Latin America Center 
• Valentina Sader (@valentinasader): Deputy director at the Adrienne Arsht Latin America Center  
• Martin Mühleisen (@muhleisen): Nonresident senior fellow at the GeoEconomics Center and former International Monetary Fund official

Behind the results

• Milei’s party, La Libertad Avanza (LLA), captured more than 40 percent of the vote, more than doubling its share of seats in Congress. “The scale of Milei’s victory sits at the most optimistic end of pre-election expectations,” Alejo tells us. “His party now holds the political capital needed to accelerate structural reforms.” 
• Jason notes that the “most surprising” result was LLA’s narrow win over the rival Peronist party in Buenos Aires Province, “where, less than two months ago, a 14-percentage-point loss in provincial elections rattled markets” and seemed to portend a poor midterm result for Milei. 
• One factor that “likely figured into the size of LLA’s victory,” Jason says, was the backing of the Trump administration, via a twenty-billion-dollar currency swap line and another twenty-billion-dollar loan instrument that could be used to purchase Argentine debt. Sunday’s results, Jason adds, “will give reassurances to the US administration of its backing of Milei’s economic reforms.” 
• But Jason points out “one notable and concerning sign” coming out of the elections. Voter turnout was only 67.9 percent, “the lowest since the county’s return to democracy,” Jason notes.   
• Still, Valentina says Argentines gave Milei a vote of confidence: “This electoral outcome is a clear answer to those questioning the political viability of Milei’s plan and the willingness of the Argentine people to endure the pain of some of these reforms.” 

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Market moves

• Argentina’s bond markets had been wobbly in recent weeks as Milei’s political fortunes seemed to suffer. But now, Martin tells us, “Markets are likely to swing strongly in Argentina’s favor over the coming days, boosting the exchange rate and allowing the government to resume the accumulation of foreign exchange reserves, and interest rates should also decline markedly.”
• Alejo notes that “Argentina’s ‘country risk’—the spread its US dollar sovereign bonds pay over US Treasuries—was at distressed levels” before the election, with investors expecting a poor LLA performance. But “Argentine risk assets should now benefit from greater political stability, a renewed push for pro-market reforms, and robust support from the US.”

Milei’s checklist

• So what will the next phase of Milei’s reforms look like? Alejo predicts “an ambitious deregulation agenda,” along with “labor, tax, and potentially social security reforms” and changes to Argentina’s foreign exchange policies. 
• While Argentina could allow for some meaningful depreciation in the days ahead, Martin expects the government to “still be hesitant to float the peso—meaning allow it to move with the market—for good, which would be necessary for the exchange rate to find a more stable long-term equilibrium.”   
• Martin notes that while LLA does not have an outright majority in Congress, it will have an easier time building legislative majorities for certain policy moves and blocking any big spending plans. He advises Milei to “use this political and economic window of opportunity” to advance the “structural transformation of the economy” and ensure that promises lead to results for growth and jobs.  
• “After all,” Martin says, “Argentina still has a long way to go to remove the vestiges of Peronism from its economy, starting with labor market rigidities and a large pension cost overhang.”  
• The midterm result suggests Milei has a strong chance of re-election in two years, which won’t be lost on lawmakers. “Success breeds success,” Martin says. “It is this dynamic that should work in Milei’s favor while he continues on his difficult and often painful reform path.” 

The post Milei just got a midterm boost. What’s next for Argentina? appeared first on Atlantic Council.

At stake on Sunday is the government’s objective of securing at least one-third of the seats in both chambers of Congress, which would give the administration the ability to block veto-proof legislation on areas such as spending that could derail its economic plan. Given this complex environment, it’s worth a closer look at the state of Argentina’s economy in the run-up to the vote. 

Assessing Argentina’s recovery 

As I explained in an article I co-wrote in August, Argentina is emerging from a decade-long period of slow growth, during which the country experienced rampant inflation, capital flight, and a chronic inability to build its foreign exchange reserves. In December 2023, Milei came into office promising to steer the country away from that course. He began by slashing public spending, ending inflationary money creation, liberalizing the economy, and, most importantly for the current context, intervening in the country’s exchange rate.  

The results were positive: The economy started to recover after an initial decline, investment began to move back in, and inflation fell from an annualized peak of almost 300 percent year-over-year in March 2024 to the current projection of 30 percent for 2025. Nevertheless, Argentina is confronting the side effects of its version of an “exchange rate-based stabilization program” with the resulting drag on growth. 

These programs, in which a country props up its exchange rate as an anchor to curb inflation through foreign-exchange stability, tend to distort the economy by, for example, making exports more expensive and imports more affordable, harming the competitiveness of key sectors. Interest rates also tend to rise in these programs as governments offer higher returns on domestic-currency financial instruments to prevent selloffs. Argentina, with its valuation bands for the dollar set in April as part of its program with the International Monetary Fund (IMF), has been pursuing a light version of this approach, with direct and indirect mechanisms in place to keep the dollar within a slowly expanding range. Another collateral effect is that borrowing costs for businesses rise dampening growth. This has also been the case in recent months for Argentina, where rising borrowing costs, a deteriorating current account, and sectoral declines in areas such as industry and construction have flattened growth. 

The economy is still expected to see strong growth this year. Just last week, the IMF estimated a real growth rate of 4.5 percent. But overall, the economy has stagnated, and public sentiment has worsened. Voters may be less concerned with inflation than they were, but they have become increasingly worried about growth. The government, however, has remained committed to its exchange policy, selling hundreds of millions of dollars in recent weeks to keep the value of the peso within the valuation bands. Such a selloff triggered alarms in September, as bondholders fretted over the loss of scarce reserves that the country needs to meet its mounting foreign debt obligations.  

Here is where the exchange rate-based stabilization strategy kicked in, as the government had refused to buy dollars to accumulate reserves in recent months to prevent any pressure on the exchange rate. As a result, the central bank lacked the resources to meet a run on the peso and to reassure markets that dollar-denominated debt remained sustainable, fueling the crisis further.  

The election, the swap, and the sustainability of public debt 

Argentina has long experienced exchange rate volatility during elections as people seek to shelter their savings from uncertainty. The challenge is that, because the government decided to maintain relative control on the exchange rate into its second year, the country failed to accrue reserves and is now having to absorb the cost of exchange rate volatility with a limited toolkit. Although the US Treasury has now intervened directly by buying pesos to prop up the currency, this has so far failed to calm the market fully. Ultimately, it is likely that only the results of Sunday’s election will put an end to price uncertainty. 

