Implications of an “Americas First” Foreign Policy

[MUSIC] The Trump administration kicked off 2026 with a new, more forceful foreign policy. Driving this is the so-called Don Road doctrine. President Trump's take on the Monroe doctrine, a cornerstone 19th century U.S. foreign policy that aimed to expand U.S. influence and control in the Western hemisphere. So what could this ultimately mean for the U.S.'s next moves in Latin America and the Western hemisphere more broadly? How does it impact the calculus for China and Russia as they each pursue their own foreign policy goals? And what risks should investors be most focused on? I'm Al Sunathan and this is Goldman Sachs' exchanges. [MUSIC] Each month I speak with investors, policymakers, and academics about the most pressing market moving issues for our top of my report from Goldman Sachs Research. I recently spoke with Hal Brands, professor of Global Affairs of the Johns Hopkins School of Advanced International Studies, and with Mauricio Clevver Corone, President Trump's former special envoy for Latin America and managing partner of the Latin America Real Assets Opportunity Fund. I first asked them both for more insight into the Don Road doctrine starting with Hal. You are pretty patient in 2024. You argued that a second Trump presidency would feature a revitalized Monroe doctrine. What do you see as the underlying factor that motivated this more forceful posture in the Western hemisphere? The one factor is structural and the other is the factor that is structural is that the United States, because of its position in the world, typically tries to consolidate its position in the Western hemisphere when the rest of the world is falling apart. And so during one during World War II, during the Cold War, the United States worked very hard to try to ensure its dominance in the Western hemisphere. And it's not surprising that the US is doing the same thing as we enter a new era of great power rivalry. The personal issue has to do with the President. Thinking back to Trump's first term, he and his advisors talked about renewing the Monroe doctrine. And himself is very focused on this because he seeks a variety of benefits in the Western hemisphere from control of additional resources to control of additional territory, which he has talked about taking from Panama, Canada and Greenland. And I should add that the President is most intensely focused on tangible threats to American sovereignty and security, which tends to make him look very far to issues like drug trafficking and migration, which have their roots in the Western hemisphere as well. So when you put all those things together, it's not surprising that this administration has really put the focus on reconciling your position in the Western hemisphere. If anything, what's surprising is how energetic the administration has been. The intervention in Venezuela has gotten a lot of attention, but that's just the capstone of a much bigger and broader campaign that has featured diplomatic pressure on countries like Colombia and Panama, economic support to regional allies like the Malay government and Argentina, partnerships with the Blue Pillay government and El Salvador and other ideological fellow travelers and a whole array of initiatives, military, diplomatic, economic. A lot of the initial reports and discussion around developments in Venezuela seem to really focus on oil. So just to clarify, eating this is about oil. I think Trump focuses very intently on control of resources and he associates national power with control of resources to a remarkable degree. He has long said that the primary mistake in the American invasion of Iraq was not taking the oil. And so for Trump, I think this is at the forefront of his calculus. And if you think about the way that Trump has described USA's in Venezuela since January 3rd, he said his very little about democracy and good governance and seems perfectly happy to work with the remnants of the Maduro government there. He's actually said relatively little about drug trafficking. He has said a lot about the United States exerting greater control over the disposition and sale of Venezuela and oil on the market and the desire for greater openness of the Venezuela and oil industry to the participation of US majors. And so I think different people in this administration value different things in this Trump or Larry to the Maduro doctrine. But for Trump himself, the primary issues are essentially about economic gain and sort of a neo-mercantilist approach to international economics. So is that really what differentiates the Don Roe doctrine from the Monroe doctrine? The Monroe doctrine has evolved over time in terms of what it means. In the 19th century, it was initially about preventing the re-imposition of colonial control by European powers. During the 20th century, it became really about keeping fascist and communist regimes out of the hemisphere. I think the Don Roe doctrine in some way that they re-version to an earlier style of statecraft much less apologetic about the desire to control the resources of weaker countries, much more willing to talk about outright acquisition of territory or other things that seem to have gone out of style with the end of the age of imperialism. So it sometimes said that Trump is trying to revive a 19th century style of foreign policy. I think Trump would feel quite at home if he were presiding over some of the US interventions in Latin America in the late 19th and early 20th centuries. And this was Mauricio's take on the Don Roe doctrine. The way the president sees it, you can't be the preeminent global powers. You're not first and foremost, the preeminent regional power. And what everybody seems to misunderstand is that this was the president's thinking himself. Do as an advisor influencing him on the need to focus first and foremost on the region as a way of being a preeminent regional power therefore then being able to reflect that globally is him. Because not only did he know the region, he's been throughout the region throughout his life in his career, he's a developer