Tracey Alloway (2:24)

Yes, he seemed to enjoy getting access to a lot of oil from Venezuela, and I guess the thinking is perhaps he tried to repeat that in Iran with so far varying degrees of success.

Joe Weisenthal (2:35)

Yeah, maybe no success at all. Yes, I'm being facetious, perhaps generous, but like this idea that it's like, okay, remove Maduro and here is someone who was part of the government. It's like, okay, you know what, we're going to be friends with the Americans now. We're going to play ball. You know, certainly don't want to, you know, the next in charge didn't want to end up in the same person, you know, it didn't want to end up in the same position. I almost Freudian slipped and said same prison though that would have also worked, but didn't want to end up in the same position as Maduro. And so, okay, there's this sort of partnership. But it also occurs to me, like even setting this aside, doesn't it feel like we're in some sort of. I don't know if golden age is the right word, but there's so many iconic Latin American leaders right now. So obviously you Dulce and then you have Sheinbaum and you have Javier Milei and you have Lula and of course Bukele. And so we sort of like are in a moment where there are several very high profile LATAM leaders, all of which seem to be carving out their own lane in one way or another.

Tracey Alloway (3:40)

Well, the other reason that Latin America is really interesting at the moment is because the Trump administration has basically said that after they're done with Iran, in whatever way they're envisioning, Cuba is sort of next in their sights. Right. And we know that Cuba has been struggling because of high oil prices. I think we touched on it a little bit when we did some of our Venezuela episodes.

Joe Weisenthal (4:00)

Yeah.

Tracey Alloway (4:01)

But there's definitely a lot to talk about in terms of that region and what's going on with America and the war in Iran.

Joe Weisenthal (4:09)

Totally. So is LATAM going to be Bukele ified or there's going to be sort of these extreme, harsh, like sort of illiberal crackdowns on crime? Is it going to be delified? Are there going to be a lot of pliant leaders? Is there going to be a sort of populist left wave if Sheinbaum is more successful or Lula's ongoing success? Is it going to be libertarian if things work out in Malay? Very interesting questions. Anyway, I'm very excited to say we have a perfect guest, someone who I've been reading for a long time. He has a great substack called the Latin America Risk Report that I really find to be essential reading. He is a founder of a company called Hexagon, non resident fellow at the Stimson Center. We are going to be speaking with James Bosworth, goes by Boz and knows a lot about LATAM politics. So Buz, thank you so much for coming on Odd lots.

James Bosworth (Boz) (4:58)

Thank you for having me here. I'm a big fan.

Joe Weisenthal (4:59)

Thank you so much. What do you tell us? I've become a really big fan of your newsletter, and you have a pretty wide and deep understanding of latam. But what do you tell us a little bit about your background?

James Bosworth (Boz) (5:10)

I started a blog in 2004. It's what people did in the mid 2000s.

Tracey Alloway (5:14)

The golden age of blogging.

James Bosworth (Boz) (5:16)

Exactly. It's sort of coming back now with Substack. It's exciting. So I started a blog in 2004 about Latin American politics, and I've been writing ever since. Now 22 years. I migrated to Substack, I think, back in 2018, and really the newsletter is the main focus of my world right now. I publish almost every day for subscribers, and that's where I've come to focus. I studied abroad in Chile in college, and I've lived in Nicaragua, Mexico and Colombia. And I've traveled to the entire region except for Venezuela and Cuba. For some reason, I can't make it

Joe Weisenthal (5:47)

to those countries one day.

Tracey Alloway (5:49)

What does it mean to actually be a Latin America expert? Because this is one of the things I struggle with whenever we do, and we don't do them that often, but when we do these Latin American episodes, it's very tempting to talk about the region as, like, this monolith. And I wonder, is there an actual through line that you can identify through all these different countries, or what does it actually mean to say you are an expert on this particular, very large region?

James Bosworth (Boz) (6:12)

Yeah, no, I cover the whole region, from Mexico to Argentina. And it is hard because every country has its own story, its own niche, its own issues, its own accent. And to that end, it can be difficult to deal with the region as a whole. One of the things I've seen just in the last now 14 months is this sudden shift by the United States. The United States has never mattered more for Latin American politics domestically. I mean, United States has always been this regional hegemon that has overshadowed the region. But Latin America was often ignored by the United States. And all of a sudden we have a Trump administration that has made the Western Hemisphere its focus. And you have this with the Shield of the Americas conference he did. You have this with the map that Pete Hegseth published last week showing great North America going all the way down to Colombia and Venezuela. This sudden focus where the Trump administration is trying to find a through line has suddenly dropped everybody who has been a Latin America expert into the spotlight that we've never seen before. I mean, we were always the backwater as everyone dealt with the midd or dealt with Asia. And now we have a Trump administration that actually really does care, except when they get distracted by Iran.

Joe Weisenthal (7:20)

Am I wrong in my sense that setting aside the fact that, okay, the U.S. is maybe pivoting more towards its literal backyard, although apparently not. There are a lot of iconic LATAM leaders right now and each seem to have a lane. And what's interesting is you hear over time, it's like, oh, there's going to be a pink wave in Latin America or blue wave, whatever. There are really many and they all seem quite distinct to me and they all seem like serious, like political powerhouses within their countries.