But another question has come up: Will Argentina be able to meet its upcoming debt obligations? That is where the discussion on the swap agreed with the US Treasury is headed, as the credit line, whose terms are secret, is increasingly discussed by both Argentina and the United States as a liquidity instrument for Argentina’s bond market. The country faces mounting debt repayment obligations in the coming years and, given that its net international reserves are still very limited, the US swap line has served as a mechanism to calm the markets.

Whether Argentina ends up activating the swap to repay creditors will depend on the government’s ability to rethink its exchange-rate policy and begin accruing reserves. If Argentina activates the swap and uses it to repay debt, then it will essentially exchange debt with creditors for new debt with the US Treasury. This new debt in turn would have its own consequent repayment risks if no reserve accumulation strategy is put in place, just as with the current concerns over the sustainability of debt to private creditors. It will also depend on the future direction of the market after the midterms, which may lead to different outcomes depending on a government victory or loss. If the government fails to secure a one-third minority and the opposition, led by the alliance of Fuerza Patria, wins the national vote, there will likely be more instability.

The day after the elections 

On Monday, October 27, the markets will get their vote as they price in the results. At this point in Argentina, campaigning is over and all that the government can do is wait. In the meantime, while the US Treasury may intervene further in the peso market, the future of the US swap line will be decided in the weeks and months after that by the market’s willingness to provide Argentina with new credit to meet its external financing obligations.  

Following the elections, the government will have an opportunity to move into a new phase of its economic plan, freeing the exchange rate and accruing reserves while working with allies in Argentina’s Congress to continue pushing reforms. It should move in this direction to fully free Argentina’s economy and to restart the engine of growth.

Ignacio Albe is a program assistant focusing on Argentina at the Adrienne Arsht Latin America Center.

The post Milei’s economic plan meets its midterm test appeared first on Atlantic Council.

The reasons for the recent downturn 

The downward trend began three years ago—before the Trump administration took office. In September 2022, at his first United Nations General Assembly speech, Petro condemned the anti-drug efforts that have been a cornerstone of bilateral ties. This began a period of tensions between the two historically stalwart allies in which relations deteriorated further. During an April 2023 Capitol Hill visit, for example, Petro got into tense exchanges with US members of Congress Mario Diaz-Balart (R-FL) and Maria Elvira Salazar (R-FL). 

And now, in the past month, tensions have come to a head. On September 15, the United States decertified Colombia as cooperating to fight drug trafficking – although it did grant a national interest waiver to maintain aid and security cooperation. Several days later, Petro took to the streets of New York City during the United Nations General Assembly to call for the US military to disobey the US president. And thus, for the first time in thirty years, the US State Department revoked the visa of the Colombian president. Add to that the latest Trump-Petro exchanges, which sprung from the US strikes on boats in the Caribbean. The background here: Petro accused the US government of “murder,” saying a wayward Colombian fisherman was killed in an airstrike, and Trump responded by calling Petro an “illegal drug dealer” as he revoked US aid to the country. Both parties are at a new low that would have been unimaginable at any point since bilateral ties were strengthened in 2000 with the launch of Plan Colombia. 

The longer-term story of cooperation 

In fact, the US-Colombia partnership has historically been more than just a bilateral relationship. In 2022, to celebrate two hundred years of US-Colombia diplomatic ties, the Atlantic Council’s Adrienne Arsht Latin America Center commissioned a series of essays and released a book titled Allies. In it, Kiron Skinner, who served at the US Department of State as the director for policy planning in the first Trump administration, wrote that Colombia had become “an indispensable security partner to the US, training police and prosecutors in Latin America and other regions.” That essay went on to acknowledge that “US intelligence and security cooperation with Colombia bore positive results for both countries over the past two decades.”

That cooperation—built over decades—is what should define the relationship. Intelligence sharing has led to the disruption of illicit trafficking routes, the dismantling of armed groups, and the strengthening of operational ties that have borne fruit in Colombia and in broader US efforts to impede narcotics smuggling.

China is another concern. In Allies, then Senator Roy Blunt (R-MO) wrote: “Colombia will be an excellent partner in countering the influence of our competitors. Chief among these competitors is China.” Two years later, Colombia, in another about-face from longstanding policy, joined the Belt and Road Initiative. And in August, Colombia signed an agreement with China to even further advance bilateral cooperation.

The trade and investment ties at stake

Petro’s pullback from the United States may be politically beneficial with some limited sectors in Colombia, but Colombians still see the United States as their principal ally, even though their preference for the United States has dropped. And that US preference is also seen among Colombia’s businesses—and the US businesses that export to Colombia. Strong people-to-people ties define the relationship as well as strong commercial ties.

Perhaps most notable in the commercial sphere is that the United States has a trade surplus with Colombia, and trade has continued to deepen. Since the US-Colombia Trade Promotion Agreement entered into force in 2012, Colombia’s exports of crude oil, coffee, flowers, avocados, bananas, apparel, and light manufacturing have increased to maximize favored tariff preferences. Likewise, US agricultural exports to Colombia have surged, hitting nearly five billion dollars in 2024—up over 20 percent from the previous year and the highest increase among the top twenty-five export markets for US agriculture. Two-way trade supports people and businesses in both countries.

Colombia has, for instance, become the fifth largest destination for US yellow corn in the world and the largest in South America, accounting for more than one billion dollars per year. This is all thanks to the benefits of the current bilateral free trade agreement. In terms of investment, the United States is the top source of foreign direct investment into Colombia, with an average of $2.5 billion going into the country each year since the free trade agreement started back in 2012. A deteriorating relationship between Washington and Bogotá could put this trade at risk.

Amid this accelerating decline in bilateral ties, both sides should remind themselves of the historical importance of this relationship in security, commercial, and broader geopolitical terms. That is ultimately what led to decades of bipartisan support for the relationship in the United States. As Colombia gears up for presidential elections in 2026, resurrecting a stronger bilateral relationship will be a top foreign policy issue across campaigns. Rightfully so. This is a relationship that cannot be lost. There’s way too much at stake.  

Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post With Petro and Trump at odds, what’s next for the US-Colombia relationship?  appeared first on Atlantic Council.

