Trump 2025 and the Latin American Money Maze
When Donald Trump steps back into the White House in 2025, the world’s financial markets instantly feel a bit like a surprise quiz. Latin America isn’t exempt from the buzz—just as if the last semester’s calculator had gone missing.
Exports: The Game of Windy Rivers
The uncertainty is a slippery tidal wave that can ripple across Latin America’s export sector in countless ways. Picture a sailor who guesses the wind direction in the dark—exporters are taking the same wild leap, hoping the currents are a bit kinder.
Global Growth: A Global Slow‑Mo
Outside the United States, the global economy’s growth has slowed to a go‑slow pace. It’s like everyone’s trying to watch a movie with the volume turned down, except for our Latin American economies that still crave a louder soundtrack.
Capital Flows: Let’s Still Be Patient
Because of the surrounding volatility, the capital flow into Latin America might slow as the calendar year flips its pages. Imagine a lullaby that keeps humming on a shaky record—investors are picking their pockets, but the beat remains uncertain.
Currency Outlook: Peso Prospects for 2025
- Mexican peso (MXN)
- Colombian peso (COP)
- Chilean peso (CLP)
Each of these pesos will face a checkered road ahead: a steep climb, some bumps, and a question of how the market finally chooses a direction in 2025.
Mexican peso (MXN): Relative Protection from the USMCA, Despite Uncertainty
2025 Peso Crisis: Trump‑Tenders and Trade Tides
Picture this: a shiny Mexican peso on one side, a looming “What if…?” umbrella on the other. 2025 isn’t just a calendar year; it’s a rollercoaster of trade speculation, and the dollar keeps your head spinning like a top.
Why the peso is holding its breath
- USMCA’s safety net – The United‑States‑Mexico‑Canada Agreement keeps most of the trade dust from swirling in, but it’s not a magic shield.
- Trump’s tariff teasers – He’s hinting at up to 25% tariffs for goods from Mexico and Canada, raising chills that even the coolest of kitchen estuaries would shiver.
- Imports from China could feel the pinch too: hello, “car and chip curtailments” on the horizon.
The 2026 Review – A Sneak Peek
The treaty won’t literally go on a vacation until next year, but the nascent discussions might already stir the pot.
- Focus is likely on restricting Chinese automotive & electronics imports.
- Negotiating how to keep Mexico’s judicial reforms in line with the USMCA’s spirit.
Short‑term Mood Swings
Right now, headlines can dampen the peso’s enthusiasm. But keep your optimism, the USMCA isn’t going to punch out just yet. Mexico should serve as the U.S.’s “mini‑China” counterpart as the nation battles the Asian giant.
Bank of Mexico’s “Steady‑Stir” Plan
Banxico is running a “cautious easing” car. A likely terminal rate of 9% (down from 10.25%) won’t give the peso a free fall, but the stock market volatility will keep you on your toes.
Bottom line? The peso is doing a tightrope walk between stable partnerships and the looming threat of tariffs. As the trading desk passes the baton between Trump’s promises and USMCA’s safeguards, investors should keep an eye on the clock, just in case.
Colombian peso (COP): Vulnerable to External Factors and Weak Fundamentals
What’s Up With the Colombian Peso in 2025?
The Colombian peso is feeling like that awkward kid at the school dance—always standing a little too far from the center of attention. A mix of global market drama and home‑grown fiscal hiccups is keeping it out of shape.
External Giggles that Drag It Down
- Global Growth Floops: Outside the US, economies are playing a slower‑pace game. When growth falters, foreign investment slows, and the peso takes a hit.
- Oil Prices on a Decline: In 2025, oil is expected to swing down to $75 per barrel—down from $80 last year. Less oil revenue means fewer dollars floating into Colombia’s coffers.
Internal Tug‑of‑War: The Fiscal Fumble
- Deficit Drama: The government’s been trying to bring the fiscal gap back to 3% of GDP (the neat number from before the pandemic). But projections show a stubborn above‑5% gap for both 2024 and 2025.
- Debt Clawback: With debt levels topping 60% of GDP, the peso’s cushion is thinner than a cat’s whisker. More debt means more interest, squeezing the economy tighter.
Tax Revenue Traps & Rule Tweaks
Investors are pointing their binoculars at the peso and feeling a little uneasy because:
- Low Tax Revenues: The tax system is like a leaky bucket—money goes in, but not fast enough.
