Mexico postponed the U.S. tariff hike for 90 days; inflation returned to target (3.55%) and GDP avoided recession (+0.7%), as anti-gentrification protests grew.
Argentina posted a strong rebound (+7.6% in Q2), secured an IMF disbursement, and began steps to regain Visa Waiver status amid social tensions over austerity.
Central America & the Caribbean: Guatemala boosted reserves via a eurobond and saw a ratings upgrade; El Salvador deepened economic diplomacy in China; Honduras gained more FX from coffee, remittances, and services; Costa Rica increased exports and attracted millionaires; the Dominican Republic consolidated free-zone leadership.
Andean region: Peru considered unlocking US$6 billion in mining and expects a moderate impact from the U.S. copper tariff; it also awarded a national video-surveillance system; Panama activated an agenda with Mercosur and investments.
Brazil saw debate over U.S. tariffs, with accusations of interference and a leak probe; highlights included micro-grants on greenwashing/energy transition and the start of reimbursements to INSS fraud victims.
Mexico
Mexico reaches agreement to postpone tariffs for 90 days
July was a key month for Mexico from a news perspective. Economic developments dominated the spotlight, particularly amid the deterioration of the country’s trade relationship with the United States. Tariff announcements by President Donald Trump generated unease at a time when it was believed Mexico was not among the targets of his trade policy.
In mid-July, the U.S. government announced the imposition of a 20.91% tariff on Mexican tomatoes. This tariff is significant because tomatoes are Mexico’s second-largest agri-food export product by volume, only behind avocados. Furthermore, 99% of the tomatoes exported from Mexico in 2024 (USD 3.34 billion) were shipped to the United States.
This was not the only tariff announcement against Mexico. The U.S. government stated that its largest trading partner would face tariffs of up to 30% on all goods outside the USMCA as of August 1, citing a lack of satisfactory measures to address illegal migration and drug trafficking across the shared border.
However, one day before the U.S. tariffs were set to take effect, Mexican President Claudia Sheinbaum Pardo announced during her daily press conference that, following a phone call with U.S. President Donald Trump, it was agreed to postpone for another 90 days the start of the duties on goods from Mexico. The information was confirmed by Trump on Truth Social.
On the economic indicators front, inflation figures for the first half of the month stood out, slowing for the third consecutive time to 3.55% year-on-year. The figure was better than expected and returned to the Bank of Mexico’s target range of 3% +/- one percentage point, potentially paving the way for an interest rate cut at the central bank’s August 7 meeting.
At the end of the month, the first estimate of Mexico’s GDP growth for the second quarter was released. Data showed a 0.7% increase, higher than the 0.3% expected by analysts. With its second consecutive quarter of growth, the country avoided a technical recession, although experts still see signs of weakness. Final figures will be released next month.
Domestically, public debate was marked by social polarization over gentrification. Three marches took place in Mexico City to protest rising living costs and displacement caused by this phenomenon. The Mexico City government announced a public consultation to discuss how to address gentrification in the nation’s capital.
In sports, footballer Javier Chicharito Hernández — former player for Real Madrid and Manchester United, and currently with one of Mexico’s most prominent teams, Chivas de Guadalajara — sparked controversy with sexist remarks on social media. Public reaction centered on the need for responsible social media use by public figures.
ARGENTINA
On the economic front, Argentina registered a 7.6% growth in the second quarter of 2025, the highest in years, driven by retail consumption, construction, and industrial sectors. The International Monetary Fund completed the first review of its program with Argentina and approved a disbursement of USD 2 billion, acknowledging fiscal adjustment, a more flexible exchange rate, and inflation control, although it warned about insufficient reserves. Despite the macroeconomic recovery, purchasing power remains eroded, and inequalities are widening: lower-income groups struggle with high prices for basic services, while upper-income groups are increasing their travel, foreign purchases, and dollar savings.
In the agro-industrial and export sectors, export settlements in July rose 57% year-on-year to USD 4.102 billion, partly due to early sales ahead of a tax increase that month. Additionally, hydrocarbon exports grew 36% in the first half of the year, surpassing USD 3.7 billion and projecting to exceed USD 6 billion by year-end, particularly from developments in Vaca Muerta.