Primarily driven by a major economic crisis and distrust with the incumbent Movimiento al Socialismo (MAS) party, Bolivians have joined a regional shift away from leftist leadership. Yet, unlike the populist pendulum swings seen in neighboring Argentina and El Salvador, Bolivians appear to have chosen a more centrist and reformist path, rather than a far-right approach.

As Paz begins his five-year presidential term on November 8, expect to see shifts in the country’s approach to the economy, foreign policy, and security.

Who is Paz and why did he win?

Paz was born in exile in Spain. Son of former president Jaime Paz Zamora, he studied in Washington and was elected senator from Tarija, and later mayor of the city. Edman Lara, Paz’s running mate, also drew in support. A former police officer, he first made headlines in 2024 for calling out corruption within Bolivia’s law enforcement, leading to his removal.

Paz’s win comes after the incumbent MAS party lost the first-round elections on August 17. For the past two decades, MAS was one of South America’s most prominent parties under former President Evo Morales and then under incumbent President Luis Arce. But over time, Bolivians’ support for the party has waned as the country has dealt with economic crises and prominent MAS members have been implicated in scandals.

The rivalry between Arce and Morales fractured the MAS party, further damaging its electoral chances. Arce, suffering from some of the region’s lowest approval ratings, declined to run for reelection, claiming he didn’t want to further divide the vote and help a “right-wing candidate win.” His withdrawal ultimately contributed to the party’s collapse and Morales, who is term-limited from running for president again, motivated his followers to cast null votes to protest his absence from the ballot. In the first round, about 20 percent of votes were null. This signified somewhat diminished support for Morales, though the null ballots made up a much larger vote share than the MAS’s official candidate, Eduardo del Castillo.

The MAS party has also been hurt by scandals involving its members. For instance, in September, Felipe Cáceres, Bolivia’s former vice-minister of social defense and controlled substances under Morales, was detained after anti-narcotics authorities found a cocaine laboratory on his property. Cáceres’ arrest raised questions about potential links between Morales’s partners and connections to drug trafficking.

What might Paz mean for Bolivia’s economy?

Bolivia faces a major economic crisis and gas shortages that will require steady attention from the new administration. Annual inflation has reached 24 percent, and international reserves have plunged from around fifteen billion dollars in 2014 to under two billion dollars in 2024.

Paz’s campaign slogan was “capitalism for everyone,” promising to open markets while maintaining welfare programs. During the campaign, he spoke about his plans to secure US fuel supplies to stabilize the economy and appoint an envoy to strengthen US-Bolivia trade. He has met with US officials and oil and gas companies, arguing that these sources of supply would ease shortages that accelerated inflation and reduced production.

One issue to watch is lithium. Nearly 21 million metric tons of lithium reserves lie in the nation, giving Bolivia the opportunity to become a critical supplier in the global energy transition. The metal is also important for defense, technology, and telecommunications applications in global supply chains. Arce’s government signed several lithium deals with Chinese and Russian firms in the past two years, but progress has been slow and the terms of the contracts are opaque. Paz has said his administration would review these contracts, as well as enact a new law on lithium mining to improve environmental oversight and strengthen support for local workers. If done properly, it could open investment opportunities for Western and regional partners. These reforms may eventually help transform Bolivia from a state-run extractive economy to an important member of the clean energy supply chain.

How might Bolivia’s foreign policy change?

It is likely that a new diplomatic language will emerge from La Paz. In contrast to the outgoing MAS government’s support for the Maduro regime in Venezuela, Paz has said he would suspend, though not totally sever, ties with Caracas. For decades, Bolivia was one of Venezuela’s major political allies and this change could begin to reshape the political dynamics of the Latin American left. In addition, the United States may now have an opportunity to rebuild a partnership in the Andes to advance mutual commercial interests and fight against narcotrafficking.

As Bolivia is likely to strengthen ties with the United States and other South American countries such as Ecuador, Brazil, and Argentina, expect the country’s relations with Cuba and Iran to diminish. Nevertheless, the foreign ministry remains likely to prioritize pragmatism when it comes to trade and regional cooperation.

How might Bolivia’s approach to security change?

As Bolivia is a key transit route and supplier in the cocaine trade, the new administration may prioritize combating illicit markets by revitalizing intelligence sharing and cooperation with regional partners.

It’s expected that Paz will work to reduce crime by promoting rehabilitation and reintegration programs. He has also signaled that we would work to restore counternarcotics partnerships with the United States, an approach that Washington seems to welcome. On October 19, US Secretary of State Marco Rubio stated that the “United States stands ready to partner with Bolivia” on issues such as “combatting transnational criminal organizations to strengthen regional security.”

Although public trust in institutions is low, security is a top issue for Bolivians, and the new administration has an opportunity to make strides in this area. For years, the judiciary and law enforcement networks have undermined rule of law through politicization, but Paz’s administration could take steps to modernize the country’s justice system. Whether these initiatives succeed in combating corruption and promoting transparency will help determine whether Bolivia’s new chapter is structural shift or merely rhetorical one.

If Paz’s government can deliver greater economic resilience, institutional trust, and innovative foreign partnerships, Bolivia could emerge as an example of centrist stability in a region often viewed as turbulent. However, the new administration should take a slow and steady approach, as avoiding sudden shocks will be essential for Paz to maintain his mandate for reform.

Miguel Escoto is a young global professional with the Atlantic Council’s Adrienne Arsht Latin America Center.

The post What Bolivia’s move to the center means for its economy, foreign policy, and security appeared first on Atlantic Council.

1. Why did Peru’s Congress impeach Boluarte?

The cited cause for the impeachment of Boluarte was public outcry about her inability to combat the surge in organized crime affecting Peru’s citizens. Between 2019 and 2024, reported extortions in Peru increased sixfold, and this year every third Peruvian reported knowing a victim of extortion, many of whom are small business owners. Over the same period, homicides have doubled. In January of this year, there were 203 percent more homicides than in January of 2017.  

What brought this issue to a head was an incident on Wednesday in Lima, where men on motorcycles opened fire with a machine gun on a popular cumbia band, injuring the band members. This horrific event was the impetus for impeaching the president. The Peruvian Constitution allows Congress to impeach and remove a president on the grounds of “moral incapacity” with a two-thirds qualified majority, which was reached early on Friday, with 122 votes out of 130.

