The key Latin American political pressure points to watch in 2025

Argentina:

In Argentina, as President Javier Milei’s administration looks towards 2025, it will continue negotiating with Congress to ensure governability and advance its agenda. The president will promote his strategy to control inflation and attract foreign capital.

In his first year, Milei focused on austerity, controlling the fiscal deficit, and recovering economic activity. However, Argentina has seen increased poverty, ongoing inflationary shocks, and currency devaluation. Milei will face challenges in reducing inflation while balancing social demands. China remains a key commercial partner despite Milei’s criticism. He declined to join BRICS and tried to build closer ties with the US, which may benefit from Donald Trump’s re-election.

Brazil:

Heading into 2025, a pre-election year in Brazil, political tensions are likely to escalate. President Lula remains the key figure on the left, while the right scrambles to fill the gap left by Jair Bolsonaro, who plans to run despite being ineligible. Brazil’s growing public debt concerns analysts, and budget cuts to control inflation may trigger public servant strikes. Limited GDP growth could negatively impact Lula’s popularity.

Lula continues to position Brazil as a key international player, especially for the global south, and has attempted to mediate the Russia-Ukraine conflict but without significant progress. He faces criticism for lacking long-term disaster prevention and climate resilience plans, despite his campaign focus on environmental conservation. These issues are likely to persist into 2025.

Chile:

In Chile, after two failed constitutional redrafting processes, President Boric’s administration has lost momentum and congressional support for reforms, leading to uncertainty in 2025’s elections. Boric’s diplomatic stance, particularly his criticism of human rights abuses in Venezuela, El Salvador, Cuba, and Nicaragua, is positively viewed.

Despite not improving social cohesion, Boric is seen as a moderate who avoided exacerbating polarisation. His political weakening may result in a right-leaning, pro-business candidate winning in 2025, taking office in March 2026.

Colombia:

After two years in power in Colombia, President Gustavo Petro’s government has delivered mixed, modest results with few substantial transformations. This trend is unlikely to change in 2025 due to fiscal constraints, limited political capital, and pre-election strategies. Corruption allegations and various probes have damaged the government’s credibility, impacting the president’s approval rating.

The prospects for the “Total Peace” initiative have decreased. Limited economic growth will restrict the administration’s ability to achieve key goals like the energy transition, infrastructure enhancement, and reorienting industries towards greener activities.

Mexico:

President Claudia Sheinbaum of Mexico won the June election by a landslide, reflecting the popularity of her predecessor AMLO, who ended his term with a 60% approval rating despite negative perceptions in key areas like security. AMLO will remain a key political figure, leading Morena’s factions. Sheinbaum, known for her strong leadership as Mexico City mayor, will lead an autonomous administration while advancing AMLO’s legacy and proposals.

Sheinbaum supports the controversial judicial reform bill to elect federal and supreme court judges by popular vote, raising business community concerns. Insecurity and organised crime issues persist, and Donald Trump’s election could strain US-Mexico relations, especially regarding the USMCA renegotiation.

Peru:

In Peru, tensions between President Dina Boluarte and Congress are escalating, with talk of potential impeachment by mid-2025, though its success is unlikely. Congress has been attempting to assert control over the judiciary and electoral authorities, while rule of law has been weakening in recent years, with reforms favouring organised crime and judicial rulings disregarding international obligations. Public discontent is mounting, reflected in widespread protests and strikes.

Latin America’s place in the world

Latin America stands at a key juncture. The diminishing influence of the West should offer the developing world’s most democratic region a bigger opportunity to shine on the world stage. Its attractions include a strong commitment to peaceful co-existence, respect for territorial integrity, human rights, free elections in most countries, the environment, and the rights of women and minorities.

It has an abundance of natural resources, many of which are critical to the energy transition, and has ambitions to reorder the world’s security, diplomatic and economic architecture to accommodate new powers and enjoys good relationships across Africa, the Middle East and Asia. Most of its nations have credible institutions, and the region enjoys substantial global soft power.

Yet Latin America has so far failed to turn these natural advantages into clear and decisive diplomatic or economic leadership amongst the new “middle powers” or emerging nations in fora such as the Group of 20 or the BRICS bloc. Too often, sharp political divisions between Latin American nations and the absence of a strong and effective regional coordinating body have meant that the region punches well below its weight on the global stage.

United Latin American foreign policy?

Indeed, there is a question over whether it is possible to speak of a “Latin American foreign policy” at all, given the divergences between the region’s powers over fundamental issues. Mexico’s economic ties to the US and Canada means it regularly turns its head north, and Central America also enjoys trade privileges with the US. On the other hand, South America’s largest trading partner is China.

The coming years will be decisive for the region’s ability to influence global events. Donald Trump’s return to the US presidency offers Latin America the chance of working with Washington to supply critical minerals, boost hemispheric trade and bring production back from China closer to the US market, allowing companies to source from allies of the US. But Trump’s threat to impose a 25% tariff on all Mexican and Canadian imports, his preference for a transactional foreign policy, and his strong distrust of China, will increase pressure on the region to pick sides.

Latin America is most comfortable adopting a neutral position in times of great power conflict and will probably try to do so again. Its need for external trade and investment would argue for such an approach. Yet in an era of sharpening ideological polarisation, it is unclear whether such a strategy is sustainable over the medium to long term.

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