from New York, right? And he very much thinks in building neighborhoods. The president's view is always listen, there's not a region in the world that impacts the United States more on a daily basis than Latin American, the Caribbean, whether it's from a security perspective, from the transit of drugs and even potentially terrorism, etc. They can crush the borders. And that was always his philosophy. And I saw firsthand many times over and even with there was conflicts in Afghanistan, Syria, etc. During the first term, whereby the president even in the use of military force, he would say, wow, we're so eager and so easily we send troops to fight in Afghanistan or Syria, and etc. But then yet as things were in 2019 building up in Venezuela, we're so scared to have any type of presence here in the Western hemisphere, which is where we live. And I remember at one point, particularly during that whole time and situation when things were really dramatically increasing in Garza, Venezuela, at one point he asked, hey, can we send a ship to basically be present so that they know at least we're there, right? And he was notified that there were no Navy ships in the vicinity of the Caribbean. It was his mind blowing. How is it that we're out there? Oh, they're all in the Persian Gulf and South Asia and the Mediterranean. Well, what about right here? And so that was the start experiences. But of course, the team at the time and the first term was so focused on the Middle East and Asia. And so the first term was very much about how do we set frameworks to mostly through soft power, be able to pivot from China because the story of the last two decades has been China's growing influence in the region in the United States, waiting influence in the region. The second term is the implementation of what the president's vision is when he was inaugurated the second term, he made it extraordinarily clear. He harkened back to President McKinley. He harkened back to the golden era of American influence. And that was the golden era of American influence that was projected through bricks and mortars and through actual influence through not only the concept of the morrow doctrine then with the Roosevelt corollary whereby we had primacy in the region, but also in the sense of the Panama Canal and that type of influence. And the big difference, the second time around, is also the team. There's no competing interest. So obviously you have a secretary of state and now a national security adviser as well, Marco Rubio, who understands and cares and knows of the region and understands the president's thinking. You have Stephen Miller, who has worked on the issues and also has a holistic view on immigration. We have a secretary of defense that also agrees that was part of the biggest problem in the first administration, the secretary of defense. Didn't even believe that the deal should be involved in counting narcotics. I hear you talk about this influence in the region. What really is the goal of having that influence? Security crosses the gamut from narcotics to terrorism, whether it's ideological or narcotics based terrorism. Energy security is also an important part of security. The Kileshio as Ugo Chavez learned a long time ago, and West Fidel Castro is always known, which is why he created Ugo Chavez and why Venezuela was ultimately his golden crown until he passed away. The Kileshio of the Caribbean, particularly is energy. Those countries have a pressing need for energy. So to Central America, one of the biggest drivers, frankly, of migration, even throughout Central America, has been the high cost of energy. So energy security, which then leads to obviously the security issues with migration, those all come hand in hand, which is why all of that is important. And look, here's the reality. And I think you've seen it across the board from day one of this administration, whether it's in the priorities that we've set forth of late in Central America, the relationship we've created with Mexico, the support we gave to Argentina during its time of crisis, prior to the midterm elections. So obviously now, Venezuela, all of this is based on first and foremost, US security. And by the way, it's very also consistent with President Trump and his thinking on energy. The US is an energy powerhouse in its own. And he's like, well, why are we exploring and producing more here? And at the end of the day to help with energy prices in for us, you know, that's going to make us and keep us as a global powerhouse in its own. And that's also the case with Latin America, like Venezuela, first and foremost, with Mexico, Brazil, Argentina, Colombia. Bolivia, and its own right. These are energy, our houses are could be the only reason why Mexico and Argentina and Venezuela, frankly, and Brazil to a degree or an energy powerhouses per se to the scale of the United States or Saudi Arabia or even Russia to be quite honest is because of poor management. I mean, just look right next door to Venezuela and Diana. Diana is now, you know, probably will change now with more proper management in Venezuela. But guys now producing more oil, more pearls per day than Venezuela. That's because they're mostly has been American companies working closely with the Diana government. And I think that countries like Diana are a great example that, you know, when American companies work hand in hand with the government to develop good politics from the get go and hopefully leaving behind a lot of the nationalist 20th century strains, ideological strains that at the time, the different revolutions embedded into the psyche of the populations. I hear all that, but President Trump was elected on an America first platform. So does expanding US influence in Latin America conflict with that platform? No, as the America first movement propagated, it was natural that the next extension was going to be the Americas first. We were going from America first to America first in the sense of countering what was the notion of, you know, every expert in DC think tank had already been pronosticating that the 21st century would be