2. Why now?

While the government’s inability to combat crime is the cited cause, the timing of the impeachment—six months before Peru’s presidential election—suggests a potential political rationale. Boluarte, who rose to power after former President Pedro Castillo was impeached in December 2022, did not have her own political party in Congress. She was only able to govern through an informal coalition with right-wing and centrist parties.  

Even though Boluarte’s tenure was mired by scandals that precipitated her to become one of the world’s least popular presidents (at an approval rate of 3 percent), her coalition decided to keep her in power, even if it came at the cost of Congress’s own popularity (which in September was at 2 percent approval).  

But as the election drew closer and the political parties keeping her in power prepared to launch their presidential campaigns, the continued support of Boluarte became a political liability for them. Once the parties, led by top presidential contenders Keiko Fujimori and Rafael López Aliaga, announced on Thursday that they would support her impeachment, the road for her removal was paved.

3. Who is Peru’s new president? 

Boluarte was replaced, as the Constitution dictates, by Jerí, a little-known thirty-eight-year-old lawmaker who served as the head of the Congress. Jerí entered Congress in 2021 as former President Martín Vizcarra’s replacement, representing the same political party and electoral district, after the former president was disqualified from holding public office. Jerí became the Congress’s president in July 2025 with support of the same coalition of parties that had supported Boluarte in power. His first hours in office have been marked by the resurfacing of accusations against him, as Jerí has been involved in several investigations for alleged sexual assault and corruption, though none have resulted in convictions. Jerí has denied any wrongdoing.  

Jerí will serve out Boluarte’s term as interim president. Elections are scheduled for next April, and Boluarte’s term was to end on July 28, 2026.

4. What are the implications for Peru’s 2026 election and its economy? 

Boluarte’s impeachment should not be seen as the resolution of political conflict, but as the accentuation of a deepening institutional crisis. Since 2016, Peru’s presidents have governed with minority support in Congress and have been subject to the will of congressional majorities. As a result, Peru has seen eight presidents be inaugurated in the past decade, evidencing just how difficult it is to govern under Peru’s political system and dynamics. 

Electorally, Boluarte’s impeachment and the inauguration of Jerí will likely do little to convince voters that the coalitions represented in Congress can overcome political gridlock and combat the surge of violence affecting Peru. As Peru enters its election cycle, the outrage over surging violence will now be accompanied by a frustration over the incapacity of Peru’s political system to deliver results. Ultimately, the combination of outrage and frustration among voters will provide a fertile ground for populist rhetoric that undermines the principles of Peru’s democratic political system. 

However, Peru has managed to achieve a measure of economic stability, even amid the political instability of the last decade. The decoupling between politics and the economy rests on solid foundations: an independent central bank, strong international reserves, low public debt, and a mining sector driven by global commodity prices. While politics has faltered, the economy has remained standing thanks to institutional safeguards and external factors, such as foreign demand and the historically high prices of the metals Peru exports, including copper and gold.  

Yet this resilience has clear limits. As long as institutions remain fragile, uncertainty will persist. Each presidential removal chips away at investor and public confidence. And although Peru’s economic buffer has averted a sudden collapse in the past decade, its political instability has led to postponed investments and the inability of the state to sustain long-term policy agendas.

Martin Cassinelli, a native of Peru, is assistant director of the Atlantic Council’s Adrienne Arsht Latin America Center. 

The post Four questions (and expert answers) about Peru’s presidential impeachment and what’s next appeared first on Atlantic Council.

At these annual meetings, the IMF and the World Bank will face five important issues, which span both near-term economic prospects and more fundamental, longer-term challenges confronting the global economy.

1. Navigating growth—and inflation

Recent data show a rather resilient global economy, particularly in the United States. Despite concerns about rising tariffs and ongoing uncertainty, economic activity has held up since the second quarter of the year—so much so that 2025 gross domestic product (GDP) growth estimates have been recently revised upward, to 3.2 percent globally (according to the Organisation for Economic Co-operation and Development) and 2.5 percent for the United States (according to Goldman Sachs). Stock markets have also performed well, with the MSCI World Index posting a 14.3 percent return year-to-date, roughly matching the S&P 500’s 14.4 percent, though a price-to-earnings ratio of thirty (compared to a long-term average of nineteen) suggests the market valuation could be stretched. Global inflation has slowed noticeably, from 5.67 percent in 2024 to an estimated 4.29 percent this year. In the United States, the consumer price index growth rate fell from 3 percent in January to 2.3 percent in April, before rebounding to 2.9 percent in August.

But this resilience may not last. Evidence suggests that the good performance of the global economy and stock markets has been narrowly based, driven by a handful of high-tech corporations (the so-called Magnificent Seven) pouring money into artificial intelligence (AI) hardware, software, and data centers. In fact, according to JP Morgan Asset Management, AI-related capital expenditures have accounted for 1.1 percent of the 1.6 percent GDP growth in the first half of 2025. Such intensive investment could prove unsustainable, and a slowdown could ripple through the broader economy and stock markets. Meanwhile, US importers are likely beginning to pass more of the costs of tariffs onto retail customers, driving up consumer prices. If new tariffs keep coming, that would sustain the inflation process going forward.

It is up to the IMF to present a convincing analysis of the economy’s vulnerability to concentration risk (dependence on AI related activities) and the likely delayed effects of rising tariffs, which boost the likelihood of mild stagflation in the near future, especially in the United States; it is also up to the Fund to advise countries to adopt policies to mitigate this risk. This could be a challenge, especially when major economies can point to decent economic performance so far this year and may feel complacent.

2. Managing the “dual shock”

Many countries are currently grappling with a “dual shock”: rising US tariffs on one hand and China exporting its industrial overcapacity on the other. In response to declining shipments to the United States, China has redirected exports to third countries, which is set to boost its overall trade surplus to a record $1.2 trillion this year. Put simply, after helping to hollow out the US manufacturing base, Beijing is now starting to do the same to other economies—including Europe and emerging markets that rely on a manufacturing-for-export growth model. These countries are increasingly squeezed by US protectionism and Chinese mercantilism.

How will the IMF guide its members? Will it encourage a “back to basics” approach, based on mutually beneficial policies that reduce external and fiscal deficits, promote free and largely balanced trade, and create growth opportunities for developing countries? Or will it focus on designing second-best solutions—in response to the problems that its two largest member states are creating?

