Trump Revives the "Monroe Doctrine": What It Means for Investors and Markets in the Western Hemisphere

The formulation of the "Monroe Doctrine" is once again becoming a prominent term in the political lexicon of the United States, a concept many considered a historical relic. In 2025, Washington’s official strategic rhetoric identifies the Western Hemisphere as a priority zone of interest, emphasizing security, migration, drug trafficking, control of maritime routes, and competition with external players over infrastructure, resources, and supply chains. For global investors, this is not merely an academic debate about 19th-century diplomacy, but a practical factor requiring a reevaluation of country risks, sanction scenarios, trade conditions, and the sustainability of projects in Latin America and the Caribbean.

The Monroe Doctrine and Trump’s "New Version": History, Logic, and Investment Implications

1) Why the "Monroe Doctrine" is Back on the Agenda

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

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

For investors, this indicates that the risk premium for certain jurisdictions may shift more rapidly than macroeconomic indicators, and political decisions could significantly impact the cost of funding and currency trajectories.

2) The Origins of 1823: What Was Initially Declared

The classic Monroe Doctrine was articulated in a message from President James Monroe to Congress on December 2, 1823. In its original logic, this served as a signal to European powers: any further colonization and forceful interference in the affairs of American states would be perceived as a threat to U.S. interests and security. Meanwhile, the U.S. expressed its unwillingness to interfere in European conflicts and recognized existing European colonies in America, refraining from attempting to revise them "in the moment."

It is essential to understand that the Monroe Doctrine began as a warning against external expansion in the Western Hemisphere rather than as a formal "license" for U.S. intervention in neighboring countries. However, the subsequent history revealed how political formulas evolve alongside the balance of power.

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

In practical terms, 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 regarded as distinct political spaces.
2. Non-Colonization: new colonies by European powers in America are unacceptable.
3. Non-Intervention: external powers should not intervene in the affairs of independent states in the Americas.

For markets, the key takeaway is that if these principles are "activated" in contemporary U.S. politics, the likelihood of protectionist measures, control over strategic assets, and increased scrutiny of transactions in infrastructure, energy, mining, and telecommunications rises.

4) Evolution: Roosevelt’s Corollary and the Shift to a "Policing" Logic

The most significant turnaround occurred with the early 20th-century interpretation, often referred to as the Roosevelt Corollary (1904). If the Monroe Doctrine previously served primarily as a "barrier" against European colonization, the corollary added the thesis of the U.S. right to intervene as a "last resort" to prevent external interference and "chronic instability," which included issues related to debt crises and threats from European creditors employing forceful debt recovery.

From an investment perspective, this historical parallel is crucial: themes of debt, default, creditors, and political pressure are regaining relevance in discussions about regional stability — now in the realities of the 21st century, where sovereign bonds, as well as concessions, off-take contracts, project financing, and port control, come into play.

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

During the Cold War, the Monroe Doctrine was invoked as a political argument to limit the military presence of external powers in the Western Hemisphere. Its symbolic high point was the Cuban Missile Crisis of 1962, when the placement of Soviet missiles in Cuba was perceived by the U.S. as an unacceptable alteration of 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 trigger a severe response.

Today, drawing direct analogies requires caution, but the logic of "preventing strategic opportunities for external powers" is increasingly becoming part of the public agenda. For investors, this elevates the significance of analyzing not just macroeconomics but also the ownership structure of assets, equipment sources, creditors, and technological dependencies.

6) Post-1990s: Globalization, Followed by a Return to Geo-Economics

From the 1990s to the 2010s, the focus of the global economy shifted towards globalization, with Latin American countries actively diversifying their external ties and funding sources. However, in the 2020s, geo-economics has intensified: trade wars, sanctions, technology control, and "friendly" supply chains (friendshoring) have become the new normal.

In this context, the "Monroe Doctrine" in its contemporary 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 reserves of critical minerals) and solidifying U.S. priorities in the Western Hemisphere.

7) "Trump’s Corollary": What Is Implied in This New Version

By the end of 2025, the phrase "Trump’s Corollary" has entered public discourse regarding the Monroe Doctrine — an attempt to formalize a course toward enhancing American influence in the Western Hemisphere and restricting the capabilities of "external" competitors to control strategic assets or position threatening capabilities in the region.

From a practical standpoint, this course typically translates into various tools:

• Deals and Pressure Through Trade Policy: conditions for access to the U.S. market, tariff and non-tariff measures, and the review of preference regimes.
• Sanction Architecture: targeted restrictions against individuals, companies, specific sectors, and financial channels.
• Security and Law Enforcement Agenda: increased measures against drug trafficking and transnational networks, control of maritime routes.
• Restructuring Supply Chains: promoting nearshoring and projects that reduce reliance on external suppliers.

For capital markets, this could lead to more frequent "jumps" in risk based on news outcomes, a greater role for political signals, and heightened 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 differentiate countries based on criteria of political compatibility, funding sources, and the structure of strategic projects.

Practical channels of influence on investments:

• Infrastructure and Logistics: ports, container terminals, railways, digital infrastructure — under stricter compliance and scrutiny of beneficiaries.
• Energy: oil, gas, electricity, and fuel supply chains — heightened risk of regulatory changes and political conditions for projects.
• Mining and Critical Minerals: lithium, copper, nickel, and rare-earth elements — increased interest and competition, potentially stricter localization and control requirements.
• Sovereign Debt: greater sensitivity to sanction risks, relations with the U.S., and the composition of creditors.

At the same time, the "flip side" may bring potential benefits for countries integrated into the nearshoring logic: inflow of direct investments, growth in industrial employment, expansion of export niches, and strengthening of specific currencies and local capital markets.

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

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

1. Exposure Map: portfolio share by countries in the Western Hemisphere (sovereign risk, banks, infrastructure, energy, telecommunications).
2. Sanction Screening: beneficiaries, creditors, equipment suppliers, counterparties for 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, and major deals with external players concerning ports/telecom/energy.
5. Currency Framework: hedging, stress testing for devaluation, and capital movement restrictions.

A separate scenario approach is worth considering:

• Base Scenario: strengthening of political control without large-scale escalation; increased 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 toward the U.S. market."

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

The Monroe Doctrine is not just a historical term but a convenient framework through which the U.S. articulates the priority of the Western Hemisphere and limits the influence of external competitors. Coupled with nearshoring, sanction policies, and the struggle over strategic assets, it becomes a "risk pricing" factor for Latin America and the Caribbean.

For global investors, the key recommendation is straightforward: focus not only on inflation, interest rates, and budgets but also on the geopolitical compatibility of projects, the ownership structure of infrastructure, and potential foreign policy triggers. In a landscape where U.S. foreign policy increasingly impacts capital costs, the Monroe Doctrine evolves into a practical element of investment analysis — alongside credit quality and balance of payments.