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

The term "Monroe Doctrine" is re-entering the political lexicon of the USA, which many believed to be an archaic relic. In 2025, Washington's official strategic rhetoric positioned the Western Hemisphere as a priority area of interest, emphasising security, migration, drug trafficking, control of trade routes, and competition with external players over infrastructure, resources, and supply chains. For global investors, this is not merely an academic discussion about 19th-century diplomacy, but a practical factor necessitating a reevaluation of country risks, sanctions scenarios, trading conditions, and project resilience within 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 revival of the Monroe Doctrine essentially represents a return to the logic of "spheres of influence," albeit within a modern context. At the heart of the discussion are four interrelated themes:

• Geopolitics of the Western Hemisphere: US competition with external power centres for ports, telecommunications infrastructure, energy, and logistics.
• Nearshoring and supply chains: relocating manufacturing closer to the US market, enhancing the importance of Mexico, Central America, the Caribbean, and northern South America.
• Security: migration flows, drug trafficking, maritime routes, and combating transnational criminal networks.
• Sanctions and access to capital: an increased likelihood of "targeted" restrictions and a reassessment of the access regimes to dollar liquidity and US markets.

For investors, this indicates that risk premiums across various jurisdictions may fluctuate more rapidly than macroeconomic indicators, and political decisions may exert a stronger influence on funding costs and currency trajectories.

2) The Origins of 1823: What Was Initially Declared

The classical Monroe Doctrine was articulated in President James Monroe's address to Congress on December 2, 1823. At its core, it was a message to European powers: any further colonisation and forceful interference in the affairs of the Americas would be perceived as a threat to US interests and security. Additionally, the United States expressed its unwillingness to interfere in European conflicts and recognised existing European colonies in the Americas without seeking to alter their status "in the moment."

It is vital to understand that the Monroe Doctrine began as a warning against external expansion in the Western Hemisphere, rather than as a formal "licence" for US intervention in neighbouring countries. However, subsequent history demonstrated how political formulas evolve alongside shifts in the balance of power.

3) The Three Principles of the Monroe Doctrine: Brief and To the Point

In practical terms, the Monroe Doctrine can be distilled into three foundational principles guiding US foreign policy in the Western Hemisphere:

1. Division of spheres of influence: Europe and the Americas are viewed as distinct political spaces.
2. Non-colonisation: new colonies established by European powers in the Americas are unacceptable.
3. Non-intervention: external powers must not interfere in the affairs of independent states in the Americas.

The key conclusion for markets is that if these principles become "activated" in contemporary US policy, the likelihood of protectionist measures, control over strategic assets, and intensified scrutiny of transactions in infrastructure, energy, extraction, and communications increases.

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

The most significant shift came with the early 20th-century interpretation often referred to as Roosevelt's Corollary (1904). If the Monroe Doctrine initially functioned primarily as a "barrier" against European colonisation, the corollary introduced the idea of the US's right to intervene as a "last resort" to prevent external interference and "chronic instability," which included issues related to debt crises and threats posed by European creditors seeking to enforce repayments by force.

From an investment perspective, this historical parallel is crucial: issues surrounding debt, default, creditors, and political pressure are once again part of the discussion regarding regional stability—as they pertain to the 21st century, where not only sovereign bonds play a role but also concessions, off-take contracts, project financing, and control over ports.

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

During the Cold War, the Monroe Doctrine served as a political argument to limit the military presence of external powers in the Western Hemisphere. The symbolic high point was the Cuban Missile Crisis in 1962, where the deployment of Soviet missiles in Cuba was perceived by the USA as an unacceptable alteration of the balance of power at its borders. This episode entrenched in the political culture of the USA the notion that the emergence of external military infrastructure in the region can elicit a severe response.

Today, drawing direct analogies warrants caution; however, the very logic of "preventing strategic opportunities for external powers" is again part of the public discourse. For investors, this amplifies the significance of not just macroeconomic analysis but also ownership structure of assets, sources of equipment, creditors, and technological dependencies.