3. Doubling down or easing off on Argentina?

In a scene of déjà vu, the IMF is once again dealing with Argentina’s socioeconomic crisis—shortly after the institution approved its twenty-third assistance package to the struggling nation in April. The twenty-billion-dollar loan comes on top of the $43 billion that Argentina still owes, making the country the largest lending risk exposure of the IMF. President Javier Milei has managed to turn a 5 percent fiscal deficit in 2023 into a 0.3 percent surplus in 2024, and he has reduced annual inflation from nearly 300 percent in early 2024 to under 40 percent today. Argentina’s GDP growth is projected to reach 5.5 percent this year. Yet, Milei’s coalition just suffered a major defeat in an election in Buenos Aires ahead of the midterm polls in late October, shaking investor confidence and triggering a sudden run on the peso, which remains overvalued when adjusted for inflation.

It is not clear how the IMF will deal with the unfolding currency crisis. Will it change its conditionality on the Argentina program to make it more socially and politically sustainable? Or will it double down on the current program, especially given the United States’ promise of a twenty-billion-dollar currency swap line to support Argentina?

4. Dealing with the US administration’s agenda

In line with the Trump administration’s call to the IMF and World Bank to focus on their core missions, the institutions have toned down references to their activities regarding climate change, gender equality, inclusive growth, and sustainable development. It’s unclear, however, whether that will satisfy the United States—or whether Washington will push for even greater compliance with its agenda. 

A key question is how the World Bank will respond to US pressure to “graduate” middle-income countries from World Bank borrowing and end lending to China altogether. It also remains to be seen how Daniel Katz, recently approved by the IMF Executive Board to be first deputy managing director, will navigate his new role. Katz, who served as chief of staff to US Treasury Secretary Scott Bessent, has argued that the United States should work to limit China’s role at the IMF and the World Bank—a stance that closely mirrors the administration’s position.

5. Improving the sovereign debt restructuring process

Finally, the IMF and the World Bank have an opportunity to improve the sovereign debt restructuring process. Building on progress in the Global Sovereign Debt Roundtable, the IMF and World Bank should encourage parallel negotiations between debtor countries and their creditors—both official and private lenders—rather than sequential talks. Acting as an honest broker and providing necessary information to both negotiating groups, the IMF could help reduce delays and facilitate timely and fair restructuring agreements.

Participants and observers will closely follow this year’s annual meetings, including these five important issues. Doing so will help them better understand how the United States will continue to interact with other countries in the multilateral setting of the Bretton Woods institutions.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a senior fellow at the Policy Center for the New South, a former executive managing director at the Institute of International Finance, and a former deputy director at the International Monetary Fund.

The post From US tariffs to Argentina’s crisis: The five important issues at next week’s IMF-World Bank Annual Meetings appeared first on Atlantic Council.

_{Sources: Ministry of Energy, Brazil; Ministry of Renewable Energy, India (2); National Energy Administration, China (2); General Authority for Statistics, Saudi Arabia; Federal Energy Regulatory Commission, United States}

_{Sources: Ministry of Energy, Brazil; Ministry of Renewable Energy India (2); National Energy Administration, China (2); General Authority for Statistics, Saudi Arabia; Federal Energy Regulatory Commission, United States}

New capacity by country and energy source

Brazil added only non-fossil power in 2024, with solar and wind comprising 97 percent of new additions. Despite Brazil’s abundant hydropower resources, the cheapest capacity additions are typically solar photovoltaics and wind turbines; these technologies also require no water and enable Brazil to hedge against droughts that have become increasingly frequent.  

In 2024, India built 27.9 gigawatts (GW) of solar and wind, in addition to coal and nuclear energy. Despite new coal additions, almost 90 percent of India’s 2024 additions were from non-fossil sources, a clear direction of travel as the country bids to become a global solar hub.

China is taking an all-of-the-above approach to energy, installing more solar, wind, hydropower, nuclear, natural gas, and coal generation capacity than any other economy. Still, solar and wind accounted for 84 percent of capacity expansion.

The United States also predominantly built solar, wind, and natural gas capacity in 2024, as it continues to move beyond coal plant construction. Solar and wind will remain important elements in determining the United States’ durable competitiveness, as our colleagues David Goldwyn and Andrea Clabough write. 

But Saudi Arabia’s turn to solar and wind may be the most surprising of all. In 2024 itself, Saudi Arabia imported 17 GW of solar panels from China and its 3.6 GW of solar capacity installations accounted for all new electricity capacity installed that year. Under the renewable strategy submitted by the Ministry of Energy to the UNFCCC, Saudi targets about 130 GW of renewable capacity by 2030. Saudi Arabia’s turn to low-carbon energy sources could also hold significant implications for global oil markets, as the Kingdom still uses oil for about a third of electricity generation—and up to 1.4 million barrels per day in the summer. As solar, wind, and batteries (and natural gas) displace domestic power burn, it will free up more barrels for exports. 

Economic and energy security imperatives—not climate—are spurring renewables boom

These five economies include the world’s largest polluter (China) and the world’s largest crude oil exporter (Saudi Arabia). All are turning to solar and wind not out of climate idealism, but because it benefits their economic and energy security interests in the near-term. Indeed, most of the identified countries do not have net-zero targets or are currently not on pace to achieve their targeted net-zero emissions by 2060 or 2070—a decade or two after Western European countries plan to achieve their climate targets.

_{Sources: Climate Action Tracker, Brazil First NDC, India LT-LEDS, China UNFCCC, US UNFCCC, Saudi Green Initiative}

Global momentum favoring solar and wind will only continue to grow

Despite these countries’ lack of climate ambition, or even their outright reliance on fossil fuel exports, they are overwhelmingly turning to solar and wind for new capacity installations. 

Solar and wind resources are deployed globally by disparate actors because of their clear economic and national security benefits. These technologies are inexpensive and modular, require no fuel, can be constructed rapidly, and reduce energy import dependencies. Once installed, and assuming proper cybersecurity precautions, they can operate without interference. 

While solar and wind dominate new capacity, they alone cannot guarantee secure and affordable power. Other forms of energy, including nuclear, hydro, natural gas, and geothermal power, remain critical for balancing the grid. Still, solar and wind are dominating incremental electricity installations because they are simply cheaper and more useful for the artificial intelligence race than alternatives.  

Other forms of energy have their purposes, but any country that flatly rejects solar and wind will find itself poorer and weaker.

