Written by José Alonso Aquino, Lawyer
A wave of uncertainty continues to ripple through the global economy, driven by the ongoing and erratic evolution of U.S. tariff policy under President Donald Trump. Despite previous suspensions of proposed tariffs, the looming August 1st implementation date signals a definitive shift from established international trade norms. This article examines the profound implications of these new, unilateral, and country-based tariffs – a stark departure from the WTO’s non-discrimination principles – specifically on the major economies of the Latin American region. We will explore how Brazil, Colombia, Peru, Chile, Argentina, and Mexico are poised to be affected by these changes, and what this means for their trade relations with the U.S.
Context and Legal Framework
The general rule in international trade between U.S. and countries in the Latam region has always been the World Trade Organisation’s (WTO) most-favoured nation (MFN) principle of non-discrimination which ensured equal treatment: same tariff rate applies to a given product from all nations, unless a formal free trade agreement (FTA) provides preferential terms.
But as of 2025, the U.S. formally abandoned this rules-based approach in favor of a protectionist policy aiming to solve the country’s persistent trade deficit. Under this approach, unilateral tariffs apply broadly, abandoning FTA commitments. Furthermore, this policy poses country-based tariffs rather than product-based as the general rule, effectively creating a hierarchy of trading partners and dismantling the WTO principle of non-discrimination.
This blatant breach of the WTO’s regime has gone unpunished due to the fact that since 2019, the U.S. paralysed its dispute settlement system by refusing to appoint members to its Appellate Body.
As for the Latam region, it is especially vulnerable to these changes. Of the 20 countries with an FTA with the U.S., 12 are in this region (only Canada and Mexico received partial exemptions under the United States-Mexico-Canada Agreement (USMCA)). We will now break down what the tariffs mean for some of the key players in the region.
Brazil
Brazil remains a central player on the global stage due to its size, natural resources, and diversified industrial base. The country is a leading exporter of agricultural products and continues to benefit from its role as a major producer of oil and natural gas, as well as a key player in the manufacturing sector.
To date, U.S. has stated that imports of Brazilian origin will be subject to a 50% tariff rate upon the implementation of its new policy. Furthermore, the announcement of the construction of a Bioceanic Railway connecting Brazil with the Chancay Megaport, has shown the Brazilian government willingness of strengthening its economic ties with China, to the detriment of its relationship with the U.S.
Key Points:
- 50% tariff rate announced to apply to Brazil.
- 50% tariff rate on copper would not drastically change trade relations between Brazil and U.S.
- The strengthening of Brazil-China relations could cause the U.S. to maintain its current terms.
Colombia
Key sectors such as oil, mining, agriculture, and services have fuelled Colombia’s economic expansion. The country’s oil and coal reserves continue to make it a key energy player, while its agricultural sector, especially coffee, flowers, and tropical fruits, remains a major export engine. Furthermore, Colombia is seeing a boom in its technology and services sectors.
To date, Colombia would be subject to a 10% tariff rate upon the implementation of the new tariff policy. Although copper is not within its major exports, the Colombian government’s decision of joining China’s Belt and Road initiative could cause the U.S. to reassess their terms.
Key Points:
- 10% tariff rate announced to apply to Colombia.
- 50% tariff rate on copper would not drastically change trade relations between Colombia and U.S.
- The strengthening of Colombia-China relations could cause the U.S. to reassess its terms.
Peru
Peru’s economy remains driven by its rich natural resources and strong export sector. As a leading global producer of copper, gold, and silver, its mining industry supports export growth, alongside emerging opportunities in agriculture and tourism.
To date, Peru would be subject to a 10% tariff rate upon the implementation of the new tariff policy, but with Chancay megaport’s launch and the Bioceanic Railway’s announcement, such tariff may change due the strengthening of the ties between the Peruvian and Chinese economies. Furthermore, the U.S. administration have announced that a 50% tariff rate would be applied to copper, which can seriously damage trade ties between Peru and the U.S.
Key Points:
- 10% tariff rate announced to apply to Peru.