James Bosworth (Boz) (7:49)

I think we have seen an interesting wave of leaders and you'd reference there the Pink tide, right, which, which occurred in the 2000s. You had Hugo Chavez and Lula de Silva in a whole wave of left wing sort of leaders, some of them democratic, some of them autocratic. And you then get a shift towards the center and towards the right and then back towards the left. And now we're back towards sort of a pivot to the right. But it's a pendulum. It goes back and forth over time. And the thing with the Pink tide in the 2000s was there was a clear divide between Hugo Chavez and Lula da Silva and the autocrats and the Democrats. And today we have divides within these right wing leaders. I've called it the orange shift, right? The leaders who have aligned themselves with Trump over time. And you have this Bukele is a security populist. You have Milei, who's more libertarian and focused on austerity. You have a group of them who are technocratic and actually quite, quite good at what they're doing. Abenader in Dominican Republic is doing an amazing job. And you have a group that is sort of populist and wacky in their own way. And I think Jerobosonaro, the former president of Brazil, his son Flavio is now running for office. You know, sort of fits that mold where he, you know, he tried to model himself very much on Donald Trump and that sort of right wing populism that exists. And so you do get these. Even though there's a shift to the right and there will be a shift back to the left, it's a pendulum. You do have a sense here that that there's a division within this group. They're not all a monolith.

Tracey Alloway (9:08)

So when the US went into Venezuela, how did that end up, I guess, affecting some of these previous Trump alliances or existing Trump alliances? How did leaders actually react to that?

James Bosworth (Boz) (9:21)

They were surprisingly supportive of the operation. And actually Latin American citizens going to the Bloomberg Atlas Poll, that was published. The Latin American citizens were relatively positive about it as well. The thing is, nobody liked Nicolas Maduro. He had stolen the election in 2018, he had stolen the election in 2024. He had generally burned the entire left in terms of their support for him over time, and the right had never liked him. So everyone was happy, both leaders and citizens, to see Nicolas Maduro gone. Delsey Rodriguez is hard for Latin America to understand now because she was around before Nicolas Maduro. She was one of the five most powerful leaders in Venezuela for the decade prior to Maduro's removal. And she was, I don't want to say moderate. She's part of the corrupt elite. She trafficked in drugs, she stole billions of dollars, she's put people in prison. But she is more moderate compared to Nicolas Maduro or Diaz Dalcabe or some of the other Chavistas who are out there. And she is pragmatic. She's always been willing to cut a deal with anybody, and she's cut this deal with Trump to maintain power in Venezuela in a way that sort of defies what was the US Policy previously, which was attempting to get to some sort of removal of the Chavistas and democratization in Venezuel. So I think leaders across the spectrum are having a hard time viewing how they should understand Delsey Rodriguez. At the same time, they also see an opportunity because they know if Delsey Rodriguez can cut a deal with Trump, then anyone can cut a deal with Trump. And so Delsey Rodriguez has shown the benefits of cutting a deal with Trump and also what the costs are if you defy him in terms of what happened to Nicolas Maduro. And everyone having seen that, is now going to move forward, understanding that and trying to cut new deals with Trump.

Joe Weisenthal (11:05)

I definitely want to talk about these new deals with Trump or the sort of ripple effect effects of this action. But one thing that strikes me as interesting about this, and maybe a novelty, is that leaving Venezuela under the control of Delsey does not strike me as like probably what the Venezuelan diaspora would have wanted. Right. I imagine going back there is sort of this clear idea that we want to go back to the pre Chavez era. We want to have something that looks more democratic and liberal, et cetera. This seems to be Trump's modus operandi, which is like he doesn't like a lot of the same people that they don't like and whatever. But it does not seem particularly important to him that it's like they now quickly hold fair elections and so forth. And this seems like sort of Is this a novelty or is this sort of standard MO with respect to US Foreign policy in Latin America?

James Bosworth (Boz) (12:02)

That's a great question, because in some ways it is the old MO of how the United States operated, right? If you go back to the 1950s, 60s, 70s, you know, the Kirkpatrick Doctrine, in the 1980s, the US was happy to have its friendly dictators who they backed. And so Trump is sort of pushed back at times to previous eras. You know, he's looked back to the Teddy Roosevelt era and the Roosevelt corollary to the Monroe Doctrine. He has looked at the 70s and 80s and US support for various dictatorships as a positive effort for US influence in region. It does strike back to your question about the Venezuelan diaspora. This is not necessarily what they wanted, right? They want a return to democracy. And there are people out there waving their hands in the air and furious at the Trump administration. But most of them are pretty happy. And they're pretty happy because they've seen change in Venezuela, right? You have new problems in Venezuela. New problems are better than being stagnated under the Maduro regime. And to that end, they understand that this is a process and it's going to take time. So people are holding out hope that there will be some sort of transition. The question is how long. And I think this goes to a challenge with the Trump policies versus the Delsey policies. Marco Rubio has laid out a plan which is stabilization, recovery, democratization. But Delsey Rodriguez has an unwritten plan which is stabilization, recovery, consolidation of power. Those first two steps are the same. It's just in the third step they diverge and we don't know which plan we're actually following right now. Are we following the one towards democratization or the one towards consolidation of power? The the Venezuelan diaspora is looking for how to handle this question. And if they get to democratization, that's where they're happy. But they understand it's going to be a process. Introducing Fidelity Trader plus, the next generation of advanced trading from Fidelity. Customize your tools and charts and access

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Tracey Alloway (15:29)

Okay, so if we fast forward to today, April 7, have things changed in terms of the perception of the Trump administration in Latin America, given the situation in Iran, where higher oil prices would be expected to push up prices for a lot of Latin American countries? And again, I realize, not talking about a bloc of completely similar countries, some of them are oil exporters, some of them are importers. Are things changing now?