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report.

Hansika Nath is a young global professional at the Global Energy Center. 

This analysis reflects their own personal opinions. 

Staff

Joseph Webster

Senior Fellow, Global Energy Center

Global Energy Center Indo-Pacific Security Initiative

Central Asia China

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For Argentina, the US commitment provides crucial breathing room at a moment of maximum political vulnerability. Earlier this month, Argentinian President Javier Milei’s party suffered a major defeat in a provincial election ahead of the midterm polls in late October that will be critical for the government’s reform drive. The government’s chances of winning additional seats in congress looked slim as the peso slid against the dollar, despite heavy intervention by Argentina’s central bank. But this slide reversed sharply after the US announcement, providing the government a political lifeline that could prove critical in the upcoming election.

The details of the support package remain to be determined. For example, it’s not yet clear whether it would come in the form of a loan, a swap line (that is, a temporary exchange of US dollars for Argentinean pesos) or outright bond purchases by the US Treasury. All these options would offer Argentina several tangible benefits. First, they would provide dollar liquidity to defend the peso without further depleting the central bank’s reserves, which are a key performance indicator for the current International Monetary Fund (IMF) program. Second, they would signal to markets that Argentina has a powerful ally willing to counter speculative attacks, reducing borrowing costs and helping maintain market access. Third, the US backing could give Milei political room to implement painful but necessary reforms without risking a run on the peso.

In fact, there is a reasonable case for the United States to come to Argentina’s aid, independent of their leaders’ mutual political interests. Argentina has made important but painful strides in reforming its economy and addressing its budget deficit, but reforms are incomplete and the country lacks investment to return to a sustainable growth path. After two failed IMF programs under previous governments, the current attempt offers the best chance yet to get Argentina out of its doldrums. To the extent that it can help this process along, the United States should not leave the field to China, which would be able to exploit the vacuum left by an imploding Milei government and a return to Peronism two years from now.

But this support should come with important caveats. With US support at its back, Argentina needs to continue delivering on the policy side. To help this along, a close collaboration between the US Treasury and the IMF will be essential, not only in terms of their asks for the government (the United States has yet to announce whether it will impose any conditions) but also in ensuring their implementation. As an international institution, the IMF has the legitimacy and technical expertise to design an appropriate program, but it often lacks the political heft to insist on the country meeting its targets, a role that the US Treasury can share in this case.

Given Argentina’s long and painful economic history, there is much at stake for all involved. Argentina’s citizens have borne the brunt of their leaders’ past mismanagement, and a speedy return to higher growth at low inflation would help alleviate the hardship of recent years. And the United States will bring twenty billion dollars from the Exchange Stabilization Fund to the table while also staking its financial leadership on a successful outcome—both vis-à-vis the markets, which at some point will test US resolve to help Argentina, and China, which provided an earlier swap line but remained passive with respect to economic policies.

For the IMF, the participation of the United States arguably carries the largest risk. Although the fund is still Argentina’s largest creditor, with a peak exposure of $58 billion in 2026, it may find itself pushed to the sidelines on important program decisions. In part, this is because the United States, as the IMF’s biggest shareholder, has always exerted considerable influence on its management. More importantly, however, the IMF will have disbursed most of its loan by the end of 2025, leaving the United States in a strong position to set the terms for the remaining program years. Much will rest on the role played by Dan Katz, the US nominee to be the next IMF first deputy managing director.

As mentioned above, it would be best if the United States and the IMF were to closely coordinate their actions. But a greater challenge would come from a disorderly end to Argentina’s reform effort, which carries an uncomfortably high probability given domestic polarization, a tendency to stick to an overvalued exchange rate, and jittery financial markets that need little prodding to sell Argentinian assets.

In the worst case, Argentina would have received sizable funds from the ESF while the IMF would retain a large exposure. How would the Trump administration approach a situation in which another large debt restructuring might be necessary? Would the United States then question the IMF’s preferred creditor status—which rests on an informal agreement between members of the Paris Club of major lenders—and insist on being paid back first? If so, then this would not only put the IMF in a difficult spot, but it could also be a blow to the broader sovereign debt architecture, as it may imply a higher burden for other official and private creditors.

To sum up, the proposed US support for Argentina marks an important departure from past lending practices. Whatever the White House’s motivation, the loan will be a test for the relationship between the IMF and its biggest shareholder. In the best case, it might help Argentina to finally move to a higher growth path. But on the opposite end of the spectrum, it could undermine the global financial architecture, which is built around the IMF as a lender of last resort acting in the global interest.

Martin Mühleisen is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center and a former IMF official with decades of experience in economic crisis management and financial diplomacy.

The post Is the US currency rescue for Argentina positive statecraft or reckless favoritism? appeared first on Atlantic Council.

In fact, emerging evidence suggests that Mexican cartel operatives may have traveled to Ukraine’s International Legion under false pretenses, seeking to gain direct combat experience with FPV tactics. If confirmed, this would suggest that cartel foot soldiers are training alongside some of the world’s most advanced practitioners of drone warfare, then transferring that knowledge back to Mexico and elsewhere. The potential implications for regional stability in the Americas—and for US homeland security—are profound. 

Why Mexican cartels would look to Ukraine

According to the French outlet Intelligence Online, Mexican and Ukrainian intelligence services are investigating reports that Mexican nationals joined Ukraine’s International Legion not to fight Russia’s invasion but to study FPV drone operations. These “volunteers” allegedly sought assignment to specialized units where FPV tactics were evolving most rapidly, acquiring knowledge and techniques that could accelerate the cartels’ learning curve by a matter of years.

Mexico’s National Intelligence Center reportedly sent a memo to Ukraine’s counterintelligence service, the SBU, warning that Spanish-speaking volunteers in the International Legion were deliberately targeting FPV training. The memo expressed concern that cartel-linked operatives were embedding within semi-clandestine International Legion units along the frontlines, such as Ethos, which has tested FPVs in large numbers. Some investigations have even extended to the possible involvement of non-Mexican actors, including individuals linked to the Revolutionary Armed Forces of Colombia, known as FARC. 

Ukraine’s International Legion was created as a noble effort to harness global solidarity against Russia’s invasion. Yet its open recruitment policy also created opportunities for malign actors to exploit the war as a proving ground. For Mexican cartels, whose drone programs have historically lagged global innovators by five to ten years, this represents a chance to leapfrog directly to the cutting edge. 