- 50% tariff rate on copper would seriously damage trade relations between Peru and U.S.
- The strengthening of Peru-China relations could cause the U.S. to reassess its terms.
Chile
Chile remains a prime destination for investment, particularly in mining, renewable energy, and technology. Chile’s reliance on continued strong demand for copper and lithium, support its growth as an emerging market for electric vehicles and renewable energy industries.
To date, Chile would be subject to a 10% tariff rate upon the implementation of the new tariff policy. Although the Chilean government have not signal the strengthening of ties with the Chinese economy, the implementation of the proposed tariff rate for copper would make it reevaluate the viability of the U.S. as a trading partner.
Key Points:
- 10% tariff rate announced to apply to Chile.
- 50% tariff rate on copper would seriously damage trade relations between Chile and U.S.
- Chilean government have not signal strengthening of ties with the Chinese economy.
Argentina
With the Argentine government’s focus on attracting foreign investment, Argentina’s mining, oil and gas and METS industries remain a promising area for investors looking to capitalise on the country’s rich natural resources and emerging infrastructure.
To date, Argentina would be subject to a 10% tariff rate upon the implementation of the new tariff policy. Argentinian government may opt for strategic hedging by maintaining their ties with China, without going all-in on one side. Although copper is not a key export of the country, similar measures applied to lithium or crude oil could make the Argentinian government reconsider its approach.
Key Points:
- 10% tariff rate announced to apply to Argentina.
- 50% tariff rate on copper would not drastically change trade relations between Argentina and U.S.
- Argentinian government have not signal strengthening of ties with the Chinese economy.
Mexico
Mexico continues to be a key player in global supply chains offering significant opportunities for foreign investors in industries such as automotive, aerospace, electronics, and consumer goods. The country’s cost-effective labour force, proximity to the U.S. market, and increasingly modern infrastructure continue to drive its competitive advantage in the manufacture sector.
To date, U.S. has stated that imports of Mexican origin will be subject to a 30% tariff rate upon the implementation of its new policy, with a few caveats due to the USMCA’s scope. Mexican government seems to be reinforcing its alignment with U.S. policies and stringent compliance to maintain tariff preferences.
Key Points:
- 30% tariff rate announced to apply to Mexico.
- 50% tariff rate on copper would not drastically change trade relations between Mexico and U.S.
- The strengthening of Mexico-U.S. relations, reduce risk of tariff uncertainty.
Conclusion
The implementation of the U.S.’s new tariff policy presents a significant challenge, driving firms to seek strategic alternatives for their trade flows. In this environment, where non-discriminatory tariffs are absent and supply chain transparency is limited, businesses will increasingly consider rerouting goods through lower-tariff jurisdictions. For the Latam region specifically, navigating these changes effectively will hinge on identifying optimal central hubs and designing sophisticated cross-border tax planning schemes that account for international and domestic regulations, as well as the unique political landscape of potential host countries.
Navigating this evolving and uncertain trade landscape requires specialised legal and commercial expertise. Harris Gomez Group, with our nearly three decades of presence and deep understanding of both the Latin American and Western markets, is uniquely positioned to assist companies looking to do business in the region.
Harris Gomez Group METS Lawyers ® opened its doors in 1997 as an Australian legal and commercial firm. In 2001, we expanded our practice to the international market with the establishment of our office in Santiago, Chile. This international expansion meant that as an English speaking law firm we could provide an essential bridge for Australian companies with interests and activities in Latin America, and to provide legal advice in Chile, Peru and the rest of Latin America. In opening this office, HGG became the first Australian law firm with an office in Latin America.
As Legal and Commercial Advisors, we partner with innovative businesses in resources, technology and sustainability by providing strategy, legal and corporate services. Our goal is to see innovative businesses establish and thrive in Latin America and Australia. We are proud members of Austmine and the Australia Latin American Business Council.
To better understand how we can support your management team in the Region, please contact contact@hgomezgroup.com
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. It does not create a solicitor-client relationship, and readers should seek independent legal advice for their specific circumstances. Harris Gomez Group accepts no liability for reliance on this content.