LatAm and Trump: On foolhardy pronouncements

Now that the surprise of Donald Trump's election victory in the US has slightly dimmed, the relevant question to ask is, What does this mean for Latin America? In the week since the election, we have scant clues.

In an interview on 60 Minutes on Sunday evening, Trump said he had every intention of building his famous wall with Mexico. "I'm very good at this, it's called construction," the president-elect said. Trump also said he would deport 2 million illegal immigrants – "it could be even 3 million, we are getting them out of our country or we are going to incarcerate." The vast majority of these are presumably Mexican and Central American migrants.

Trump and his Republican party now control the White House and Congress, so it wouldn't be hard to roll back President Obama's gains in Cuba – which in any case came via executive order. In recent months, Trump suggested he might scrap the détente while campaigning in Florida, but in the 60 Minutes interview there was enough in his words to hint that what was said on the stump should not be necessarily taken at face value: "Sometimes you need a certain rhetoric to get people motivated," he quipped. (Asked whether he would try to put Hillary Clinton in jail, in the vein of the Latin American populist stongmen he has been compared to, he responded, in reference to the Clintons, "I don't want to hurt them, they are good people.")

The real impact so far of a Trump presidency has been depressed LatAm currencies. Investors seem to think potential fiscal loosening and further rate hikes could bode well for the dollar under Trump. The Mexican peso in particular has plummeted, falling to a historic low last week, and it is in Mexico where there is the most amount of concern. Ratings agency Fitch has projected "economic uncertainty." Trump could renegotiate or scrap NAFTA, and overall has vowed a highly protectionist economic policy. He will not forget that it was the Rust Belt states of Ohio, Michigan and Wisconsin, an area arguably hardest hit by the ephemerality of global jobs and capital, that won him the Electoral College vote. 

On the plus side, at least for a country like Chile, the price of copper has soared on promised US infrastructure spending, gaining more week-on-week last Friday than it has since 1979. While natural resource extraction in the region might gain from his win, boosting many countries hard hit by the end of the commodities super cycle, as my colleague Andrew Baker commented in an opinion piece last week, climate treaties and renewable power in Latin America could suffer. To what extent, at this stage, is anyone's guess.

Like Brexit and the 'No' vote in Colombia, pollsters, the media, consultants, and just about everyone else got the election wrong. We are entering a new era in how information reaches people, how we respond to information, and where the truth is to be found. So it would be foolhardy to make any bold pronouncement. Trump himself believes that something as innocuous as his Twitter account had more to do with his victory than any amount of campaign spending.

"I think that social media has more power than the money they spent, and I think maybe to a certain extent, I proved that," he said.

In this sense, as Mr. Trump won, many of us failed, and there is a lot of learning to do. For the moment, uncertainty abounds.