The Economic Cost of Military Tension for Mexico

towards Mexico — have economic repercussions that extend beyond fluctuations in fuel prices. This geopolitical uncertainty also occurs within the framework of the renewal of the Trade Agreement between Mexico, the United States, and Canada (T-MEC), which could take place under “less favorable” conditions and with increased demands.Román Moreno, an economist and specialist in the History of Economic Thought from the National Autonomous University of Mexico (UNAM), explained to Líder Empresarial the financial consequences of the military escalation that occurred on January 3 in Caracas, Venezuela, which resulted in approximately 77 deaths, in addition to missing and injured persons.According to Moreno, U.S. interventions in Latin America have left long-term “economic footprints,” both in the dismantling of autonomous development projects and the re-primarization of productive sectors and state capture by coalitions aligned with external interests.In this regard, he recalls what happened in Guatemala in 1954, when then-President Juan Jacobo Árbenz— was overthrown by invoking “security” to, in reality, protect investments of firms like United Fruit.“The result was a civil war, institutional deterioration, and persistent inequality. That pattern, which combines geopolitics with corporatism, is repeating itself in the 21st century with different pretexts,” Moreno warns.However, the specialist distinguishes current events due to their energy scale and the existing complexity of value chains, as Venezuela concentrates the world’s largest proven oil reserves (303 billion barrels), but with production depressed by sanctions, underinvestment, and the technical difficulty of extra-heavy crude.Read more at:## Arms Tension in Latin America: Economic Repercussions for Mexico?Moreno indicates that the Monroe Doctrine, restored by Trump, is currently being used in an expansive and interventionist manner to legitimize Washington’s primacy, which has dual implications for Mexico.On one hand, it affects sovereignty and legal certainty, as it strains the principle of non-intervention, while also undermining the commercial architecture, as it intersects with the review of the T-MEC in 2016. A negotiation — Moreno mentions — when under threat, reduces room for technical agreements and increases investment volatility.Furthermore, this arms tension also has economic repercussions that can destabilize the security of foreign investments in Latin America and Mexico. According to Moreno, when hemispheric policy leans towards doctrines of “guardianship,” companies internalize the risk of intervention, sanctions, and capital controls, which affects investment horizons.Added to this is the increase in cross-border legal risk, as extraterritorial actions complicate compliance and financing. Another factor is that, if the T-MEC is used as a tool of pressure, localization decisions are postponed or require higher political risk insurance premiums.## Is T-MEC at Risk with Conflict?Following the bombing in