6) Post-1990s: Globalisation Followed by a Return to Geoeconomics

In the 1990s to 2010s, the focus of the global economy shifted towards globalisation, and Latin American countries actively diversified their external relations and financing. However, in the 2020s, geoeconomics has strengthened: trade wars, sanctions, technology controls, and "friendly" supply chains (friendshoring) have become the new norm.

Against this backdrop, the "Monroe Doctrine" in its modern interpretation is less about the 19th century and more about managing access to critically important assets (ports, canals, energy networks, LNG logistics, data centres, communication cables, critical mineral deposits) and about politically entrenching US priorities in the Western Hemisphere.

7) "Trump’s Corollary": What the New Version Implies

In the public discussion towards the end of 2025, the term "Trump Corollary" emerged in relation to the Monroe Doctrine—as an attempt to formalise a course towards enhancing American influence in the Western Hemisphere and limiting the capacities of "external" competitors to control strategic assets or establish threatening facilities in the region.

From a practical perspective, this course is generally broken down into several tools:

• Transactions and pressure through trade policy: conditions for access to the US market, tariff and non-tariff measures, reassessment of preference regimes.
• Sanction architecture: targeted restrictions against individuals, companies, specific sectors, and financial channels.
• Security and law enforcement agenda: strengthening measures against drug trafficking and transnational networks, control of maritime routes.
• Restructuring supply chains: promoting nearshoring and projects aimed at reducing dependency on external suppliers.

For capital markets, this may result in more frequent "jumps" in risk based on news updates, an increased role of political signals, and heightened volatility in certain countries and sectors.

8) What Changes for Investments in Latin America and the Caribbean

The key effect of the "reactivation" of the Monroe Doctrine is an increase in regional heterogeneity 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 include:

• Infrastructure and logistics: ports, container terminals, railways, digital infrastructure—under stricter compliance and scrutiny regarding beneficiaries.
• Energy: oil, gas, electricity, and fuel supply chains—higher regulatory change risks and political conditions affecting projects.
• Mining and critical minerals: lithium, copper, nickel, and rare earth elements—enhanced interest and competition, potentially stricter localisation and control conditions.
• Sovereign debt: greater sensitivity to sanction risks, relations with the USA, and the composition of creditors.

Simultaneously, the "flip side" may present potential benefits for countries integrated into the nearshoring logic: increased direct investment, growth in industrial employment, expansion of export niches, and strengthening of certain currencies and local capital markets.

9) Check-list for Investors: How to Incorporate the Monroe Doctrine into Strategy

If the Monroe Doctrine is re-emerging in the applied foreign policy of the USA, it is crucial for investors to translate this into measurable parameters for risk management:

1. Exposure map: portfolio share by countries in the Western Hemisphere (sovereign risk, banks, infrastructure, energy, telecom).
2. Sanction screening: beneficiaries, creditors, equipment suppliers, counter-parties under off-take and EPC contracts.
3. Legal resilience: arbitration clauses, jurisdictions, covenants, step-in opportunities, and operator change options.
4. Political triggers: elections, migration crises, spikes in violence, major deals with external players regarding ports/communications/energy.
5. Currency outline: hedging, stress tests for currency devaluation and capital movement restrictions.

It is also worth considering a scenario approach:

• Base scenario: strengthening political control without large-scale escalation; increased compliance and selective sanctions.
• Hard scenario: sharp restrictive measures against certain regimes/sectors; deteriorating liquidity and rising risk premiums.
• Positive scenario: accelerated nearshoring, increased investments in industry and infrastructure "for the US market".

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

The Monroe Doctrine is not merely a historical term; it serves as a useful framework through which the USA explains the prioritisation of the Western Hemisphere and the limitation of influence from external competitors. Paired with nearshoring, sanctions policy, and competition for strategic assets, it emerges as a factor in the "price of risk" for Latin America and the Caribbean.

For global investors, the key recommendation is straightforward: maintain a 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 an environment where US foreign policy increasingly influences capital costs, the Monroe Doctrine becomes a practical element of investment analysis—on par with credit quality and balance of payments.