Global Risk Indexes (14-01-2025)

Economic Reforms, Geopolitical Tensions, and Governance Challenges Define the Americas' Strategic Landscape

The Americas' geopolitical trajectory remains shaped by evolving economic policies, resource competition, and entrenched governance challenges. Regional actors are increasingly navigating a multipolar order where domestic vulnerabilities intersect with global power rivalries.

Mexico's economic agenda under President Claudia Sheinbaum reflects a shift towards proactive industrial policy and strategic trade alignments. The new plan targets reduced reliance on Chinese imports, aiming to bolster local industries and capitalize on U.S.-Mexico-Canada Agreement (USMCA) opportunities. This pivot aligns with Sheinbaum's broader vision of making Mexico a leading global economy by 2030, but it also risks potential retaliatory actions from China, complicating Mexico's position in global supply chains. The plan's focus on sustainable energy and manufacturing highlights Mexico's aspirations to balance economic growth with environmental commitments.

Argentina's cautious economic optimism highlights the delicate balance between fiscal discipline and social equity. Lower inflation and a rally in bonds and stocks reflect President Javier Milei's pro-market reforms. However, structural challenges, including poverty, depleted reserves, and reliance on IMF support, temper this optimism. Investors are betting on reduced devaluation and interest rate cuts, but sustained growth will depend on Milei's ability to navigate domestic opposition and implement comprehensive reforms.

Brazil faces multifaceted challenges, from inflationary pressures to labor controversies involving major multinational firms. The $4 million settlement between JBS and the U.S. Department of Labor over child labor violations underscores the governance and reputational challenges facing Brazilian corporations. Meanwhile, Brazil's legislative push for renewable energy projects positions the nation as a potential leader in sustainable energy, though fiscal and technical barriers remain significant obstacles to realizing this ambition.

Venezuela's political turmoil and international isolation deepen as opposition leader Leopoldo Lopez becomes the latest target of Maduro's crackdown. The arrest warrant and Interpol notice against Lopez exemplify the regime's tightening grip on dissent. These developments, coupled with persistent economic instability and migration crises, underscore the urgency for multilateral engagement to address Venezuela's humanitarian and political challenges.

Strategic resource competition continues to underscore the Americas' pivotal role in global geopolitics. The U.S. lobbying success in Greenland and Tether's relocation to El Salvador illustrate the region's strategic importance in critical minerals and digital finance. However, these developments also highlight systemic vulnerabilities, including regulatory gaps and dependency on external powers for economic stability.

Short-term risks are driven by political polarization in Venezuela, economic uncertainties in Argentina and Brazil, and geopolitical tensions involving Mexico and the U.S. Long-term stability demands comprehensive reforms, strengthened governance, and strategic alignments that leverage the region's resource potential and demographic strengths.

Geopolitical Risk Assessment for the Americas
(14-01-2025)

The Americas face a complex interplay of governance failures, economic recalibrations, and intensifying geopolitical rivalries. While efforts at economic innovation and international collaboration show promise, systemic challenges continue to exacerbate vulnerabilities across the region.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

Previous Briefings

• Economic Reforms, Geopolitical Tensions, and Governance Challenges Define the Americas' Strategic Landscape - (14-01-2025)
• Strategic Resource Competition and Governance Failures Underscore the Americas' Geopolitical Volatility - (13-01-2025)
• Systemic Governance Crises and Strategic Rivalries Define the Americas' Tumultuous Path Forward - (12-01-2025)
• Economic Volatility, Security Crises, and U.S. Expansionism Define the Americas' Strategic Reality - (11-01-2025)
• From Rare Earth Rivalries to Security Risks: The Americas Navigate a Complex Geopolitical Landscape - (10-01-2025)
• Geopolitical Shocks, Resource Dependencies, and Political Tensions Reshape the Americas' Strategic Trajectory - (09-01-2025)
• Resource Dependencies, Diplomatic Tensions, and Ideological Fractures Threaten Stability Across the Americas - (08-01-2025)
• Political Transitions, Security Crises, and Economic Challenges Shape the Americas' Geopolitical Dynamics - (07-01-2025)

See all previous briefings