James Bosworth (Boz) (15:56)

Things in Latin America are changing. I don't think that the average citizen points to the Trump administration as the reason to blame for prices increasing. But take Chile, for example. Jose Antonio Cost is the new president in Chile and just came into power a month ago. He's already seen a drop of 15 points in approval rating. He was sitting about 55% when he was inaugurated. Today, he's closer to 40%, according to multiple polls. And that's points to the problem of rising diesel prices in Chile and the fact that he has refused to subsidize those fuel costs across Latin America. Rising costs matter to the population. I mean, they matter here. You feel inflation in the United States, but when you live in a poorer country, you spend a larger percentage of your family's income on rent, transportation, and food costs. And so when you see rising transportation costs and rising food costs, all of a sudden people feel the suffering more. And so you're seeing leaders across all of the political spectrums face a challenge in terms of politics. You're seeing Gustavo Petro in Colombia, who there's a Colombian election coming up in a few months. They face a problem. Javier Milei's approval ratings are down below 35%. I mean, all of these leaders are facing problems. They don't blame Trump for it, necessarily, but it's clearly partially Trump's fault for having gone to war with Iran and had the Strait of Hormuz shut down.

Joe Weisenthal (17:10)

It seems like a global phenomenon that basically you get elected and then your approval Rating starts to plunge. Sheinbaum's holding up well. Isn't Mexico sort of the exception here? And isn't she still fairly popular like a year or whatever after the election?

James Bosworth (Boz) (17:24)

Yeah, there are a few leaders who are holding up well. Two worth talking about are Sheinbaum and Bukele. So let's talk about that. Let's start with Sheinbaum. Claudia Sheinbaum is still sitting somewhere in the mid-60s according to approval.

Joe Weisenthal (17:35)

It's extraordinary in like a modern democracy.

James Bosworth (Boz) (17:37)

And Andres Manuel Lopez Obrador, her predecessor, spent most of his time in office well above 60% approval as well. Part of it goes to the economic support, support that she has provided. Her political base and the Morena party is built around a system of economic support that looks a lot like the old pre in Mexico from decades in the past. But she's also, you know, she's taken the populism that Amlo her predecessor had and moved it towards a technocratic management in which you've actually seen security improve inside of Mexico. Despite all the images of violence the day El Mencho was killed, Security has improved over the last year while she's been in office. And, you know, the economy is still meandering. The economy is not growing strong, but the economy in Mexico hasn't grown strong for 20 years. So this isn't a new phenomenon that she's facing.

Joe Weisenthal (18:22)

And then what about Bukele? You said he's the other one whose popularity has held up.

James Bosworth (Boz) (18:26)

Yeah, his popularity is probably in the 60s or 70s. Nayib Bukele came into office and cut a deal with the MS.13 to reduce the amount of violence in the country. He's also implemented a monodora policy. It's led to the arrest of 2% of the adult population. He has cracked down on his political opponents. He sent the military into the Congress. He has arrested civil society leaders, arrested political opponents. But there are places in San Salvador today that you can walk that you could not have walked 10 years ago. People are very appreciative of the security improvements in El Salvador, and for that reason, Bukele's approval rating has held up. Despite all of the potential criticisms, Bukele does have a weak spot. It's the same weak spot as everybody. It's the economy. The economy in El Salvador is not growing. He's not getting the foreign direct investment that you would think. For years people said if you could only fix security, then investment would flow into a country like El Salvador. The security is fixed under Bukele and investment's not flowing and part of it's that Bukele did this via corrupt deals and a mano dura policy. He hasn't done this via rule of law. And if a leader can arrest 2% of their adult population, they also don't have to follow the contracts that they sign. And private businesses just don't trust Bukele to be a good leader as a place they should invest.

Tracey Alloway (19:43)

If we go back to Del C for just a second, one thing that it feels kind of hard to ascertain as an outsider is like, is she actually aligned with Trump, or is she just very good at sort of being strategic in her dealings with him?

James Bosworth (Boz) (19:56)

You know, she is a person willing to cut deals with everybody. In some ways, she's like an AI. She just agrees with everybody when she talks to them. And so people, for years prior to Maduro's removal, there were oil companies and Venezuelan debt holders who would say that they had a source inside the Venezuelan government. It was always Delsey. And they'd be talking to her and she'd be telling them everything that they wanted to hear. She's telling Trump everything he wants to hear here. In some ways, she must just be a pragmatic politician and she's playing the odds correctly. And yet I have to say, she's aligned because no leader has given Trump more at this point. Venezuelan oil is sold via US Companies and routed via US Government bank accounts. And then the US Government sends a monthly payment to Delsey Rodriguez and her government. The fact that the US now controls Venezuela's oil is a callback to colonialism. In some ways, it's a shocking development. And so she is aligned because she's going along with this scheme and it's benefiting her, and she's clearly. Her government is making money on this.

Joe Weisenthal (20:59)

That's pretty extraordinary. I didn't quite realize what the arrangement was. Trump perhaps had this fantasy that Iran would be as easy as Venezuela. Top guy disappears suddenly the next. It clearly has not gone like that at all. And what I'm curious about was, like, by the end of the Maduro era or regime, had any sort of ideological, like, the revolutionary ideological impulse? Had it just sort of completely given way, in your view, to this sort of what, you know, what people would call a corrupt gangster state, such that there was nothing left worth fighting for, like, ideologically at that point.

