Negative Impact of the Trade War on Latin America's Growth, According to Cepal

The trade war initiated by the United States will cause Latin America's growth to drop to 2%, as projected on Tuesday by the Cepal. In a statement, the Economic Commission for Latin America and the Caribbean (Cepal) warned that the region is facing "a rather complicated international environment filled with uncertainty" following announcements related to tariffs by the United States.

Before Donald Trump took office in December, Cepal had estimated that regional expansion could be 2.4% by 2025. However, it revised these projections "downward" after the announcement made on April 2, when Trump confirmed reciprocal tariffs that resulted in an overall customs rate of 10% for most Latin American countries, according to the United Nations agency. China was one of the most affected and responded with similar measures on U.S. products. Cepal noted that Latin America will experience a direct impact on its trade exchanges with the United States, which, along with China, are its main trading partners. Volatility in financial markets, a slowdown in external demand, instability in exchange rates, and a sharp decrease in both domestic demand and investments will also affect the region, according to Cepal. Due to its greater dependence on the U.S., the Caribbean, Central America, and Mexico will be the most adversely impacted regions. In a scenario where most projections for this year are downward, Argentina is the only country showing an increase (+0.7%), which could allow it to reach a GDP growth of 5% in the second year of Javier Milei's administration, a president with libertarian tendencies. Meanwhile, Brazil, the largest economy in the region, will grow by 2%. Information provided by AFP.

This analysis highlights Latin America's vulnerability to international trade tensions, making it even more crucial to diversify trade partners and strengthen resilience in the internal economy. In times of adversity, innovation and adaptability will be key to facing the forthcoming challenges and seizing the opportunities that may arise from this uncertain situation.