On the political side, President Javier Milei announced the permanent reduction of export duties on agricultural products during the Buenos Aires Rural Exhibition—a move welcomed by the rural sector and aligned with his agenda of liberalization and downsizing the State. Meanwhile, internal political tension is mounting: cuts to social programs, layoffs of public employees, and clashes with the opposition—all of which deepen polarization and spark criticism over the social impact of fiscal austerity.
Regarding the U.S. Visa Waiver Program (VWP), in July the process formally began for Argentina to regain this status, following an agreement between U.S. Secretary of Homeland Security Kristi Noem and Argentine authorities including Milei and Patricia Bullrich. Argentina was part of the VWP between 1996 and 2002, and the goal is to allow Argentine citizens to enter the U.S. without a visa for tourism or business for up to 90 days using ESTA. Final approval could take one to three years, as Argentina must meet requirements such as a low visa refusal rate and compliance with migration security standards.
Guatemala
Eurobond Issuance Boosts International Reserves to US$29 Billion
In July 2025, Guatemala carried out one of the most significant financial operations of the year with the issuance of a US$1.5 billion eurobond, which raised its international monetary reserves (IMR) to US$29.014 billion, reflecting an 18.8% increase since January, according to the Bank of Guatemala. This historic level which could reach US$32 billion by 2026 positions the country as a regional leader in monetary coverage, equivalent to 10 months of imports. The operation strengthens Guatemala’s fiscal capacity and financial stability amid a global environment marked by high interest rates, inflation, and currency volatility.
S&P Global Ratings supported this macroeconomic improvement by upgrading Guatemala’s sovereign credit rating to BB+ with a stable outlook, moving the country closer to investment grade. Meanwhile, the International Monetary Fund (IMF), in its Article IV review, highlighted the resilience of Guatemala’s economy in the face of external and internal risks. In 2024, reserves closed at US$27.1 billion, boosted this year by the eurobond issuance, while family remittances remained strong, representing 19% of GDP, and the current account surplus reached 2.9%. This financial and fiscal environment makes Guatemala an attractive destination for foreign direct investment, particularly in strategic sectors such as energy, manufacturing, free trade zones, and shared services.
Sources:
- International Monetary Fund
- Ministry of Finance of Guatemala
- Prensa Libre
El Salvador:
El Salvador Strengthens Economic Diplomacy with China and Presents Investment Opportunities in Chongqing
In July 2025, El Salvador strengthened its foreign direct investment (FDI) strategy by hosting the business forum “El Salvador: A Reliable Partner for Investment and Business” in Chongqing, China, one of the country’s most important industrial hubs. Organized by the Embassy of El Salvador in China and supported by the Chongqing Foreign Affairs Office, the event brought together over 50 Chinese companies from key sectors such as automotive, manufacturing, technology, and coffee. This initiative is part of the government’s active economic diplomacy led by President Nayib Bukele, aimed at positioning El Salvador as a secure, competitive, and globally connected investment destination.
During the forum, Salvadoran officials highlighted progress in creating a pro business environment, noting the steady growth of FDI, preferential access to more than 40 international markets (including DR-CAFTA), and a favorable regulatory framework. They also emphasized the country’s internal transformation, which has made it the safest nation in the Western Hemisphere, significantly boosting investor confidence. Priority sectors include automotive, advanced manufacturing, technology, digital services, logistics, and value added agribusiness all supported by a legal framework that offers tax incentives, streamlined procedures, and legal certainty, designed to maximize project profitability and operational efficiency.
Sources:
- Ministry of Foreign Affairs of El Salvador
- Diary the footprint
Honduras
The Honduran economy will receive almost $10 billion in 2025
During the first half of 2025, Honduras channeled US$9.87 billion in foreign currency into the exchange market, reflecting a year-over-year increase of US$852.8 million, according to the Central Bank of Honduras (BCH). This growth was primarily driven by three key factors: a 95.3% surge in coffee exports, totaling US$1.47 billion; a 25.3% rise in remittance inflows, reaching US$5.8 billion; and a 32.8% increase in service exports, which brought in US$1.03 billion.