James Bosworth (Boz) (21:40)

I mean, nothing worth fighting ideologically, but lots to fight for in terms of resources.

Joe Weisenthal (21:44)

Well, that's what I mean, though. Right? But, like, I'm not an expert on Iran at all, but I think it seems like the people we've talked to believe, like, no, there are quite a number of people seriously invested in Iran's ideological project and the post revolutionary impulse and so forth. By this point in the Maduro regime, is it all just basically everyone sort of out materially trying to their personal spoils?

James Bosworth (Boz) (22:11)

There are far fewer ideologies.

Joe Weisenthal (22:14)

They're still like real, like socialists and like who, like, there are very few

James Bosworth (Boz) (22:19)

of them at this point. The people who used to consider themselves left wing Chavistas, many of them voted against Nicolas Maduro in the 2024 election. If you look at the voting results coming from the poorest neighborhoods of Caracas, they still voted for amundo Gonzalez in 2024. The people who used to be Chavistas turned on Maduro because Maduro failed, because it is one of the biggest economic collapses in history. And, you know, people went hungry for years due to lack of food. And so there are people who remain ideologically left wing, but they're not part of the government anymore. And to the extent that there are any of them in the government, they're lower players. They haven't played the political game to move up the ranks. And so it's basically gangster versus gangster or an alliance of various mafia groups within the government, you know, Delsey Rodriguez controlling one and potentially right this moment, the strongest sphere of the groups within this administration.

Tracey Alloway (23:15)

I want to go back to something you said earlier on the orange drift in general and the idea that leaders don't blame Trump for a rise in oil prices, which I kind of get, I can't imagine that it would be politically beneficial to say something outright that the spike in energy prices is due to Trump, but for the general population, why don't they draw that connection between Trump and a higher cost of living

James Bosworth (Boz) (23:43)

for most of Latin America? Despite what I said earlier about the fact that US Politics has become critical for all of Latin American politics. If you're an average voter in Chile, Brazil, Argentina, Colombia, Mexico, you aren't thinking about the US Every day. You're thinking about your bread and butter issues. And to that end, you always blame all politics is local, and you blame your local politicians for what is occurring. And so I don't think that people have necessarily made the big narrative leap between what Trump is doing, Trump's alliances with various leaders in their countries, and the cost of living going up. But they do blame their own leaders for the cost of living going up. Whether or not it's their fault, they get the blame. That's just traditional politics in Any country and how it functions.

Joe Weisenthal (24:29)

We haven't really talked about Brazil yet, but I'm looking at a chart on the terminal. And the misery index, sort of a crude measure, is just add the unemployment rate to the inflation rate. The Brazilian misery index is basically like at the lowest in, I think, over 20 years. Inflation seems very mild, and the labor market is very solid. Probably counter to some of the fears, like, okay, the socialist is coming back, or the left wing populist. I don't know. How does Lula himself characterize his ideology?

James Bosworth (Boz) (25:00)

Lula was always a socialist, right? He was a union leader. He fought the dictatorship in the 1980s.

Joe Weisenthal (25:06)

Yeah, things seem to be going very well.

James Bosworth (Boz) (25:09)

There they are. And I mean, every time Lula has been elected, markets have panicked. If you go back to his original election in 2002 and his reelection in 2006, markets panic when Lula gets elected. And if you had put an investment down on the day Lula was inaugurated in any of his three terms so far, you made money. Brazilian markets have done very well under Lula, and he has defied expectations every time. And yet the Brazilian markets hate Lula da Silva, and they are convinced that he is the one who is going to take down their government. But as you said, inflation is reasonable, employment is up, and they just had their most secure year in 10 years in terms of public security, in the amount of crime and homicides. He's had a very successful eleven and a half years in office across three terms. And yet markets are convinced that this time is different. And if he gets reelected this year, something's going to go wrong. It just just seems unlikely. He's constantly defied expectations.

Joe Weisenthal (26:05)

So there is that. Flavio Bolsonaro's like, how is his political popularity? Are the polls vindicating the strong economic

James Bosworth (Boz) (26:13)

situation for him at the moment? Flavio Bolsonaro is gaining in the polls, and Lula has seen a small drop in the polls in recent months. But, you know, part of this relates to various scandals. It feels like every time Lula comes up for election, there is some sort of scandal. In this case, there's what's called the Banco Master scandal. But various corrupt officials got. Various officials were bribed by various businesses. This has happened every time Lula has faced an election, and once again, he's going to have to dig himself out of this hole. And yet, as the expectations for Lula's reelection have gone down, if you look at where polymarket is, it's down today versus six months ago. Six months ago, I thought Lula could be beat by a real candidate. Lula has received the election that he wants. He has a two way race between himself and Flavio Bolsonaro. He couldn't ask for a better opponent. And Lula has proven to be a great politician in the past. So this is the election that he wants. And I think my belief is that he's much more likely to be reelected than not.

Tracey Alloway (27:10)

Wait, so Lula is like, he's sort of starting to make some noises about imperialist America or like colonial ambitions on the part of the Trump administration. Does that strategy land at all domestically within, like Brazil?

James Bosworth (Boz) (27:25)

Lula is an old school leftist. And to that end, Lula is always going to criticize the United States for various colonial ambitions and how the United States treats Latin America. He's done this for his entire career,

Tracey Alloway (27:38)

but now he might have a case just throwing that out there.