FPV drones are rapidly evolving

The Ukrainian battlefield has become a laboratory for drone warfare. At the outset of the war, Kyiv received small batches of manufactured loitering munitions, such as the US-supplied Switchblade. But these systems proved expensive, limited in scale, and vulnerable to Russian electronic warfare. Ukrainian innovators quickly pivoted to commercially available FPVs, originally designed for high-speed drone racing. 

The advantages of FPVs immediately became clear. They’re cheap—often under four hundred dollars per unit—highly maneuverable, and easily assembled from off-the-shelf parts. They can carry small explosive payloads with precision. And operating them only requires a level of dexterity that can be honed through widely available flight simulators. What began as improvisation soon evolved into industrial-scale production lines, backed by a global supply chain of parts and volunteer networks.

In the past three years, Ukrainian FPV tactics have advanced rapidly. Operators have integrated octocopters as airborne relays, extending control ranges by serving as signal repeaters. Artificial intelligence has been layered in, allowing FPVs to lock onto targets even when communications are jammed. More recently, Ukrainian units have deployed drones tethered with fiber optic spools, enabling secure, jam-resistant operations deep into contested environments.

This rapid cycle of innovation has created what military analysts call a “co-evolutionary dance” between Ukraine and Russia—new FPV tactics prompting new countermeasures, which in turn spur further adaptation. For outside observers, however, the key lesson is clear: These technologies are transferable, scalable, and relatively easy to learn. What takes years for militaries to institutionalize can be picked up in weeks by dedicated operators with access to training.

How cartels are using FPVs

For Mexican cartels, FPVs offer an ideal combination of affordability, lethality, and deniability. They can be assembled discreetly, launched from improvised sites, and targeted with extraordinary precision. In cartel-on-cartel warfare, FPVs might be capable of striking high-value targets inside fortified compounds, which previously required costly and high-risk raids. Cartels already have experience experimenting with drones. Roughly five years ago, some began dropping grenades and small improvised munitions from commercial quadcopters, many years after the Islamic State of Iraq and al-Sham, or ISIS, pioneered the tactic in Syria. These systems were crude and limited. FPVs, by contrast, bring maneuverability and standoff capability that could tilt the balance of power in ongoing conflicts.

There are already signs that cartels are adapting their FPV tactics. In their long-running arms race, the Sinaloa cartel and the Cártel de Jalisco Nueva Generación are reportedly testing FPVs in west-central Mexico. Videos have surfaced online of FPV attacks depicting targeted strikes. In anticipation, some cartel “narco-tanks” have been modified with protective cages to ward off drone strikes—eerily echoing the battlefield adaptations of Russian and Ukrainian forces.

The danger is not confined to cartel rivalries. Should US policy escalate to commonplace kinetic strikes against cartels—a possibility the Trump administration acted on recently—FPVs could quickly be redirected toward US personnel and infrastructure. Border patrols, forward operating bases, or even critical nodes in urban environments could become vulnerable to swarm attacks.

How the US can adapt to drone proliferation

Nonstate actors can now acquire capabilities once reserved for nation-states. Cartels are no longer merely criminal syndicates; they increasingly resemble hybrid entities blending organized crime, paramilitary force, and terrorist tactics. 

The United States and its partners cannot afford to treat cartel drone experimentation as a distant curiosity. The risk trajectory is clear: What begins as opportunistic adoption can quickly harden into doctrine. In response, the United States should take several steps to combat this threat:

1. Enhance intelligence cooperation. Washington should strengthen trilateral intelligence sharing with Mexico and Ukraine, focusing on the movement of personnel and technology linked to FPVs. Early identification of operatives seeking training abroad is critical.
2. Invest in counter-drone defenses. US Customs and Border Protection, the Department of Homeland Security, and Mexican security forces need access to the latest counter-drone technologies. This includes directed-energy weapons, jamming tools, and radar systems scaled to detect small, low-flying craft. 
3. Disrupt supply chains. While FPV parts are commercially available, targeted export controls and monitoring could slow bulk acquisition by malign actors. Cooperation with private manufacturers is essential. 
4. Reframe cartels as hybrid threats. US strategy must continue to evolve beyond treating cartels as criminal and terrorist organizations, instead combating them as “narco-multinational corporations” (narco-MNC). Their adoption of military-grade tactics—combined with terrorist-style violence—demands a whole-of-government approach that blends law enforcement, defense, and intelligence tools.
5. Plan for FPV attacks on the US-Mexico border. Scenarios involving FPV swarm attacks on border facilities should be integrated into homeland security through Multi-National, and Multi-Agency exercises. Waiting until the first operational use against US targets would be too late.

***

This is a brave new world where a disposable drone can checkmate a $24 million tank. In Ukraine, FPVs have bought time against Russia’s advance. In Mexico, their adoption by cartels could accelerate violence, destabilize regions, and threaten US border security.

The question is not whether cartels, or narco-MNCs, will experiment with FPVs—they already are. The question is how quickly the United States and its partners can adapt, anticipate, and counter this emerging threat. The diffusion of FPV technology underscores a sobering reality: the democratization of military power is no longer hypothetical. It is unfolding now, with profound consequences for security from Kyiv to Mexico City to Washington. 

Now is the time for the United States to defend against the growing threat that the democratization of drone warfare poses to its southern border.

Stephen Honan is a fellow with the Atlantic Council’s Counterterrorism Project, a senior consultant for BVG and Company, and a former explosive ordnance disposal officer for the US Navy.

The post Drug cartels are adopting cutting-edge drone technology. Here’s how the US must adapt. appeared first on Atlantic Council.

“The relationship between the United States and the Dominican Republic is rich with history and underpinned by our shared tenets of democracy, trade, and security. Here in New York’s Hudson Valley, I am proud to represent a large Dominican population, whose contributions to our economy, culture, and communities are felt every single day. We are proud to join the Atlantic Council’s Adrienne Arsht Latin America Center to announce the release of this comprehensive strategy for greater United States–Dominican Republic integration. This new, imaginative framework will ensure that our bilateral cooperation continues for decades to come—and will lead to the mutual expansion of our economic partnership, shared security efforts, and celebration of each other’s cultures.”

