Latin America News
LAST UPDATE: August 1, 2025
Trump Gives Mexico 90-Day Reprieve From Higher Tariffs
Just hours before a planned tariff hike, Trump granted Mexico a 90-day extension of existing tariffs (25 % on cars/fentanyl‑linked goods; 50 % on steel, aluminum, copper). Meanwhile, Canada faces higher tariffs (up to 35 %), and Brazil up to 50 %.
Insight
Mexico’s diplomatic outreach paid off, staving off immediate increases. The move contrasts with harsher measures on other nations. It reflects a transactional approach: rewards for cooperation, penalties for inaction—particularly on drug control and trade reforms.
Canada’s GDP shrinks in May, could avoid contraction in second quarter
Canada’s GDP contracted by 0.1 % in May, largely due to declines in retail trade and mining. Preliminary estimates suggest June may post 0.1 % growth, implying Q2 annualized growth of +0.1 %, avoiding a technical recession.
Insight
The May contraction reflects vulnerability to trade shocks and sectoral weakness, but recovery signs in June provide some optimism. Still, forecasts remain uncertain, with the Bank of Canada projecting a possible –1.5 % annual contraction in Q2.
Brazil’s public sector gross debt rises in June on interest costs
Public sector gross debt climbed to 76.6 % of GDP in June, up from 76.1 % in May. A primary deficit of 47.09 bn reais and rising interest payments drove the increase.
Insight
The debt uptick underscores negotiating fragility: higher interest burdens are escalating Brazil’s debt load at a time when fiscal flexibility is shrinking, posing risks to credit metrics and policy room.
Lula’s Defiance Pays Off as Trump Blinks on Brazil Tariffs
President Lula’s refusal to acquiesce to U.S. demands on Bolsonaro’s prosecution coincided with Trump easing off proposed 50 % tariffs, granting exemptions instead.
Insight
Bolsonaro-linked political tensions failed to sway U.S. policy immediately: Lula’s firm stance appears to have earned Brazil temporary reprieve, reflecting how political credibility can affect trade outcomes.
Where is the Venezuelan Oil? US Refiners Want to Know
U.S. refiners are puzzling over delayed flows of Venezuelan crude, even though Chevron has resumed operations under relaxed sanctions.
Insight
The gap between policy change and actual supply highlights operational lags and geopolitical uncertainties: refiners may face tight crude markets unless Venezuelan volumes ramp up quickly.
Mexico’s Sheinbaum Says 90-Day Tariff Extension Allows for Long-Term Deal
Mexican President Sheinbaum confirmed a 90‑day reprieve from planned U.S. tariff hikes following a call with Trump, giving both sides time to negotiate a broader trade agreement.
Insight
The delay signals willingness on both sides to engage in diplomacy: Mexico gains breathing room, while the U.S. buys time to link trade measures to security cooperation.
Argentine Peso Posts Worst Month Since Milei’s 2023 Devaluation
The Argentine peso declined over 4.4 % in July—its steepest monthly fall since the crawling‑peg devaluation initiated by Milei in 2023.
Insight
Ongoing exchange rate pressures point to investor distrust in the peg system. Mounting volatility may complicate Argentina’s IMF deal and undermine Milei’s economic agenda.
Colombia central bank holds benchmark rate, to government’s chagrin
Colombia’s central bank kept its benchmark interest rate at 9.25 %, defying government criticism to reduce rates sooner as inflation eases.
Insight
The bank’s cautious stance reflects concern over fiscal uncertainties and inflation resilience. The rate pause highlights tensions between monetary prudence and political pressure to stimulate growth.