James Bosworth (Boz) (27:41)

Well, part of it was Lula has criticized Trump for years and then they went and hugged it out at the UN late last year and they've had some phone calls and they've gotten along better and now they're not getting along as well anymore. The Brazilian population doesn't care, right? I mean, in general, the old Cold War narrative of how the left versus the right function, it's not where people are voting. One concern here is that the Trump administration is targeting Brazil's financial sector, right? They've put tariffs on Brazil. There's a Section 301 investigation on pics, which is one of the most innovative financial transfer systems in the world that Brazil's central bank runs. And 93% of Brazilians use pics. It's used for about half of all financial transactions in Brazil. And so it's possible here that they don't care about Trump's colonial ambitions in Venezuela. But if Trump hurts Brazil's economy by attacking picks or by putting tariffs on certain issues, that will play well for Lula and that could be a benefit for his election. Across recent elections, a lot of candidates have received a Trump bump, right? Trump endorsed the Asfura, the candidate in Honduras, and he ended up winning. Brazil is the one country where it may not work for Trump, where he actually, you may see an anti Trump bump because of the way that Trump is attacking Brazil's economy. Brazilian voters are going to feel that in their pocketbooks and it's going to cause them to push away from Flavio Bolsonaro.

Joe Weisenthal (29:01)

What is Bolsonaro's, who's his base? Because looking at the poly market, it is very close. 42 to 38% odds so it's like kind of a coin flip, but like what is the core base of the Bolsonaristas is.

James Bosworth (Boz) (29:14)

So they have a couple different bases, but evangelicals are a core base, as is agribusiness. They also have a core base. You know, Brazil, like any large country and Brazil is huge, right? Has various geographic bases. Their base is much more in the south of Brazil versus Lula's long term base has been in the northeast of Brazil.

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Joe Weisenthal (31:24)

You had a piece several months ago about bukhilification and. And to what degree are we seeing this being replicated? This extreme strongman anti crime? You mentioned that the security situation in Mexico has improved, but that's clearly a very different model. It's a very different thing. To what degree is this spreading? It's like people or countries willingness to sort of sacrifice democracy and other things for a very meaningful change in the crime situation.

James Bosworth (Boz) (31:58)

First off, lots of leaders wish they were naive Bukele because every leader wishes they had 60 or 70% popularity, right? And so. And so a lot of political leaders have looked towards Bukele and Bukele's security populism as a model for how to run for office. And it has succeeded. Right? Daniel Noboa was elected in Ecuador based on a security populism message. We've saw in Costa Rica. President Fernandez, who's going to be inaugurated soon, won in part on a security populism message. She brought Bukel into the country and there was an event with Bukele during the campaign. And yet El Salvador is tiny. El Salvador is smaller than the Mexican city of Chiapas, and it's a very small population. And it's hard to replicate what Bukele did, both in terms of the huge number of arrests as well as the deals that he cut with the one very large gang in MS.13 in a country like Ecuador where there's 22 different gangs and a much larger population. And so Daniel Noboa, we've seen crime go up and we've seen Noboa's popularity go down despite a security populism effort, despite bringing in U.S. special forces to help target the cartels in Ecuador. It's not working. And so while it works as a campaign strategy elsewhere, it has not worked in terms of a security strategy wherever it's been implemented by politicians.

Tracey Alloway (33:10)

I want to step back in history for a second because you mentioned the Monroe Doctrine earlier, and Joe and I have gotten into disagreements in our daily newsletter, which everyone should subscribe to, about whether or not a Trump corollary to the Monroe Doctrine, the Don Roe Doctrine, and actually exists. I mean, I think he clearly has some ambitions on the region, which have been in full display since Venezuela and might be even more apparent if Cuba comes into his sights next. But what's your take on the Trump administration's, like, ultimate ambitions towards this particular region?

James Bosworth (Boz) (33:48)

There's a few points here. One thing, if you look at how the Trump administration functions, I've never seen a US Administration function in a way where I'm doing the individual level of an analysis, where I'm having to pick through what does Pete Hegseth think? What does Marco Rubio think? What does J.D. vance think? I never, during the Biden administration, had to ask what Kamala Harris thought versus what Secretary Blinken thought. That was never an issue. And so having to pick through the various individual pieces of the Trump administration and what each person believes and what aligns them and where their disagreements are is a fascinating exercise that I did in Venezuela when I looked at Delsey Rodriguez and Nicolas Maduro and Diesel Cabello. I never had to do this with the United States until now. But what aligns them in part, part is every single one of them believes that they're at war with the cartels. And so they are convinced that military power is necessary to defeat the drug cartels. Now, this is not the best idea, but it is something that every single one of them believes. And so they are going to war with the cartels, and they're bringing together any leader who is willing to use military power to target the cartels as part of their agreement. The other thing that unites them is Donald Trump. And whatever Donald Trump, Trump decides. And this is why I don't think there's a doctrine, because Donald Trump is very much focused on how Trump gets along with Milei, how Trump gets along with Bukele. It's a person to person relationship, not a state to state relationship. And so when the next president comes to power, whether Democrat or Republican, and they ask themselves, what would Trump do? Well, I mean, tweet something out at 2am, but it doesn't really tell you what direction Trump would go in. In a lot of cases, it's all about his individual deals and relationships with these presidents. And so there's no doctrine, there's no direction moving forward for a future president to follow necessarily.