These higher foreign exchange inflows strengthened the BCH’s capacity to allocate resources to productive sectors. The average foreign exchange auction allocation rate rose to 69.9% by June 30, significantly higher than the 36.3% recorded during the same period in 2024. This increase in liquidity distribution has supported currency stability, improved access to capital for businesses, and reinforced domestic consumption amid a sustained economic recovery.
Sources:
- Prensa Latina
Costa Rica
Costa Rica: goods exports grow 14% in the first half of the year
During the first half of 2025, Costa Rica’s exports grew by 14%, representing an increase of USD $1.313 billion compared to the same period in 2024, reaching a total of USD $11.012 billion.
According to data published by Costa Rica’s Foreign Trade Promotion Agency (PROCOMER), June marked a historic milestone with exports surpassing USD $2 billion for the first time since records began.
The precision and medical equipment sector continues to lead the country’s goods exports in both share and growth, accounting for 47% of total exports and a 26% increase. The agricultural sector, which ranks second with a 17% share, posted a 4% rise—mainly due to higher international prices for agricultural products, despite a slight drop in the volume of goods shipped.
Source:
- Revista Summa
Costa Rica attracts the world’s millionaires and leads in Latin America
Costa Rica has established itself as one of Central America’s top destinations for millionaires relocating in 2025, according to the Henley Private Wealth Migration Report 2025, a global study by Henley & Partners. The report projects that 350 millionaires will migrate to Costa Rica this year.
These figures position the country as a key recipient of wealth in a global context where 142,000 high-net-worth individuals are on the move. The main countries of origin for this mobile capital are the United Kingdom, China, India, and Russia—driven by tax reforms, a search for stability, and shifting geopolitical dynamics.
Source:
- La Nación
Dominican Republic
Free Zones Sector Leads Exports in the Dominican Republic
In the first half of 2025, Dominican free zones strengthened their leadership in the national economy, accounting for 62% of total exports, with sales reaching US $4.28 billion including US $771.96 million in June alone (a 2.8% increase compared to June 2024). The top exported goods were medical and pharmaceutical products (33.7%), followed by electronics, tobacco, and textiles. The United States received over 72% of the total export volume. The sector’s performance highlights its resilience in global markets and the success of public policies focused on competitiveness and investment.
Source:
- Revista Vida y Éxito
Panama
Panama Drives Investment Projects with Mercosur Nations
In his most recent press conference, President José Raúl Mulino announced a business mission that will travel to Brazil on August 28 with the goal of promoting Panamanian exports in that key market. The visit, agreed upon during the Mercosur Summit in Buenos Aires, follows Panama’s recent accession as an associate member of the regional bloc. The delegation will include representatives from key sectors such as logistics, trade, banking, and agribusiness. The president also revealed that Brazilian President Luiz Inácio Lula da Silva will visit Panama in January 2026 as the keynote speaker at the Latin America Economic Forum, organized annually by the Development Bank of Latin America (CAF). Mulino also shared progress in cooperation with Argentina, including plans for a meat processing plant and a dairy company focused on exports, as well as ongoing efforts for Panama to join the OECD, with the aim of strengthening its international positioning and attracting investment.
Source:
- Prensa Latina
Peru
Peru projects growth for the future
Government evaluates approving mining projects worth USD 6 billion. President Dina Boluarte reported that her government is evaluating giving the green light to 134 mining exploration and exploitation projects worth an estimated USD 6 billion. The formal small-scale mining sector is expected to generate more than USD 5 billion in annual sales, and nearly USD 4.7 billion in formal projects are expected to begin construction before 2026. These announcements were made in the context of a temporary truce by informal miners, who had blocked a key route for copper transport in the Cusco region, demanding an extension of the formalization program (REINFO) deadlines. In this regard, the Executive announced that it seeks to include some 31,000 informal miners in a formalization process by the end of the year and to launch a private mining fund to improve access to financing for small formal miners.
Source:
- https://www.reuters.com/world/americas/peru-mulls-green-light-6-billion-mining-projects-2025-07-28/?
