Welcome again to Overseas Coverage’s Latin America Temporary.
The highlights this week: Copper costs soar amid rising international demand and U.S. tariff threats, Colombia and Ecuador have a commerce spat, and Mexico’s president makes an uncommon demand of a Okay-pop group.
Latin American policymakers have lengthy pitched potential traders and geopolitical companions on entry to mineral riches. The area is residence to many uncooked supplies which can be important to the inexperienced transition, together with lithium, which is utilized in batteries.
Lately, the area’s lithium deposits have attracted investments and a spotlight from the United States, Europe, and China. Lithium costs jumped greater than sixfold from 2021 to 2023 amid a provide crunch, however they’ve since returned to prior ranges.
Now, one mineral of the second is copper. Resulting from international electrification and rising energy utilization, worldwide demand for copper is anticipated to outstrip provide by 30 p.c by 2035, Jonathan Value of Teck Assets advised FP’s Ravi Agrawal final week on the World Financial Discussion board in Davos, Switzerland.
The Trump administration additionally imposed tariffs on some copper merchandise in 2025 and stated it’d regulate them in 2026. As firms around the globe stockpiled copper in anticipation of the levies, its worth jumped to a file excessive this month.
No matter Trump’s eventual tariff, future international demand bodes properly for the most important copper-exporting nations, a lot of that are in Latin America. Chile was the world’s high exporter of uncooked copper in 2024 at greater than $31 billion, adopted by Peru. Brazil and Mexico additionally every exported at the least $3 billion of the mineral that yr, rating fifth and sixth globally, respectively.
The copper worth spike “might be one of the best macroeconomic information we’ve had in current instances,” Chilean economist Cecilia Cifuentes stated at an occasion in Santiago earlier this month. Throughout a interval of elevated copper costs from round 2005 to 2013, Chile’s and Peru’s economies boomed.
In Chile, right-wing President-elect José Antonio Kast is making ready to take workplace in March. He has pledged to slash rules throughout the financial system. Chile’s council of mining firms expects that the nation’s copper output might rise within the first yr or two of Kast’s presidency, although not as a lot because the 20 p.c uptick that some on his crew have estimated.
Peru’s forecasts are extra conservative. Much less new funding in copper is going on than through the 2000s increase, Peruvian Institute of Economics Common Supervisor Carlos Gallardo advised Overseas Coverage, citing an increase in unlawful mining and issues with crimson tape in addition to native protests towards mining. Though Peru will elect a brand new president in April, Gallardo stated that main candidates have typically prevented going into element about find out how to enhance funding within the sector.
In neither Chile nor Peru do main industrial insurance policies for the copper sector seem like on the horizon. Such insurance policies might encourage the manufacturing of value-added merchandise similar to copper wires or foils for electrical grids—giving nations a bigger slice of the inexperienced expertise pie. Whereas industrial insurance policies don’t at all times yield their supposed outcomes, they’re extra viable when the substances in query are in excessive demand, as copper is now.
International locations similar to Chile “maintain plenty of very useful playing cards when it comes to both negotiating international direct funding or constructing out their copper capability,” stated minerals analyst Chris Berry of Home Mountain Companions. Lately, he added, personal lithium firms have accepted necessities from the Chilean authorities that they hike royalty funds.
Chile’s progressive outgoing administration enacted an bold industrial coverage for lithium, creating new permissions for personal companies to mine untapped reserves in the event that they labored along with state firms. President Gabriel Boric tried to encourage companies to course of lithium in Chile as an alternative of simply mining it.
Chilean analyst Maximiliano Véjares of Johns Hopkins College’s Web Zero Industrial Coverage Lab stated that Boric’s coverage notched some victories, together with the creation of a public-private firm that has a brand new license to mine for greater than 30 years.
However the technique additionally fell brief on a few of its targets. Chinese language companies BYD and Tsingshan suspended plans to construct lithium processing vegetation in 2025. Chilean officers cited falling lithium costs.
No less than one Latin American authorities is making an attempt to advance an industrial coverage for copper. Mexican President Claudia Sheinbaum’s administration is pitching the nation as a vacation spot for copper wire and cable vegetation that might arrange store close to current copper mines—at the same time as the federal government maintains a freeze on new mining concessions.
However within the yr since Mexican officers have begun touting this technique, no such vegetation have been introduced. In Mexico, traders face each uncertainty over U.S. copper tariffs and about what Mexico’s commerce take care of Canada and the USA will seem like on the finish of a overview that is because of conclude by July.
Sunday, Feb. 1: Costa Rica holds common elections.
Tuesday, Feb. 3: Trump and Colombian President Gustavo Petro meet on the White Home.