Joe Weisenthal (35:34)

This is really interesting. I forget who said it. There's versions of this conversation that are happening with regards to Europe, and they're like, okay, do we just have to wait out a few more years? Then we go back to the old United States we've known for a long time, is there permanent rupture, et cetera. But it is interesting to think about all of these conversations, the degree to which the US Is going to be a partner for military force and fighting the cartel, etc. Like, this just might not exist, like, in three years or whatever the election is. And so, like, to some extent, as you say, like, none of this is like, real planning, is it?

James Bosworth (Boz) (36:11)

No, it's very much. It is on Trump's whims on any given day, plus, whatever.

Joe Weisenthal (36:15)

And it's like the. This is the part that other people say around the world is like the entire world is essentially trying to plan for the future by guessing, like, what a few hundred thousand people in Michigan and Iowa and Wisconsin are going to vote one year each year.

James Bosworth (Boz) (36:31)

But one of the big differences between Latin America and the rest of the world here is that you have had this orange shift in Latin America. You have this group of leaders who have allied themselves with Trump and formed a bloc or a coalition. They all showed up in, in Florida, a few weeks ago for the, for the Shield of the Americas conference that Trump put on because they canceled the Summit of the Americas conference that has gone on for decades. And so these leaders have aligned themselves. But this shift in Latin America has a drop dead date. It ends in January 2029 when Trump leaves office. And it's not clear what replaces it when it goes away.

Tracey Alloway (37:07)

Well, okay, on that note, 2028, assuming that Trump doesn't get a third term or find some way to get a third term, what happens to all of these alliances?

James Bosworth (Boz) (37:18)

Well, I think we're already gonna start seeing that shift to the pendulum again, again. Right. Latin America has gone back and forth from left to center to right and back over and over again across decades. And Latin America is going to already be shifting back by 2029, 2030, and we're going to see an election cycle where these leaders start losing power not because they are allied with Trump or not allied with Trump, but simply because that's how the political pendulum plays. And we are in a fairly long term anti incumbent cycle, both in Latin America and in much of the world. And so I don't expect these leaders to last in either event. But it's not clear what follows. I think it's really important for US Policy. If Trump has done one thing right, it's the focus on the Western hemisphere. I actually, I've always wanted to see a focus on the Western hemisphere. And I would be really excited to see a future US Administration play out what it looks like to focus this much on the Western hemisphere, but do so with a more benevolent take in terms of using the military force a little bit less and trying to, you know, improve people's lives a little bit more.

Tracey Alloway (38:20)

Well, this is the other thing I want to ask you because at the very beginning of this conversation, you talked about how we're at this moment where America actually seems to matter for much of the Western Hemisphere. And that wasn't necessarily the case for some time previously. Why do you think that? I guess retreat from the region in some sense happened.

James Bosworth (Boz) (38:38)

I think that for the United States, Latin America just wasn't quite the same priority. And we were worried. I mean, there was a global war on terror where we found ourselves in the Middle east and South Asia. And then there was this pivot to Asia because we do see a rising China. And to the extent that we focused on Latin America in the 2000s and the 2010s, you know, across the 2000s, there's this whole issue of what's going on with Al Qaeda and Hezbollah in Latin America. And then across the 2010s and early 2020s, it's, oh my gosh, China is in Latin America and we really have to. But Latin America was always placed in context of whatever the other geopolitical issue of the moment was, and it was unfortunate. We should have been focused more on Latin America as a region, not as a competitor to China or a source of potential terrorism, but because the region matters. No region in the world matters more to U.S. security and U.S. prosperity than the Western Hemisphere. Our alliance with Mexico, as well as Canada is critical to the future of the world. And we need to make sure that we get the USMCA negotiations right. Latin America is connected to the United States via populations, via culture, and we should be trying to boost that over time, not withdrawing from Latin America. So for that reason, I think it's incredibly important that whoever comes next next, you know, continues a focus on Latin America, but pivots a bit in terms of what the tone is.

Joe Weisenthal (39:55)

I'm glad you brought up China, because that's where I was going to go next. I have not done a lot of traveling throughout Latin America, but I did visit. I was in Guatemala a couple of years ago. My mother lives in Guatemala. And one of the things that I noticed, there are a lot of Chinese cars on the road. Not many BYDs, but even the electric ones, but some of the older models and they're probably quite pretty affordable. I imagine this is the case across Latam. I bet there's BYDs and others all over the place. I also know that China has made a lot of agriculture investments in Brazil specifically, and that there's a lot of trade going on and maybe they're probably going to buy more soybeans from Brazil, et cetera. But on the other hand, you think about some of the economic stagnation that say, Mexico has experienced, it seems at least plausible that part of it is the sort of of re reshoring of industrial activity that might have gone into Mexico going into China. Instead there's this conversation that happens in the US and Europe. It's like, oh, is China going to eat our industrial lunch across anything that we had strengthened? How much is that conversation happening in Latin America where it's like, okay, maybe it's a good trading partner, et cetera, buy cheap cars, but also this fear that their industrial development is going to be stymied in some way by the powerhouse of. Of. I remember I had a cab driver in Mexico and he was complaining that sombreros were made in China. Now, et cetera. How much anxiety is there around that?