the Chinese century while the 20th century was the American century. And the president was saying his inauguration was absolutely not. 21st century is going to be another American century and not the greatest American century. And there is no entanglement. We don't have boots on the ground in Venezuela. At the end of the day, it's just not nation building. And I think that's where people confuse. These are about partnerships, practical partnerships between nations because it's with the left and the right. Like right now we're working with the interim government of the left and Venezuela. And we're working with the conservative government in Argentina. We're working with the left leaning government of Mexico and the right leaning government of El Salvador Costa Rica or now Chile, etc. So these are practical relationships. These are business oriented relationships because what people are aspiring to throughout the region are practical business relationships where people can live in secure countries and do well and be able to thrive and be able to have growing economies and be able to have business opportunities. And that's the psyche of all of these countries. And so I think there's a dynamic social shift there. So what might be next then for US action in Latin America? You have elections now in Colombia and Brazil, which are going to be very important. Those elections will also kind of set the marker and particularly if the center, right, more conservatives win in those countries. You pretty much have like for the first time with an ideological consolidation of the region. But again, let me take my own advice and not discuss it in ideological terms. If new leaders choose the United States person for most as partners, at least you have a consolidation of partnerships throughout the region, which will be quite an opportunity to then consolidate those allies. Now, what does the expression of that look like? We've already done some of these commercial deals with some of them at least definitely from a tear of perspective, etc. But I think a modernization of our business relationships and commercial partnerships, all those countries did an order that might be start with Mexico and the USMCA renegotiations this year. That's about the president chooses, which it seems like that's the case and that's where he's at right now. But there's an opportunity now with our friends and allies throughout the region to really reconfigure what those partnerships look like and what those relationships look like and modernizing those from very focused on trade and to move beyond that to one focused on US investment, equity, putting the flag, making partnership and deals in the region that ensure strategic presence by the United States, Indies, Energy, Infrastructure, Sectors, etc. That hopefully by the end of this term, no one again will be talking about, oh, yeah, the Chinese are getting this port and the Chinese are buying this grid or this mineral rights, etc. That it'll be unquestionable that the United States is the partner of choice for Latin American and Caribbean. I then turn back to Hal for his take on what the Don Roe doctrine could mean for other countries in the Western hemisphere and the world more broadly. If you think about these museum developments, what do you think will be the implications for other Latin American countries? I think it has served notice that if there are vulnerable anti-American regimes that are playing strategic footsie with China and Russia, they are probably going to come in for greater pressure. Cuba might be the best example of this. That said, I am skeptical that we're going to see large scale US military intervention in Cuba. I'm not actually sure that the administration wants the Cuban regime to collapse because that might produce a flood of refugees headed for the United States. For countries from Colombia all the way up to Mexico, the result is going to be a sense of pressure to act with greater urgency on issues related to narco trafficking. And certainly, I think you're already seeing that with the discussion of the US and Mexico appear to be having about a simple role for the US military and going after partels that operate in Mexico. You're seeing it with some of President Trump's comments about Colombia. Washington, China have significant interest in Venezuela and Latin America more broadly. What do you think they are learning or taking away from the US's recent actions? To some degree, Moscow and Beijing have run up forward against the reality of US hard power at the Western hemisphere. And whether it is the US Navy and Coast Guard seizing shadow fleet tankers or the United States forcibly deposing Maduro or Pentagon shooting up drug boats and the Caribbean, there's just really not much either Moscow or Beijing can do to contest the application of American military power in the Western hemisphere. That said, if you are thinking about China in particular, Chinese influence in the Western hemisphere is relatively deeply embedded. It is embedded in trade relationships. It's embedded in the diffusion of technology. It is embedded in both physical and digital infrastructure and all of these things are going to persist. And I think Beijing is going to play the long game. It's going to try to continue developing economic relationships, political relationships. In some cases, low profile security relationships that will focus more on police and internal security than traditional military functions. So I think Beijing is going to persist in its efforts to win influence in the Western hemisphere over time, even though they recognize that there are areas where they're just not going to be able to compete with the United States. If anything, this simply tells us that we're entering a more intense phase of the competition for influence in the region. Let's talk a little bit about Greenland. How does the administration's actions in Greenland really shift? How we should be thinking about NATO and the global balance of power with the US, really trying to achieve in the broader hemisphere? Greenland is both a hemispheric issue and