As the US pivot to the Western Hemisphere accelerates under the 2025 National Security Strategy, geography, critical minerals, and nearshoring are reshaping the future of regional security and economic integration.
The US National Security Strategy (NSS), released in December of 2025, identified the Western Hemisphere as a top priority, marking an important change compared to the 2017 and 2022 strategies. The introduction of the Trump Corollary to the Monroe Doctrine in the 2025 NSS describes an “enlist and expand framework” for the United States to build partnerships in the region. There is also a broad consensus in Congress on prioritizing the Western Hemisphere, as demonstrated during the recent hearings where Secretary Marco Rubio defended the Administration's FY27 Budget Request.
To better understand the strategic importance of Latin American and Caribbean (LAC) countries for US national security and how the US can move forward, we can examine three domains: geography, economics, and institutions. Not only is the geographic location of LAC countries of extreme importance to US national security, but their natural resource endowments are also strategically valuable. LAC countries are key players in supply chains and trade integration in the Western Hemisphere, making the region an important economic partner to ensure economic prosperity. Finally, LAC countries have an institutional framework for economic and security cooperation that is compatible with US interests, with opportunities for expansion to strengthen cooperation.
There is no other region of the world as important to the United States' security as the LAC region. Given the shared hemisphere and shared borders with Mexico, partnerships that acknowledge this strategic location are warranted. Three areas capture the geographic and natural endowment advantages of the Latin American region: ports, critical minerals, and agriculture.
One area of special interest is port infrastructure, with the Panama Canal and the Port of Chancay showing contrasting patterns. The US built the Panama Canal in the early twentieth century and operated it until 1999. The canal remains critically important for reducing transportation costs for goods flowing to and from the United States. The Port of Chancay, which opened in November 2024, was primarily financed by Chinese investment and is managed by the Chinese state-owned COSCO Shipping Ports. This port is central to China's Belt and Road Initiative, and Chinese goods account for 68-percent of imports that enter the port. Figure 1 presents the top 15 ports in LAC by container throughput. Notably, four of the fifteen ports are in Panama (MIT, Balboa, CCT, and Rodman).
While Latin America has long been known as a mineral-rich region, there is growing interest in its critical mineral endowment. There are 60 minerals identified as critical to the US economy and national security, serving essential functions in the manufacturing of products and being vulnerable to supply chain disruptions. Lithium is one of the most critical minerals in the current environment, given its use in electric vehicle batteries. In the lithium triangle, Chile and Argentina have the largest reserves, although Bolivia holds the largest identified resources. Figure 2 presents the share of global lithium mine production by country in 2024. Chile, Argentina, and Brazil together account for 33-percent of the total.
The LAC region is a major producer and exporter of agricultural goods, ranking as the world's leading net food exporter. In fact, the region accounted for around 15-percent of food exports between 2020 and 2022, with the meat and fish, oilseeds, and fruits and vegetables categories as the leading sectors.
In 2024, LAC trade accounted for 23-percent of total US trade in goods. While Mexico, China, and Canada remain the top three US partners (accounting for 40-percent of total US goods trade), Mexico has surpassed China as the largest source of US goods imports since 2024. This shift in trade is the result of the nearshoring phenomenon in supply chains that has developed over time in the hemisphere.
Mexico has become a top nearshoring destination, not only because of its shared border with the US and strategic location in the region, but also because of its low labor costs and the institutional infrastructure developed through USMCA. Mexico's nearshoring activity clusters in key sectors such as automotive, electronics, and aerospace. The relevance of Mexico as a nearshoring destination became even more relevant in the context of the US “Liberation Day” tariffs, giving Mexico an advantage with lower tariffs under the USMCA. While the US has the largest amount of Foreign Direct Investment (FDI) in Mexico, China has increased its FDI in this country to take advantage of nearshoring networks.
There is an institutional architecture for cooperation in the Western Hemisphere that has been in place for more than a century, comprising two major multilateral organizations. The Organization of American States, founded in 1948, has 35 member states. The OAS dates back to 1890, when the International Union of American Republics was established to promote peace, justice, solidarity, and collaboration. The Inter-American Development Bank (IDB) was founded in 1959 as a regional development bank, with the US as the largest shareholder.
There are multilateral trade agreements that promote economic integration, such as the USMCA (the 2020 successor to NAFTA), which brings together the US, Mexico, and Canada to reduce trade barriers. Similarly, CAFTA-DR (in force 2006-2009) is a trade agreement between the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. The US also has bilateral trade agreements with Chile, Peru, Colombia, and Panama. Specific to the US, recent initiatives for cooperation include the US International Development Finance Corporation (2018), the Americas Partnership (2022), and Project Vault (2026). For security cooperation in the Western Hemisphere, the US has supported several initiatives, including Plan Colombia, the Mérida Initiative/Bicentennial Framework, and the Caribbean Basin Security Initiative. More recently, the Shield of the Americas Summit in March of 2026 brought together 17 countries to form a coalition for promoting freedom, security, and prosperity in the Western Hemisphere. This coalition has a special interest in working together to counter criminal and narco-terrorist gangs and cartels.
The three domains of geography, economics, and institutions provide a framework for strengthening cooperation in the Western Hemisphere in order to effectively engage with new security challenges and the nature of the global economy. A multilateral organization that reduces trade barriers and brings together key players in the hemisphere to advance nearshoring and supply chains is necessary. This multilateral organization can also have specific initiatives related to investment and security in the region. Countries need to come together to define the framework and rules for promoting a competitive, secure, and cohesive hemisphere. The institutional architecture will shape how countries in the hemisphere interact across the geographic and economic domains. This domain, therefore, deserves particular attention. Given the current developments in the hemisphere, where non-hemispheric players have made significant progress, leading countries in the region need to strengthen their institutional infrastructure for cooperation. The Shield of the Americas is a recent step toward cooperation in the Western Hemisphere focused on the security domain; developing a similar framework focused on economic integration would be beneficial. Designing and implementing an effective institutional infrastructure takes time and requires a long-term commitment rather than a quick-fix solution.
The author thanks Isabella Elias, MPP candidate at Pepperdine School of Public Policy, for research assistance.
