Trump Revives the Monroe Doctrine: Implications for Investors and Markets in the Western Hemisphere

The term "Monroe Doctrine," long considered a historical relic, is once again gaining traction in the political lexicon of the United States. In 2025, Washington's official strategic rhetoric designates the Western Hemisphere as a priority area of interest, with a focus on security, migration, drug trafficking, control of maritime routes, and competition with external players for infrastructure, resources, and supply chains. For global investors, this is not merely an academic debate about 19th-century diplomacy, but a practical factor in reassessing country risks, sanction scenarios, trade conditions, and project sustainability in Latin America and the Caribbean.

The Monroe Doctrine and Its "New Version" Under Trump: History, Logic, and Investment Consequences

1) Why the Monroe Doctrine is Back on the Agenda

The return to the Monroe Doctrine essentially signifies a revival of the logic of "spheres of influence," albeit in a modern context. At the heart of this discussion are four interconnected themes:

• Geopolitics of the Western Hemisphere: U.S. competition with external power centers for ports, telecom infrastructure, energy, and logistics.
• Nearshoring and Supply Chains: relocating production closer to the U.S. market, with growing significance for Mexico, Central America, the Caribbean, and the northern part of South America.
• Security: migration flows, drug trafficking, maritime routes, and combating transnational criminal networks.
• Sanctions and Access to Capital: an increased likelihood of "targeted" restrictions and a re-evaluation of access regimes to dollar liquidity and U.S. markets.

For investors, this implies that risk premiums across various jurisdictions may shift more rapidly than macroeconomic indicators, and political decisions could have a stronger impact on funding costs and currency trajectories.

2) The Roots of 1823: What Was Initially Stated

The original Monroe Doctrine was articulated in President James Monroe's message to Congress on December 2, 1823. In its initial logic, it served as a signal to European powers: further colonization and intervention in the affairs of American states would be perceived as a threat to U.S. interests and security. The U.S., however, expressed its unwillingness to interfere in European conflicts and recognized existing European colonies in the Americas without claiming any immediate changes.

It is essential to understand that the Monroe Doctrine started as a warning against external expansion in the Western Hemisphere, rather than as a formal "license" for U.S. intervention in neighboring countries. Nonetheless, subsequent history demonstrated how political formulations evolve in line with shifts in power balance.

3) Three Principles of the Monroe Doctrine: Brief and to the Point

Practically, the Monroe Doctrine boils down to three foundational principles of U.S. foreign policy in the Western Hemisphere:

1. Division of Spheres of Influence: Europe and the Americas are viewed as distinct political spaces.
2. Non-Colonization: New colonies by European powers in the Americas are unacceptable.
3. Non-Intervention: External powers must not interfere in the affairs of independent states in the Americas.

From a market perspective, the key takeaway is that if these principles are "activated" in contemporary U.S. policy, the likelihood of protectionist measures, control over strategic assets, and heightened scrutiny of transactions in infrastructure, energy, mining, and telecommunications may increase.

4) Evolution: Roosevelt's Corollary and a Shift to a "Police" Logic

A significant turning point was the early 20th-century interpretation often referred to as Roosevelt’s Corollary (1904). While the Monroe Doctrine primarily served as a "barrier" against European colonization, the corollary introduced the thesis that the U.S. had the right to intervene as a "last resort" to prevent external interference and "chronic instability" often associated with debt crises and threats of coercive debt recovery by European creditors.

From an investment perspective, this historical parallel is noteworthy: themes of debt, default, creditors, and political pressure are again becoming part of the discussion about regional stability—not only in terms of sovereign bonds but also in concessions, off-take agreements, project financing, and port control.

5) The Cold War and 1962: The Doctrine as a "Red Line"

During the Cold War, the Monroe Doctrine was utilized as a political argument to limit the military presence of external powers in the Western Hemisphere. The symbolic climax of this was the Cuban Missile Crisis of 1962 when the deployment of Soviet missiles in Cuba was perceived by the U.S. as an unacceptable shift in the balance of power at its borders. This episode solidified in U.S. political culture the idea that the emergence of external military infrastructure in the region could provoke a sharp reaction.

While direct analogies today require caution, the very logic of "preventing strategic opportunities for external powers" is once again becoming part of the public discourse. For investors, this heightens the importance of analyzing not just macroeconomics, but also ownership structures of assets, sources of equipment, creditors, and technological dependencies.