Performing Haitian Prime Minister Alix Didier Fils-Aimé speaks in Port-au-Prince, Haiti, on Nov. 16, 2024.Clarens Siffroy/AFP by way of Getty Photographs
Haiti’s management limbo. The mandate for Haiti’s Transitional Presidential Council (TPC) is set to run out on Feb. 7. The interim governing board was established after appearing President Ariel Henry resigned in mid-2024 and was designed at hand over energy to a newly elected chief, however elections have been delayed till this August.
Amid an absence of clear consensus about what Haiti’s management will seem like within the interim, U.S. Secretary of State Marco Rubio stated final week that he supported interim Prime Minister Alix Fils-Aimé staying on. Fils-Aimé was appointed by the TPC in 2024 however is separate from it.
Latest occasions recommend that the highway to elections could also be rocky. 5 of the council’s 9 members tried to take away Fils-Aimé by vote final week, prompting public warnings from the USA, Canada, and the European Union.
These interventions underscore how a lot outdoors actors proceed to affect Haiti because it awaits the arrival of an estimated 5,500-person safety drive accepted by the U.N. Safety Council final yr. The deployment is designed to assist Haitian authorities wrest again territorial management from gangs.
Amid the federal government infighting of current days, a U.N. envoy gave an estimated deployment date for the drive: by summer season, or fall on the newest.
Lula and Trump discuss. Brazilian President Luiz Inácio Lula da Silva will journey to the White Home within the coming weeks, he introduced after a cellphone name with Trump on Monday. Lula stated that each leaders hailed the constructive relationship they’ve in-built current months—a major turnaround after Trump introduced 50 p.c tariffs on Brazil final July.
The pair mentioned Venezuela, Trump’s plan for his so-called Board of Peace, and cooperation towards organized crime, Lula added. Brazil and the USA are additionally in talks on a rare-earths deal, the Monetary Occasions reported.
Washington is seeking to diversify its sources of rare-earths minerals following China’s squeeze on exports to the USA final yr. Brazil is wealthy in them, and U.S. public and personal traders have introduced new agreements with Brazilian rare-earths producers in current months.
Mexico needs más BTS. A current communiqué from Sheinbaum to the South Korean authorities included an uncommon request: extra live shows throughout Mexico by Okay-pop sensation BTS.
The band has three Mexico Metropolis appearances booked on its upcoming tour, however they bought out in minutes. Sheinbaum stated on Monday that she nonetheless had not obtained a response from Seoul on the matter however hoped its reply could be “constructive.”
The musical diplomacy may also be an effort to take care of constructive ties between the 2 nations following Mexico’s current tariffs on a number of commerce companions. Whereas China was essentially the most affected by these tariffs—which apply to all nations that Mexico has no free commerce take care of—South Korea was hit, too.
South Korea’s musical delicate energy has lengthy been a key diplomatic instrument for the nation. However South Korean diplomats in Latin America have additionally prided themselves on their capacity to achieve fluency in native music. Seoul’s samba- and pagode-singing former ambassador to Brazil made a splash within the nation.
Along with Mexico, which different Latin American nation lacks a free commerce take care of South Korea?
Chile
Ecuador
Peru
The Dominican Republic
The nations have a bilateral commerce and funding promotion settlement, nevertheless it falls wanting broad tariff reductions that South Korea has established with a number of different Latin American nations.
Ecuadorian President Daniel Noboa offers a thumbs-up in Panama Metropolis on Jan. 28. Subsequent to him Panamanian Overseas Minister Javier Martínez Acha.Arnulfo Franco/AFP by way of Getty Photographs
Political variations between Petro, a leftist, and center-right Ecuadorian President Daniel Noboa spilled right into a expensive commerce escalation in current days.
Tensions kicked off with a social media publish from Noboa on Jan. 21 that accused Petro of not doing sufficient to fight drug trafficking and unlawful mining—echoing a frequent declare made by Trump, with whom Noboa has carefully aligned. Noboa introduced a 30 p.c tariff on Colombian items consequently.
Highlighting current anti-drug actions taken by his authorities, Petro stated he would reply reciprocally and ordered the suspension of Colombian electrical energy gross sales to Ecuador in addition to 30 p.c tariffs on sure Ecuadorian items. Noboa hit again by mountaineering the charges for Colombian oil to cross via Ecuador from $3 to $300 per barrel.
As a result of Ecuador is extra depending on Colombian commerce than vice versa, normally Colombia would have the higher hand in a spat like this, analyst Sebastián Hurtado wrote Thursday in Americas Quarterly, however Trump’s closeness to Noboa is a “wild card.”
So too are Trump’s anti-immigration insurance policies: Noboa’s alignment with Washington didn’t cease Ecuador from formally protesting to the USA this week after an ICE agent tried to enter the Ecuadoran consulate in Minneapolis.
As each Colombia and Ecuador stand to undergo heavy financial losses from the scuffle, Petro sought a mediated resolution at a regional financial summit this week in Panama, calling for talks with Noboa.
