Global Risk Indexes (22-12-2024)

Global 89 (0 —)
MENA 99 ( —)
APAC 91 ( —)
Europe 91 (+1 ▲)
Africa 83 (-1 ▼)
AMERs 79 (+2 ▲)
Markets 93 (+2 ▲)
Mateo Fernandez, Americas region analyst at Worldwise Analytica

Mateo Fernandez

Unraveling the Threads of Americas' Geopolitics: Insight, Precision, Vision

Political Instability, Trade Wars, and Fiscal Strains Define a Tumultuous Week in the Americas

The Americas grappled with intensifying political, economic, and governance challenges over the past week. Key developments include political unrest in Canada, fiscal instability in Brazil and Argentina, and escalating trade tensions under the incoming U.S. administration. These dynamics underscore the fragility of the region's geopolitical and economic landscape.

In Canada, Prime Minister Justin Trudeau faces a mounting leadership crisis. A motion of no-confidence by the New Democratic Party and internal Liberal Party discord threaten Trudeau's minority government. Concurrently, Canada prepares for high-stakes negotiations with President-elect Donald Trump's administration, which has signaled a hardline stance with proposed 25% tariffs on imports. The combination of political and trade pressures undermines Canada's ability to project stability and resilience in the face of external threats.

Brazil's fiscal challenges have deepened despite legislative action. Amendments to President Luiz In'cio Lula da Silva's fiscal package significantly weakened its savings potential, exacerbating investor skepticism. The Brazilian real hit historic lows, and market volatility persists, driven by concerns over Lula's criticism of monetary policy and delayed economic reforms. These fiscal struggles further highlight the difficulty of stabilizing Brazil's economic trajectory amidst political fragmentation.

Mexico remains at the center of U.S. trade and security disputes. A USMCA panel ruling against Mexico's restrictions on genetically modified corn exports has heightened trade tensions, aligning with President-elect Trump's broader protectionist agenda. Simultaneously, the deportation of Osiel Cardenas signals enhanced U.S.-Mexico security cooperation, though the enduring influence of organized crime underscores the scale of ongoing challenges.

Argentina's economic strain continues as inflation and poverty levels remain alarmingly high. Despite marginal GDP growth, austerity measures under President Javier Milei have exacerbated social inequality and public discontent. Milei's libertarian approach faces significant opposition, with questions about the sustainability of his policies growing louder amidst persistent fiscal and governance constraints.

El Salvador and Ecuador exemplify divergent approaches to economic reform. President Nayib Bukele's push to repeal the mining ban and accelerate Bitcoin adoption underscores his commitment to unconventional strategies, even as critics raise environmental and fiscal concerns. Meanwhile, Ecuador's IMF-supported reforms have bolstered confidence, demonstrating the potential for multilateral cooperation to stabilize fragile economies.

Short-term risks across the Americas include heightened political instability in Canada and Brazil, escalating trade tensions under U.S. protectionism, and economic fragility in Argentina. Long-term resilience will depend on effective governance, innovative economic strategies, and enhanced regional cooperation to navigate a fragmented global landscape.

Geopolitical Risk Assessment for the Americas
(22-12-2024)

Geopolitical and economic risks across the Americas remain critically elevated. The region faces intersecting challenges from political instability, trade disputes, fiscal pressures, and governance fragility. Canada's leadership crisis, Brazil's diluted fiscal reforms, and escalating U.S. trade protectionism exert significant pressure on regional cohesion and economic stability. Meanwhile, emerging policy shifts in El Salvador and Ecuador illustrate the ongoing experimentation with unconventional economic models amidst a backdrop of structural vulnerabilities.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

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