6) After the 1990s: Globalization, Then a Return to Geoeconomics

Between 1990 and 2010, the focus of the global economy shifted towards globalization, with Latin American countries actively diversifying their foreign ties and financing. However, in the 2020s, geoeconomics has gained traction: trade wars, sanctions, technology controls, and "friendshoring" have become the new norm.

Against this backdrop, the "Monroe Doctrine" in its modern interpretation is less about the 19th century and more about managing access to critically important assets (ports, canals, energy networks, LNG logistics, data centers, communication cables, and critical mineral deposits) and about politically solidifying U.S. priorities in the Western Hemisphere.

7) "Trump's Corollary": What the New Version Entails

In the public discourse of late 2025, the term "Trump's Corollary" has become associated with the Monroe Doctrine—an attempt to formalize a course aimed at strengthening American influence in the Western Hemisphere while limiting the ability of "external" competitors to control strategic assets or establish threatening capabilities in the region.

From a practical standpoint, this course is typically broken down into instruments:

• Deals and Pressure through Trade Policy: Market access conditions, tariff and non-tariff measures, and re-evaluation of preferential regimes.
• Sanctions Architecture: Targeted restrictions against individuals, companies, specific sectors, and financial channels.
• Security and Law Enforcement Agenda: Strengthening measures against drug trafficking and transnational networks, control over maritime routes.
• Restructuring Supply Chains: Promoting nearshoring and projects that reduce dependency on external suppliers.

For capital markets, this may signify more frequent "jumps" in risk based on news, an increased role for political signals, and greater volatility in specific countries and sectors.

8) What Changes for Investments in Latin America and the Caribbean

A key effect of the "reactivation" of the Monroe Doctrine is the growing heterogeneity of the region in the eyes of global capital. The market will increasingly distinguish countries based on political compatibility, sources of funding, and the structure of strategic projects.

Practical channels of influence on investments include:

• Infrastructure and Logistics: Ports, container terminals, railroads, digital infrastructure—subject to stricter compliance and scrutiny of beneficiaries.
• Energy: Oil, gas, electricity, and fuel supply chains—an increased risk of regulatory changes and political conditions for projects.
• Mining and Critical Minerals: Lithium, copper, nickel, and rare earth elements—heightened interest and competition, potentially stricter localization and control conditions.
• Sovereign Debt: Increased sensitivity to sanction risks, relationships with the U.S., and the composition of creditors.

Conversely, there are potential benefits for countries integrated into the nearshoring logic: inflows of direct investment, growth in industrial employment, expansion of export niches, and strengthening of certain currencies and local capital markets.

9) Investor Checklist: How to Incorporate the Monroe Doctrine into Strategy

If the Monroe Doctrine is re-entering applied U.S. foreign policy, it is crucial for investors to translate this into measurable parameters for risk management:

1. Exposure Map: Portfolio share by countries in the Western Hemisphere (sovereign risk, banks, infrastructure, energy, telecom).
2. Sanction Screening: Beneficiaries, creditors, equipment suppliers, counterparties in off-take and EPC contracts.
3. Legal Resilience: Arbitration clauses, jurisdictions, covenants, step-in opportunities, and operator changes.
4. Political Triggers: Elections, migration crises, spikes in violence, major deals with external players regarding ports/telecommunications/energy.
5. Currency Dynamics: Hedging, stress tests for devaluation and capital flow restrictions.

A scenario approach deserves separate consideration:

• Baseline Scenario: Strengthened political control without large-scale escalation; increasing compliance and selective sanctions.
• Hard Scenario: Sharp restrictive measures against specific regimes/sectors; worsening liquidity and rising risk premiums.
• Positive Scenario: Acceleration of nearshoring, increased investment in industry and infrastructure geared towards the U.S. market.

10) Conclusion: The Monroe Doctrine as a Factor in Risk Pricing

The Monroe Doctrine is not just a historical term but a convenient framework through which the U.S. articulates the primacy of the Western Hemisphere and the limitation of external competitors' influence. In conjunction with nearshoring, sanctions policy, and the competition for strategic assets, it becomes a factor in the "risk price" for Latin America and the Caribbean.

For global investors, the key recommendation is straightforward: keep not only inflation, rates, and budgets in focus but also the geopolitical compatibility of projects, the ownership structures of infrastructure, and potential foreign policy triggers. In a context where U.S. foreign policy increasingly impacts capital costs, the Monroe Doctrine is transforming into an applicable element of investment analysis—on par with credit quality and balance of payments.