Representative Mike Lawler (R-NY)

“The partnership between the United States and the Dominican Republic is a cornerstone of stability, prosperity, and security in the Caribbean. The Atlantic Council’s Adrienne Arsht Latin America Center has provided a timely report offering strategic recommendations to leaders in both nations as we work collaboratively to deepen economic cooperation, enhance technological integration, and strengthen our shared security. I am honored to join the Council and sector leaders in recognizing this important contribution to advancing the United States–Dominican Republic relationship.”

Representative Adriano Espaillat (D-NY)

As global supply chains realign and geopolitical competition intensifies, the United States and the Dominican Republic have a unique opportunity to deepen economic, security, and institutional ties. By working together across six key strategic pillars both countries stand to enhance resilience, unlock new growth opportunities, and bolster regional stability. DR-US engagement presents the following strategic payoffs:

• Industrial supply chain security: The United States secures critical supply chains, reduces dependence on China, preserves high-value domestic production, and expands exports through integrated co-production. The Dominican Republic shifts from low-cost assembly to higher-value manufacturing, attracts long-term investment, integrates into strategic US supply chains, and develops a skilled, specialized workforce.
• Strategic infrastructure and regional logistics: The United States gains a logistics diversification partner in the Caribbean, enhances US Southern Command disaster and counter-narcotics capacity, enables a neighbor’s exit from Belt and Road-aligned infrastructure, and leverages the Dominican Republic for regional warehousing, transshipment, and space infrastructure. The Dominican Republic modernizes strategic infrastructure, becomes a regional logistics and disaster response hub, attracts investment in cutting-edge sectors such as space, and deepens security and counter-narcotics cooperation with the United States.
• Digital infrastructure and cybersecurity: The United States establishes a secure regional digital hub for the Caribbean, reduces Chinese tech penetration, expands secure cloud and intelligence networks, and strengthens cybersecurity coordination. The Dominican Republic leads Caribbean digital transformation, attracts international tech and data firms, evolves into a regional cybersecurity operations hub, and diversifies into high-value digital services.
• Energy security and critical minerals: The United States secures regional critical minerals and liquefied natural gas (LNG), diversifies supply away from China, supports Puerto Rico’s energy needs, and creates a regional partnership model. The Dominican Republic monetizes mineral resources, modernizes its grid and exports electricity, gains energy sovereignty, and becomes a regional resource development hub.
• Homeland and regional security: The United States locks in a security partner in the Caribbean, prevents regional instability, narcotics flows, and migration crises, reinforces counterterrorism and sanctions enforcement against hostile regimes, and enhances resilience against cyber and hybrid threats. The Dominican Republic strengthens border and national security, secures structured US support against spillovers from Haiti and regional shocks, institutionalizes anti-corruption and rule of law gains across political cycles, and bolsters international standing as a hemispheric security partner.
• Institutional alignment and bilateral mechanisms: The United States builds a resilient alliance with a regional partner, improves policy coordination, enhances diaspora engagement, and models whole-of-government cooperation. The Dominican Republic institutionalizes US–Dominican ties beyond political cycles, grows influence in Washington, engages diaspora capital and talent, and articulates long-term priorities with strategic continuity.

Marino Auffant is a nonresident senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security.

Enrique Millán-Mejía is senior fellow for economic development at the Atlantic Council’s Adrienne Arsht Latin America Center.

This report would not have been possible without the invaluable input, support, and
feedback throughout the research and drafting process of the DR-US Economic Strategy Advisory Group.

This initiative was made possible with the support of ASIEX (Asociación de Empresas de Inversión Extranjera) through a grant from the Ministry of Industry and Trade of the Dominican Republic.

Issue Brief Sep 19, 2025

Secure supply chains for the US run through its closest neighbors

By Jose Manuel Restrepo and Martin Cassinelli

Central America and the Dominican Republic are emerging as key partners for US economic security. Strengthening rule of law, workforce skills, and trade frameworks can secure lasting, mutually beneficial economic integration.

Americas Caribbean

Report Sep 17, 2024

From rhetoric to reality: Nearshoring in the Americas

By the Adrienne Arsht Latin America Center’s Nearshoring Working Group

Over the past five years, global shifts have reshaped the world. China’s rise, US-China tensions, COVID-19, and Russia’s 2022 invasion of Ukraine exposed supply chain vulnerabilities, pushing resilience to the top of the agenda. Latin America and the Caribbean (LAC) can seize the opportunity to provide solutions for US companies through nearshoring.

Caribbean Central America

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post Partnering for economic security: A comprehensive strategy for greater United States–Dominican Republic integration appeared first on Atlantic Council.

This week, a US Army Corps of Engineers mission arrived in Guatemala to advance plans for a $63 million feasibility and design phase, part of an estimated $600 million project fully financed by the Guatemalan government. This project aims to double the port’s capacity by adding four new berths and upgrading logistics infrastructure. A second phase will address logistical capacity and improve operations to handle expected demand increases. Additional potential plans include improvements to Puerto Santo Tomás de Castilla, Guatemala’s key port located on the Atlantic coast, as well as to the railway infrastructure linking both ports.  

More than an infrastructure upgrade, this agreement is part of a broader US strategy to deepen economic ties with reliable partners in the region while creating jobs, strengthening supply chains, and boosting regional trade. 

Why this matters

The United States is Guatemala’s main trading partner at a time when several countries in the region are deepening their ties with China. In 2024, trade in goods between the United States and Guatemala reached $14.7 billion, with a $4.7 billion surplus in favor of the United States. Yet, Guatemala’s weak infrastructure remains a bottleneck for smoother trade and increased flows. 

Puerto Quetzal is the country’s main entry point for imports, handling 47 percent of inbound goods. These include corn, wheat, cement, gasoline, and fertilizers. This makes it central for trade and food security, as well as the operation of the country’s transport, agricultural, and construction sectors. Major exports from the port include agroindustry products such as sugar, bananas, and coffee. 

In recent years, Puerto Quetzal has faced congestion and operational delays, with wait times stretching up to ninety days. Each day of delay costs vessels an estimated $20,000 to $25,000, potentially adding up to more than one million dollars per vessel in some cases. The US-Guatemala project has the potential to change that. More berths and enhanced logistics can make trade cheaper and more reliable for Guatemalan exporters, US businesses, and regional users. Puerto Quetzal is strategically located between Mexico’s Port of Manzanillo, the largest Pacific port in the region, and the Panama Canal, positioning it to become a major hub in the Americas.