- Rule Revamping: Efforts to tweak the fiscal rule have caused a ripple effect. If the rule is too relaxed, the deficit can balloon; if too strict, it can smother growth.
Why the Peso Is One of the Region’s Most Vulnerable Currencies
When you combine shaky foreign growth, falling oil prices, and a fiscal strategy that’s wobbling like a jellyfish, the peso’s future looks like a tightrope act. Investors are already counting on their safety nets, keeping a keen eye on every policy flick and market move.
Bottom Line: Keep Watching the Peso, but Do It with a Sense of Humor
While the peso’s path is uncertain, staying informed and staying chill can help you navigate the roller‑coaster. After all, a little laughter goes a long way when the financial world feels like a maze of numbers and policies.
Chilean peso (CLP): China’s Slowdown
Chilean Peso in 2025: A Tightrope Walk
Picture the Chilean peso as a seasoned tightrope walker in 2025 – balancing on a swaying line that stretches from the bustling streets of Beijing to the windswept plains of Santiago. With China’s economic growth slowing, the runway ahead becomes a little bit shakier for the Chilean currency, but a silver lining glints on the horizon.
Why China’s Slowdown Matters
When China’s giant is tone‑down, global demand for commodities dips, and that ripple hits Chile hard. The peso could feel the pinch, as slower sales of Chile’s prized copper affect export earnings.
Stockpile Strategy: Turning the Tide
- Stockpiling of raw materials by China could. Why? Because bigger reserves help keep commodity prices steadier, giving Chile a cushion.
- China is ramping up trade with “friendly” partners like Chile – a move that may help keep export volumes from falling into a dark hole.
China: The Copper Magnet
Chile and China share a love affair centred around copper. With over half of the country’s copper exports heading straight to China, the two nations are tightly knit. Think of one as a steady wind, the other as a booming wind tunnel.
Rate Differential: The Silent Threat
Here’s the kicker – the gap between the Chilean and American rates is narrowing. The US, draped in its “American exceptionalism” cloak, is battling persistent inflation. If the Central Bank of Chile cuts rates from 5.25% to 4.5% in 2025, the peso might lose some of its sparkle to foreign investors.
Bottom Line
- China’s slower growth could put some pressure on the peso.
- However, strategic stockpiling and robust copper trade may keep commodity prices afloat.
- The tightening rate differential with the US could make the peso less enticing to overseas investors.
In short, 2025 is a balancing act: Chile’s peso will need to stay buoyant amid China’s cooling currents, while also navigating the tricky seas of US inflation and monetary policy. The dance is set – and the world’s eyes will be on how Chile steps.
Conclusion: A Complex Environment for LATAM FX in 2025
Latin America’s Dollar‑Dance: A 2025 Forecast You Can’t Ignore
What’s the Buzz?
Picture this: a wild west of currencies, fueled by political twists, economic head‑winds, and surprise secret Santa moments from the US. 2025 is shaping up to be a real rollercoaster for the money in Latin America.
Trump’s Back‑Round Dance
The big drama? Donald Trump is back in the White House. That’s like bringing a rock‑band to a quiet town—everything gets louder and a bit unpredictable. Trade policies are expected to tighten up, especially when it comes to the exits that Mexican, Colombian, and Chilean exporters rely on.
USMCA: A Lifeline for the MXN?
The United States‑Mexico‑Canada Agreement could be a safety net for the Mexican peso (MXN). Think of it as a cozy blanket in a cold winter. But it may not be enough to keep the heat from staying out.
Why the COP & CLP Might Feel the Chill
Colombia’s peso (COP) and Chile’s peso (CLP) are on thinner ice. They’ve got lazy internal fundamentals—think of a budget that’s more “fluffy” than “solid.” Add a global slowdown, and the story looks like a game of “keep up the balance.”
Practical Takeaway for Investors
- Expect the market to be a volatility hotspot in 2025.
- Keep one eye on US policy changes—Trump’s moves are headline‑making.
- Watch the economic pulse at both the national and global level for signals.
- Countries that can pivot fast will see stronger currency performances.
Bottom line: Brace yourself for a bumpy ride. The ability of each country to adapt will be the real treasure chest in what’s shaping up to be one of the most chaotic years for LATAM foreign exchange in recent memory.
Stay in the Loop
Want real‑time updates for this topic? Subscribe now—you’ll get the freshest insights straight to your device.
