President & CEO – Enlace Column Q1-2025
Reflecting on the past three months and the flurry of Executive Orders since the inauguration of President Trump, the United States is at a historic crossroads in its relationships with countries throughout the Western Hemisphere, a region fraught with challenges as the global paradigm transitions away from the post-Cold War Washington Consensus. This shift, coupled with the rise of U.S. economic nationalism, changing geo-politics, on-going migration pressures and China’s growing influence in the region, requires a badly needed recalibration of U.S. foreign policy in the Americas that must be managed with care.
The strategic importance of the Western Hemisphere
Whether or not Trump’s overtures about annexing Canada or the Panama Canal are real or just a negotiating tactic, what remains clear is that he recognizes the strategic importance of the Western Hemisphere to U.S. national security interests. That said, there is a risk that his bullying approach to hemispheric relations could backfire and alienate trusted allies.
Hemispheric trade agreements under tariff pressure
Trump’s concerns over the illicit fentanyl trade and migration are valid but there are better ways to jointly address these shared regional challenges with Mexico and Canada than threatening to impose 25% tariffs that will hurt the U.S. economy, be highly disruptive to cross-border regions like San Diego-Tijuana and erode trust with our USMCA partners. The on-going uncertainty of tariffs is currently stymying opportunities for investment and job creation among businesses dedicated to cross-border trade. What companies seek is regulatory certainty.
To protect U.S. interests, we need to work towards building reliable North American supply chains and expanding trinational cooperation to strengthen our hemispheric resiliency and security amidst growing tensions with China. This requires trusted neighbors and allies aligned on common principles based on good democratic governance and the rule of law.
On April 2nd, the Trump Administration will announce his tariff plan targeting the top 15 countries with trade surpluses with the U.S. that includes Mexico and Canada. The tariffs come as part of Trump’s Americas First Trade Policy issued on January 20th and his Presidential memorandum on Reciprocal Trade & Tariffs issued on February 13th. To avoid serious disruption to hemispheric trade relationships, including with free trade agreement partners (USMCA, CAFTA-DR, Panama, Colombia, Peru and Chile), the way in which tariffs are defined and implemented needs to managed with great attention to detail. There is on-going concern about Trump’s proposed reciprocal tariffs and the idea of aligning them to the value taxes (VATs) of our trading partners, but the President is now re-thinking this idea. Trump now says that he’ll, “be more lenient than reciprocal,” So, we’ll need to just wait and see.
Trump Administration de-funding and impact on climate resiliency initiatives
In its first week, the Trump Administration also took action to shutter the U.S. Agency for International Development (USAID) and defund a wide range of previously Congressionally authorized direct foreign assistance through another Executive Order. Among those impacted were two cooperative agreements that the Institute of the Americas (IOA) co-managed with a focus on climate resiliency and action. As this news came early in our fiscal year, we’ve taken the appropriate steps to tighten the fiscal belt and move forward without this funding. We are working proactively to shore up additional outside private funding to keep elements of our work alive in support of the now-defunct Cities Forward program, which will benefit the municipalities that we were serving across Latin America & the Caribbean.
Impacts to the IOA’s own programs aside, as the Trump Administration works to re-define the country’s international aid and development architecture, it has a historic opportunity to enhance the United States’ presence and influence across the Americas at a time when it is desperately needed, but this will require a nuanced approach to addressing the region’s needs and aspirations for economic growth, peace, safety and stability while also offering a compelling alternative to China’s growing economic, political and cultural presence in the region through its Belt and Road Initiative. Whether this is possible remains to be seen but I remain hopeful.
Here, an opportunity exists through the Americas Act, a bipartisan initiative, co-sponsored by U.S. Senator Bill Cassidy (R-Louisiana), intended to “establish a regional trade, investment, and people-to-people partnership of countries in the Western Hemisphere to stimulate growth and integration through viable long-term private sector development.” Key provisions of the Americas Act include: regional trade expansion through the establishment of an Americas Partnership providing a potential pathway for countries like Uruguay and Costa Rica to join the USMCA, thereby creating a more integrated and resilient regional economy; investment promotion with an emphasis on nearshoring and bolstering regional supply chains, strengthening hemispheric energy security and enhancing e-governance across the Americas.
Opportunities to stimulate investment, drive prosperity & mitigate border crises
If President Trump gets things right, he and his Administration have a historic opportunity to leave a lasting legacy across the Hemisphere that will not only make the United States more secure but also build a brighter future for people across the Americas which, over time, will also reduce migration pressures along the U.S. southern border.
Here at the Institute of the Americas we remain committed to our role as a non-partisan, independent nonprofit organization with a mission to promote economic development and regional integration across the Americas. Since our founding in 1981, we have dedicated ourselves to being a catalyst for positive change across the hemisphere focusing on the private sector to encourage economic and social reform, enhanced collaboration and strong political and economic relations between Latin America, the Caribbean, the United States, and Canada.
For those of you who are current IOA supporters, I thank you for your steadfast commitment to our mission. For those of you seeking to do your own part to catalyze positive change across the Americas, I encourage you to consider getting involved by making a charitable gift to support the high-impact programs and initiatives of the Institute of the Americas in the areas of energy, environment & climate change, and economic competitiveness in this era of transformational change that is beginning to re-define the future trajectory of the Western Hemisphere.
Sincerely,
Richard Kiy
President & CEO