Trump’s “Donroe Doctrine” raises stakes for Canadian companies in Latin America
Trump’s moves in Venezuela and threats toward Colombia are increasing geopolitical risk for Canadian firms with big investments in the region, forcing higher risk premiums.
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By Torontoer Staff
U.S. President Donald Trump’s recent actions in Venezuela and provocative comments about Colombia have injected fresh geopolitical risk into Latin America, complicating plans for Canadian firms that have invested heavily across the region. The shift in Washington’s posture, framed in a new National Security Strategy as a reassertion of influence, is already prompting companies to reassess exposure and contingency plans.
Resource companies are among the most exposed. Over decades miners and other Canadian businesses poured tens of billions of dollars into Latin America under the assumption that the region had moved past the era of arbitrary expropriations and nationalist closures. The Trump administration’s so-called Donroe Doctrine, focused on reasserting U.S. primacy and countering Chinese influence, risks reversing that confidence.
Where Canadian capital already sits
Vancouver’s Aris Mining Corp. captures what is at stake. The company operates two gold mines in Colombia and briefly reached a market value near $4.5-billion after record gold prices, a TSX Composite listing and a settled arbitration with the Colombian government. News of Mr. Trump’s capture of Venezuelan leader Nicolás Maduro, and his public attack on Colombian president Gustavo Petro, added near-term uncertainty to that position.
Other major Canadian players with material regional footprints include Teck Resources, First Quantum, Agnico Eagle, Sherritt International and Pan American Silver. Beyond mining, Saputo owns a major Argentine dairy processor, Brookfield controls power assets in Brazil and Colombia, and the Canada Pension Plan Investment Board owns a major natural gas pipeline in Peru. For banks such as Scotiabank, sizable operations across Mexico, Chile, Peru and Colombia make the region strategically important.
If that could be removed, then I think investment would be much easier. Trump plays an unusual game. I think people understand that, they also understand that there is actually an elected government in the country.
Neil Woodyer, CEO, Aris Mining
What the Donroe Doctrine changes
The 2025 U.S. National Security Strategy explicitly calls for a reassertion of U.S. influence in the Western Hemisphere, stating the United States will reapply the Monroe Doctrine to limit rival powers. The immediate target is China, which has invested roughly US$240-billion across Latin America in energy, mining, manufacturing and infrastructure, including the newly built US$3.5-billion Chancay port in Peru.
That competition can play out through diplomacy and finance, but in recent weeks Washington’s rhetoric moved toward covert and overt pressure, including asset seizures and talk of military options. The result for investors is a broader set of political scenarios to plan for, from forced asset sales to sudden changes in local security conditions.
Ousting China won’t be easy for the U.S.
Rafael Ch, senior analyst, Signum Global Advisors
Markets, risk premiums and how companies react
For many investors the immediate reaction has not been panic. Some executives see openings if U.S. pressure reduces corruption or cartel influence in certain countries. Scotiabank CEO Scott Thomson told investors that a stronger U.S. role could, over time, stabilise parts of the hemisphere and be positive for lenders active there.
Still, analysts warn that sustained pressure for regime change could make the region more volatile, not less, during a transition period. Venezuela illustrates the danger. Professor Rebecca Hanson of the University of Florida calls the situation in Venezuela a ticking time bomb, with rival armed groups and local power brokers ready to contest any vacuum left by the captured leadership.
I don’t think you can overestimate how much of a ticking time bomb the situation is right now.
Rebecca Hanson, University of Florida
Market practitioners already price in governance risk. Assets in countries with frequent political turnover typically trade at lower valuations. Resource portfolio manager Onno Rutten notes that investors simply add another layer to the risk model when evaluating projects in Peru, Colombia or similar markets.
Some international executives object to being pushed into political roles. Christopher Ecclestone, a mining strategist, warns that corporations are not suited to act as instruments of military or political strategy and will push back against being placed visibly on the front line.
Practical steps companies are taking
- Reassessing country exposure and applying higher risk premiums to project valuations
- Enhancing contingency planning and liquidity buffers for operations in volatile jurisdictions
- Increasing local stakeholder engagement to reduce political and social friction
- Diversifying supply chains and shifting capital to more stable jurisdictions when possible
- Running scenario exercises that include abrupt regime change and sanctions outcomes
Executives who have worked in higher-risk markets say adaptability matters. Woodyer referenced his experience in West Africa, noting that success depends on tailoring operations to the local context and maintaining flexibility in the face of sudden policy shifts.
A transition period, not an endpoint
The U.S. Senate has moved to limit further military action in Venezuela without congressional approval, and that procedural check makes a large-scale, sustained U.S. intervention less likely in the short term. Still, the uncertainty created by new U.S. policy and the heightened rivalry with China is now another structural factor for Canadian firms to manage.
For companies with assets in Latin America, the immediate cost is financial and operational complexity. They must add a new risk premium to valuations, build more flexible plans and prepare for disorder during any political transition. The region’s long-term gains in living standards and openness to foreign investment remain intact, but the road there may be bumpier than recent years suggested.
geopoliticsLatin AmericaminingCanadabusiness