James Bosworth (Boz) (41:22)

I think there's a lot of anxiety. China is the number one trade partner for most of Latin America, not for Mexico, but for most of Latin America. But China buys Latin American commodities, they buy soy and pork from Brazil, they buy copper and iron from Chile and Peru. China buys commodities and they buy, push back cheap goods that undermine any effort by Latin America to move up the value chain. And in some ways this is historical. This is the model that Spain implemented in Latin America in the colonial era. It's how the United States treated Latin America throughout the 20th century. And in many ways, China is just speedrunning all of the errors that Spain and the United States made, but in a much shorter timeframe across a few decades in the 2000s. Now, I think that Latin America has some real concerns in terms of, of China pushing cheap goods into Latin America and not really providing the technology transfers, not really providing the skill sets necessary for Latin America to boost its own economies. It's fantastic for Chile's economy that China buys all of this copper and yet Chile would much rather sell China tech goods. And so I think that there's an element here in which Latin America knows that China is necessary for its markets and Chinese investment. So to go to a slightly different point here, Chinese investment in Latin America, when they've gone and done infrastructure investment, there have been failures in terms of the dam that they built in Ecuador is full of cracks. And when they go and they invest in some of the construction projects, they bring their own people in. So it doesn't necessarily provide as many jobs for Latin America as it should. So Latin America definitely sees the negative, negative impacts of Chinese investment. China's a reality. I mean, China is going to be buying goods from Latin America because Latin America provides those goods and China is the market. So there's no way that China doesn't interact with Latin America. But figuring out how Latin America can have more fair trade with China is incredibly important for the region. And from the US standpoint, we're not going to push China away from Latin America. There's going to be a relationship between China and Latin America, but we should want a level playing field so that Chinese companies can't bribe their way into public contracts and so that Chinese infrastructure projects don't undermine the region, region's infrastructure and energy grids. And so there are ways that we can push for better behavior from China without thinking that China is going to be blocked out from the region.

Tracey Alloway (43:43)

I realize we mentioned Cuba at the top of this conversation, and we haven't really dug into it very much, but actually I just learned before we started recording this episode that you're a certified superforecaster. So I feel like I should be asking you questions in odds to probabilities. Yeah. All right, so odds on regime change

James Bosworth (Boz) (44:01)

in Cuba, so I would say odds that Cuba finds itself aligned with the Trump administration, which is a little different than regime change, are close to 70 to 80% right this moment within the next 12 months. Now, I think that the Trump administration will want to see Diaz Canel leave power because they're very focused on the person on top and they're going to want to head on a pike to show that they got some sort of what Trump would call regime change. I don't think the Cuban Communist Party is going away way in this. Right. We're going to see a deal that's very similar to Venezuela in which the people who are empowering Cuba are largely the same people who are in power today, but they decide to work with the Trump administration. One of the long term trajectories in Cuban history here is the fact that Cuba has always had a patron to help them, to help rescue them from U.S. sanctions. Right? So it was the Soviet Union during the Cold War and it was Venezuela during the 2000s. All of a sudden, imagine the US is going to be the savior for Cuba from US sanctions. Trump is using US sanctions as a coercive tool to force Cuba to cut a deal with the United States. And arguably he's going to be successful. This is a much easier operation than Iran in many ways because the Cuban regime is corrupt and because the Cuban regime, I think, is eager to cut a deal to help rescue their economy and make sure that they can maintain power and they don't just preside over a failing state.

Joe Weisenthal (45:24)

State Milei. We haven't talked about him. Has the libertarian miracle happened? This is one of these things where I don't ever read on any of this, but I see people who are like hardcore Milei stance. They say, look, inflation is absolutely plunged. Which measures of inflation do seem to have collapsed. And then you have others say, oh, but it's because they're just burning through their reserve balances and it's unsustainable, et cetera. To my mind, setting aside inflation metrics, the question is like, will Argentina improve as like a place where people want to invest and do business? Which is slightly adjacent. But what's your read on the success of the Milei project?

James Bosworth (Boz) (46:03)

Milei is being graded on a curve in the sense that when he came into office, inflation was 200%, and now inflation's down to 30 to 35% at the moment. It's good.

Tracey Alloway (46:15)

Everything is relative.

James Bosworth (Boz) (46:16)

But 35% inflation is insane. Insane, right? I mean, it means that you have no reason to save money. And it's not. Despite some predictions that it may get down to 20 or 25% this year, given the Strait of Hormuz crisis, we're much likelier to be closer to 40 or 45% than we are to 25% by the end of this year. Milei has managed over the course of the past few months to increase foreign reserves a little bit. He's gained the past four months. You've seen a pop in foreign reserves, but that comes from an amazing agricultural season that they've had.

Joe Weisenthal (46:49)

Yeah, I mean, this is like what I want to get at, which is like, I'm sure we could record hours and hours of episodes on what is the deal with Argentina? And I know there's a lot of what is it about Argentina's economy that. What a weird situation. But setting all that aside, and I don't want to have that debate right now, it's like whatever that pathology is that seems to create all these issues that span decades, has he changed the political economy of the country in such a way that it could resemble a sort of moderately wealthy Latin American economy that people aspire it to be towards?

