Latin America News
LAST UPDATE: July 1, 2025
Argentina Must Turn Over 51% Stake in YPF, US Judge Rules
A U.S. judge ordered Argentina to transfer its controlling 51% stake in state-owned oil company YPF to satisfy part of a $16.1 billion judgment tied to its 2012 nationalization of the firm .
Insight
The ruling is a major legal setback for President Javier Milei’s government, reducing control over YPF—a central asset in economic recovery plans—and creating urgency to negotiate with creditors or pursue aggressive appeals.
Argentina legal challenge in UK to pause enforcement of YPF ruling
Argentina has asked London’s High Court to delay enforcement of the U.S. ruling requiring transfer of YPF shares, arguing it holds no assets in the UK; plaintiffs say any delay should require a $2.5 billion security deposit .
Insight
The UK legal move reflects Argentina’s multi-jurisdictional strategy to delay enforcement and protect assets, but may prompt counterclaims or additional legal costs if security is demanded—a high-stakes legal standoff.
Brazil’s public sector debt edges up to 76.1% of GDP in May
Brazil’s public sector gross debt rose to 76.1% of GDP in May from 76.0% in April, largely due to a 23.9% year-on-year surge in interest payments. Meanwhile, the primary budget deficit was narrower than expected, and the country achieved a 0.2% primary surplus over the past 12 months (reuters.com, reuters.com).
Insight
The debt increase underscores the pressure from high interest rates (now 15%). While Brazil has maintained fiscal discipline—evidenced by its primary surplus—the rising interest burden underscores the challenge of containing debt servicing costs.
Canada rescinds digital services tax to advance stalled trade talks with US
Canada abruptly withdrew its planned 3% digital services tax targeting U.S. tech firms, hours before it was to take effect, in an effort to revive trade negotiations. A target date of July 21 has been set for finalizing talks .
Insight
Ottawa’s strategic reversal highlights the power imbalance in Canada–U.S. economic diplomacy. It underscores Canada’s prioritization of broader trade cooperation over digital tax sovereignty—reshaping the landscape for digital taxation and tech policy.
White House Claims Victory After Canada Rescinds Digital Tax
The White House proclaimed a diplomatic win after Canada canceled its 3% digital services tax targeting U.S. tech giants. Press Secretary Karoline Leavitt stated Canadian PM Mark Carney “caved” to Trump, who had suspended trade talks as leverage.
Insight
Portraying the rollback as a diplomatic triumph, the administration used both economic pressure and political messaging to underscore U.S. influence. The tactic highlights how trade policy and domestic political signaling are increasingly entwined in Trump-era diplomacy.
US to restart trade negotiations with Canada immediately, White House says
White House economic adviser Kevin Hassett confirmed that trade negotiations with Canada would restart immediately following the rescinding of Canada’s digital services tax .
Insight
The rapid resumption of talks underscores how single issues can halt or restart major negotiations, reflecting the high-stakes, zero-sum dynamic characterizing U.S.–Canada trade policy.
Barbados Debuts Disaster Protection Clause in Global Bond Sale
Barbados issued $500 million in bonds with groundbreaking clauses allowing payment deferrals for up to two years in case of disasters or pandemics .
Insight
By embedding disaster resilience in debt contracts, Barbados is pioneering fiscal innovation for climate-vulnerable nations. If markets accept such clauses cheaply, it may set a global precedent.
Ecuador to receive $1 billion foreign investment linked to renewable energy
Ecuador will receive $1 billion in foreign investment in renewables through 2026: $400 million from China’s Power China and $600 million from Spain’s Cox Energy.
Insight
This investment underscores growing global confidence in Ecuador’s clean energy rollout, highlighting a broader shift of capital toward climate-aligned infrastructure in Latin America.
Chile Peso Gains as Communist Win Is Seen as a Step Too Far for Left
The Chilean peso rose sharply after Communist Party candidate Jeannette Jara won the Unity primary, allaying fears of a radical left government.
Insight
Markets appear to favor Jara as a sign of moderation—this may reshape the electoral contest, signaling potential stability and continuity in economic policy.
