Latin America and the Caribbean must deepen their regional integration and strengthen trade ties with partners such as China, the European Union (EU), and India in response to changes in U.S. tariff policy. This is recommended in the latest annual report by the Economic Commission for Latin America and the Caribbean (ECLAC) on regional trade behavior, presented this Wednesday. Diversifying trade with alternative actors, which also include the Association of Southeast Asian Nations (ASEAN), the Gulf Cooperation Council, and the African Continental Free Trade Area, 'opens opportunities' for the region, as well as for regional integration in areas such as infrastructure, trade facilitation, and regulatory convergence. According to the report 'International Trade Prospects for Latin America and the Caribbean, 2025', the North American power has pushed various tariff increases since February of this year, establishing an average effective rate of around 10% for countries in the region, seven percentage points below its average tariff with respect to the rest of the world. ECLAC warns that 'there is evidence that the uncertainty generated by changes in U.S. trade policy is affecting foreign direct investment (FDI) flows to the region,' especially in sectors with a 'marked orientation towards exporting to that market.' In the first half of 2025, announcements of FDI projects in the region reached $31.374 billion, 53% less than in the same period of 2024 and 37% below the average from 2015 to 2024. This context, the report emphasizes, opens up for countries in the region 'some opportunities to expand their market shares,' so it is recommended to 'avoid adopting measures that could increase uncertainty in a context marked by major disturbances and geopolitical tensions in world trade.' The highest average tariff is faced by Brazil (33%), followed by Uruguay (20%) and Nicaragua (18%), the document states. Mexico, for its part, faces an average effective tariff of 8%, which is explained because most of its exports enter duty-free, either by adhering to the Agreement between Mexico, the United States, and Canada (USMCA) or because they are not included in the increases. In general, the study highlights, the Latin American and Caribbean region faces lower tariffs in the United States compared to several of that country's main trading partners, especially in Asia, 'a situation that opens up opportunities for trade diversion in favor of the region's exports, in sectors such as clothing, medical devices, and agribusiness.' The report indicates that the value of the region's goods exports from Latin America and the Caribbean will grow by 5% in 2025, a similar increase to that recorded in 2024 (4.5%). The projected expansion is explained by a 4% increase in the volume exported and a 1% rise in prices. Among the region's main trading partners, the largest increase in 2025 in terms of value is expected to occur in exports to China (7%), associated mainly with the growth in meat and soybean sales and with higher prices for minerals such as copper. Shipments to the European Union would grow by 6% and to the United States by 5%. In October of last year, ECLAC raised its regional growth forecast for this year to 2.4%, the third improvement the agency has made since the U.S. president, Donald Trump, came to power in January and initiated a trade war against most of his trading partners, including Latin America. For 2026, ECLAC maintains its regional growth estimate at 2.3%.