James Bosworth (Boz) (47:27)

I think this is where politics overrides economics in the sense that Milei is reveling in the fact that he lives in this polarized society, and he gets to point at the Peronists who are the people who have crashed Argentina's economy multiple times as this big threat take power, Argentina will crash again. And he's basing a lot of his political support on how awful his opponents are. Unfortunately, what investors fear is the Peronists coming back to power. And so Milei is hyping the one thing that could cause Argentina to crash again. As soon as the Tinkerbell effect stops and people stop clapping and believing in Milei and think that the Peronists might come back to power, Argentina's economy will crash. This is what we saw in 2019 when Macri was president and then the Peronist Sudd won a primary, all of a sudden Argentina's economy plunged, and then the Peronist managed to win the election because the economy was bad. We could see a repeat in 2027 of what we saw in 2019. Malay's popularity right now is below 35%. As soon as people think the Peronists might come back to power. It's not going to go well for Argentina's economy, which means it's not going to go well for Malay. Argentina needs a sustainable economic agenda that crosses political parties. As long as everyone thinks, oh, this party could be the part party that saves Argentina and this is the party that destroys Argentina. But we live in a political pendulum that goes back and forth. Argentina's economy is going to continue a boom bust cycle. And so we are in the boom part of a boom bust cycle right now. But nobody should mistake that for not being part of within that boom bust cycle.

Joe Weisenthal (49:00)

This whole democracy thing, I don't know, it seems like a real problem wherever you look. Us too. It's like you can't plan for anything. No, I'm joking. I think democracy is a pretty good system. Boz, thank you so much for coming on. Odd lot. Big fan of your work and really appreciate you chatting with us.

James Bosworth (Boz) (49:15)

Thank you so much for having me.

Joe Weisenthal (49:28)

It is really weird, Tracy, like, how little attention, generally speaking, Latin America always seems to get, both in sort of media and political discourse in the U.S. no, absolutely.

Tracey Alloway (49:42)

And it's interesting, I guess, to see that starting to change now. I don't know, it's so hard to talk about because you have to go on a sort of country by country basis.

Joe Weisenthal (49:49)

I know, it feels like. Where should we start Now? Let's talk about Milei. What's up with Lula? How's he doing? Yeah, I know.

Tracey Alloway (49:55)

I mean, the broad theme does seem to be this orange shift, as Boss was pointing out in this idea of like, like delsification of the entire region. I still think there is a don Row doctrine in the sense that like, Trump wants a lot out of the region and if he has to, like, take it by direct ownership versus, like work out a specific deal with a leader, like, the outcome is kind of the same.

Joe Weisenthal (50:20)

You know, I think the issue, and it's somewhat related. So obviously there's, you know, we all know it. There's going to be at some point where Trump isn't president and no one knows what the future future holds beyond that. There also is this broader thing. Even if you just look in U.S. domestic politics, where, because there's a lot of paralysis in American politics, you have a lot of lawmaking essentially via presidential orders or whatever, and then those can immediately be ripped up on the very next day. And so I do think there's this real issue of durable policy that expands beyond any president, both on the foreign policy realm, but then also even on the domestic policy realm, because the idea of what is the US Aspire for its relationship with Mexico to be long forward strikes me at this point, such an abstraction, beyond which I think US politics is capable of seriously discussing. The idea of having a cogent framework that stands any sort of test of time just seems like too much of a lift for US Politics right now.

Tracey Alloway (51:28)

Well, I was also thinking it was interesting when Boz was talking about, like, having to apply sort of a Venezuelan framework of political analysis to the current Trump administration, where you're going on a person by person basis to try to identify what each of them wants and who holds the most power to actually make it happen.

Joe Weisenthal (51:45)

Yeah. You know what it is? It's sort of like. I think there's one way to think about the Trump administration. I'm gonna sound like a chatbot where it like brings. Where because it has a memory of the user, it's gonna bring in something very arbitrary, but it reminds. It's a little bit like the pod shop model. Right. Where you have a lot of different players.

Tracey Alloway (52:04)

I do not expect you to go there.

Joe Weisenthal (52:06)

Okay. Right. And they're being re. They're allocated political capital in real time based on whether they have the hot hand. And sometimes they get shown the door really quickly. And some, you know, it's like you hear these. See these reports about how like Bill Pulte, the head of the fhfa, is behind the. These subpoenas of people on the fomc. Why is this the domain of the FHFA secretary? It's very strange. It's a very odd situation. But for at any given moment, someone in the Trump orbit has that political capital that they have been allocated. They're perceived to have the hot hand or whatever. Trump likes them, and so then they get influence on all kinds of things. And it feels like. I don't know where I'm going with this, but to Boaz point, it's like what you really do have to pay attention on the member by member level because they are rising in power. And who has the influen as the ear In a way that does seem somewhat novel.

Tracey Alloway (52:57)

No, I. I really like that analogy, actually. And I guess the risk, like as in any pod shop, is that people, like, kind of go off and do their own thing without an integrated risk management system that kind of oversees all of it.

Joe Weisenthal (53:11)

Yeah.

Tracey Alloway (53:11)

All right. Shall we leave it there?

Joe Weisenthal (53:12)

Let's leave it there.

Tracey Alloway (53:13)

This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me raceyallaway and I'm Joe Weisenthal.

Joe Weisenthal (53:20)

You can follow me at the Stowaway. Follow our guest James Bosworth AKA Boz. He's at Bloggings by Boz. Definitely check out his newsletter Latin America Risk Report. Follow our producers Carmen Rodriguez at CarmenArman, Dash O' Bennett at DashBot, and Kale Brooks at Kale Brooks. And for more Odd Lots content go to bloomberg.com oddlots we have a daily newsletter and all of our episodes and you can chat about all of these topics 24. 7 in our Discord Discord GG and

Tracey Alloway (53:49)

if you enjoy Odd Lots, if you like it when we go on tours of Latin American politics, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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