a global issue. It's a hemispheric issue in the sense that Trump and people around him see consolidating US control of Greenland as part of this larger effort to revive the Monroe doctrine. And they can point to historical examples in which the United States has increased influence in Greenland as part of a strategy of hemispheric defense, as President Roosevelt did, and run up to US entry into World War II. It's a global issue, though, for two reasons. First, because it so powerfully affects the fate of NATO and the transatlantic community. And I think it is hard to overstate the degree of outright alarm that Canada and many European countries feel as a result of US desires to acquire Greenland. But also number two, it's the best test of whether the United States is actually going to go down the route of seeking changes at the territorial status quo in the world. And the reason that such an explosive issue is that this is like what China is doing in the South China Sea and in the Himalayas, what Russia is doing in Ukraine. And so if you have a situation which the US is also seeking to redraw borders through coercion or perhaps the use of force, you have a world in which the three most powerful countries are all violently or coercively disrupting the territorial status quo. territorial status quo, that's something we haven't seen since the 1930s, and that could be deeply corrosive to the international order that has prevailed since 1945. So would you say that recent US actions have helped further China and Russia's ambitions in some ways? I think a few things can be true at once. First, the Laws of Maduro is a loss for both Beijing and Moscow because they have both invested in this relationship. And also, Beijing and Moscow never like it when they see the US use military power with the sort of ruthless efficiency we saw in Caracas in early January. But, too, that doesn't mean that this is entirely a bad news story for Moscow and Beijing because if we are entering a world where international law and international norms matter less, if we are entering a world in which great powers are free to do as they like in their immediate surroundings, that's exactly the sort of world that Chinese and Russian leaders would be comfortable in. And in fact, exactly the sort of world that they're trying to bring about, whether it's in Eastern Europe or the Western Pacific, moreover, if we're seeing an intensification of US military activity in the Western Hemisphere that is going to pull resources away from other regions, then that's potentially a good new story for Russia and China as well. It's worth noting that the aircraft carrier that Trial redeployed from the Mediterranean to the Caribbean in November was meant to cover the Middle East and Europe. And so, if you think about other regions of the world, the US is operating in a bit of a resource deficit at the moment and that's not the worst thing for other US adversaries. Iran doesn't really seem to fit into the Don Road Act, and obviously it goes beyond. So how does that fit into this? Iran is one of the key reasons why we should be skeptical of the idea that the world is rapidly transitioning into a spheres of influence arrangement. Yes, Trump wants an American sphere of influence in the Western Hemisphere, but he also likes to maintain unhindered freedom of action globally when he thinks that is advantageous to him. And so if you look at the national security strategy that the administration put out, there's a lot of talk about the need for American dominance of the Western Hemisphere. There's also a lot of talk about the role the president has played in trying to broker peace between Azerbaijan and Armenia or Cambodia and Thailand and a bunch of other countries around the world. And so, President Trump wants dominance at home and he wants freedom to grow a broad. So what does this all mean for companies and investors? Here's what Hal had to say. The way I would put this is that I think we have lived for so long in an international system that is conditioned by mostly benign, mostly responsible US leadership that we just can't even conceive of what the world will look like if and when that leadership goes away. The post 1945 Internet order has featured very strong prohibitions on forceful conquest, very strong protections for freedom of navigation, which is essentially the foundation of the international economy, free trade and globalization have proceeded in a world that is secured and stabilized by US power. Democracy and human rights have spread more widely than ever before and part thanks to US influence. And so the the mega risk that I have in mind is that if United States ever decides that it wants to play a fundamentally different role in the world, the war in order is going to change fundamentally. We're going to see more countries pursue nuclear weapons. We are going to see a retreat of democratic values in regions around the world. We're going to see much greater disorder on the high seas, which will have implications for global trade and dollar dominance is going to come in for greater challenge. And so the the mega risk that I keep my eye on is basically a fundamental shift in the US approach to global policy because I think that will fundamentally shift the way that the war works in a number of different respects. 30 years ago, I would have said there's very little chance of this happening. 15 years ago, I would have said there were growing retrenchment minded inclinations in the US foreign policy debate. We now have a president who often talks like he wants a fundamental change in the way the US does business internationally, even though the policy see pursues are sometimes a little bit more conventional than that. And so the prospect of a fundamental shift in US foreign policy is more real now that it has been at any time, I think, in the last 70 years. Let's leave it there, lots to watch, my thanks to Hal Brands and Mauricio Clevver Carone. And thank you for listening to this episode of Goldman Sachs exchanges. I'm Allison Atheon. 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