Likewise, the Central Reserve Bank of Peru (BCRP) maintained its GDP growth forecast at 3.1% for the year, but warned of possible adverse effects following US President Donald Trump’s announcement of 50% tariffs on semi-finished copper imports, effective August 1. Although only about 5% of Peruvian copper exports go to the US, the BCRP considered that the aggregate impact on the economy will be moderate, noting that high copper prices and the limited capacity of the US to substitute imports could lead to a limited impact on national accounts and tax revenues.
Source:
- https://rpp.pe/economia/economia/bcr-preve-impacto-moderado-por-arancel-de-ee-uu-al-cobre-peruano-que-pasara-con-las-empresas-exportadoras-noticia-1645927?
On the other hand, the technology sector also made headlines this month. Spanish company Amper won a contract worth 37.07 million soles (around 9 million euros) with the Ministry of the Interior to deploy a private cloud-based Intelligent Video Surveillance System. The project—part of the “Perú Seguro 2025” initiative—will integrate nearly 3,000 cameras in 70 municipalities, using artificial intelligence to strengthen the operational capacity of the National Police. The award coincides with a capital increase of 77.1 million euros as part of its 2023-2026 strategic plan. This development comes on top of others such as the technological and mining cooperation agreement between Peru and India, and the celebration of eCommerce Day Peru 2025, which took place between July 23 and 25.
Source:
- https://cincodias.elpais.com/companias/2025-07-07/amper-impulsa-su-macroampliacion-de-capital-con-un-contrato-de-seguridad-en-peru-de-nueve-millones.html?
- https://www.gob.pe/institucion/mininter/noticias/1214902-nuevo-sistema-de-videovigilancia-inteligente-interconectara-mas-de-3-mil-camaras-de-la-pnp-y-gobiernos-locales
Finally, the government noted a legislative initiative by Congress (Bill No. 9645) that sought to modify the ISC tax base to only include real money bets, reducing expected revenue by 90-95%. The Executive warned that annual revenue would fall from S/289 million to between S/14 and 28 million, which would compromise tax revenue and the health regulation of online gambling.
Source:
- https://gestion.pe/economia/apuestas-online-ejecutivo-observo-proyecto-del-congreso-pues-reduce-el-pago-del-isc-en-90-noticia/?
Brazil
U.S. tariff hike, greenwashing micro-grants, and the start of INSS reimbursements
The tariff package announced by the United States against Brazilian goods set the tone of the month: an escalation from 10% to 50% at the start of August sparked criticism of political interference and raised concerns about how large tech companies may have shaped the agenda. In Brazil, the debate also gained a domestic angle after the Attorney General’s Office asked to investigate a potential market leak tied to the tariff news.
On the socio-environmental front, the results of a micro-grant program focused on “greenwashing vs. energy transition” were released. Three reporting proposals were selected and funded, in a year when the energy-transition conversation is accelerating ahead of COP30 and demands for stronger corporate accountability are growing across the Global South.
Social policy also featured prominently: the government started reimbursing retirees and pensioners who suffered unauthorized deductions from INSS benefits between 2020 and 2025. People can enroll via the Meu INSS app/website, the 135 hotline, or at Correios branches. With extraordinary budget resources earmarked, payments began in late July; by mid-August, over one billion reais had been returned to millions of beneficiaries.
Source:
- https://apublica.org/2025/07/tarifaco-de-trump-contra-brasil-e-pura-interferencia-politica/
- https://apublica.org/2025/07/ameaca-de-trump-de-investigar-brasil-atende-a-pressao-de-big-techs/
- https://apublica.org/2025/07/eduardo-bolsonaro-e-suspeito-de-vazar-informacoes-sobre-tarifa-de-trump-ao-mercado-financeiro/
- https://apublica.org/2025/07/conheca-os-vencedores-das-microbolsas-greenwashing-x-transicao-energetica/
- https://apublica.org/nota/trama-golpista-bolsonaro-de-tornozeleira-e-vitimas-de-fraudes-no-inss-ressarcidas/
The post July in Latin America: U.S. Tariffs, Economic Rebounds, and Social Tensions Across the Region appeared first on Sherlock Communications.
