Latin America Is the Next Swing State

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

We are glad to meet you again. Great things are coming for GCaM. You can already feel the winds of change, and trust me, the project is exciting. But more on that in the near future… but be advised, it will be great. For now, let’s get back to the present.

Our dear region of interest is in a growing trend of importance for the U.S., not just for the geographical closeness it has held forever, but in domestic policy as well. Now, in a GOP looking for a successor to Trump, Latin America might as well be the swing state that tips the balance between Vance and Trump.

But things are delicate for the Secretary of State. While his popularity has risen more than a 30% in just over a year, war has never been so unpopular as it is today. His management of foreign policy is, so far, cherished, but Iran could be catastrophic for him. The balance is delicate, but as a newsletter focused on the geopolitics of the Americas and the Caribbean, the panorama is exciting.

In this issue, you will find:

• Latin America: the Battleground for the Rubio-Vance Contest

• War Has Never Been So Unpopular

• Beyond Neutrality: The US-China Proxy War for the Panama Canal

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A little over a year into his second presidency, the race to define the post-Trump Republican Party is no longer a distant question—it is already taking shape.

In perspective. What once looked like a clear path for Vice President JD Vance is now a two-lane contest, with Marco Rubio rapidly closing the gap, if he hasn’t overtaken him yet. At CPAC 2026, Vance still led with a 53%, but Rubio surged to 35%, up from just 3% a year earlier. That shift reflects a deeper division within MAGA. Vance embodies the movement’s “populist” core—now that the word populism has been totally stripped of its true meaning—while Rubio is emerging as its governing face.

• Rubio has proven himself as someone who can execute policy, manage crises, and, crucially, translate Trumpism into a more structured foreign policy, which is its biggest display of greatness.

• What is increasingly clear is that this internal contest will not be decided solely in Washington or even in traditional battleground states.

• It may well be shaped by a region that, until recently, sat on the margins of U.S. electoral strategy: Latin America.

How it works. Rubio’s rise is not happening in a vacuum. It is directly tied to his role in the Trump administration’s foreign policy, particularly in Latin America. As Secretary of State, he has become one of the most visible and effective figures in the administration, gaining influence without generating significant internal resistance. His handling of regional issues—from Venezuela to Cuba—has elevated his profile among both policymakers and voters.

• This matters because foreign policy, often peripheral in domestic elections, becomes politically decisive when it produces tangible results, both in victory and in catastrophe—Jimmy Carter could attest to it.

• If Rubio can claim success in stabilizing or reshaping key regimes in the hemisphere, he will be building both a résumé and a constituency.

• Latin America, in this sense, has transcended from a mere geopolitical theater to a proving ground for leadership within the GOP.

Between the lines. The real shift, however, is electoral. For decades, Latino voters were seen as a largely Democratic-leaning bloc, with some notable exceptions in places like Florida. That assumption is now eroding. Republicans have made significant inroads, particularly among Cuban and Venezuelan Americans, and while there are signs of volatility—Democrats are actively trying to regain ground in South Florida—this is no longer a one-sided contest. Rubio represents a unique opportunity for the GOP to consolidate and expand that shift.

• His identity as a Cuban-American provides cultural and political access to communities that have historically been difficult for Republicans to fully capture.

• At the same time, it introduces a risk. More hardline factions within the Republican base may resist elevating a Latino figure as the face of the movement.

• The question, then, is whether electoral pragmatism can outweigh cultural hesitation. If Rubio delivers results in Latin America—particularly in Venezuela and Cuba—that tension may resolve itself in his favor and neutralize a lot of the negative press deportations and raids have brought upon Trump.

Why it matters. What we are seeing is the emergence of a new electoral logic. Latin America is no longer just “foreign policy”. Demographic changes and multiculturalism are turning it into domestic politics. Migration, security, trade, and ideological alignment are increasingly interconnected, and voters—especially Latino voters—are paying attention. Rubio’s approach aligns with the broader shift in Trump-era foreign policy: transactional, results-oriented, and unapologetically strategic.

• Just like the policies towards Israel have been fundamental towards the Jewish diaspora and Christians, the same is happening with Latin America.

• If that approach yields visible outcomes, it could redefine how Republicans engage with Latino communities, not as a peripheral demographic, but as a central electoral pillar.

• In that scenario, Latin America itself becomes a kind of external swing state—one whose political developments feed directly into U.S. electoral dynamics.

The bottom line. The GOP’s future is being shaped by both internal factionalism and geography. Rubio’s rise suggests that the path to the Republican nomination—and potentially the presidency—may run through Caracas, Havana, and even Mexico City as much as through Iowa or New Hampshire.

• This does not mean that Latin America will determine the election on its own, but it does mean that it could tip the balance in a race where margins matter.

• Rubio could translate foreign policy success into domestic political capital, and Vance will have to compete in a space where cultural connection and geopolitical outcomes intersect.

• While it won’t be the biggest demographic among the electorate, the next swing state may not be a state at all.

There’s something deeper in the graph than a bad number for Trump. It shows a pattern that has been building for more than two decades, and once you see it, it’s hard to ignore.

In perspective. Over the history of the 20th and 21st centuries, support for U.S. involvement in a war has never been lower. Since 2001, every new war has started with less public support than the previous one. Afghanistan had overwhelming backing in the aftermath of 9/11. Iraq still commanded a strong majority, even if more contested. By Libya, that consensus was already fractured. Now, with Iran, approval sits barely above forty percent. That’s not a fluctuation but a steady decline.

• What changed is not only policy but also attitude. The American public has gone through a full cycle: shock, mobilization, fatigue, and finally skepticism.

• Afghanistan was necessary, and Iraq raised doubts, but many still gave the government the benefit of the doubt.

• Over time, those doubts hardened into something closer to instinct. War stopped being seen as a tool to solve problems and started being viewed as a risk that rarely delivers what it promises. That shift doesn’t reverse easily. It accumulates.

Why it matters. That accumulation matters for any president, but it matters more for Trump. His political rise was tied, in part, to a rejection of the foreign policy consensus that defined the early 2000s. He didn’t just criticize specific wars, but he tapped into a broader frustration with the idea that the United States should be constantly involved in them. “No more endless wars” was not a side note in his message. It was central to how his voters understood him.

• That’s why the current moment hits differently. A president like George W. Bush operated in a political environment where support for military action was still the default, especially after a major shock.

• Even Obama, despite facing skepticism, didn’t build his coalition around a strong anti-war identity, and he largely justified his interventions with the defense of liberal democracy.

• Trump did. His voters were not simply tolerant of restraint; they actually expected it. For them, avoiding new conflicts was part of the deal.

The friction point. Now he finds himself navigating a situation where the public mood has already shifted against war, and his own base is less willing than most to accept it. That creates a narrower path. There is less room to persuade, less patience for uncertainty, and less willingness to wait for results. The decline in approval is not merely about the specifics of Iran. In this case, it reflects a broader exhaustion that has been building since the early 2000s.

• What the graph suggests is that the United States has reached a point where war no longer comes with an automatic reservoir of support.

• Each conflict since 2001 has made the next one harder to sell, harder to justify, and harder to sustain politically. Presidents now have to work against that momentum, not with it.

The bottom line. For Trump, that reality carries an added complication. He is now confronting expectations he helped create. His political identity is tied to restraint, and any deviation from that line carries a cost that previous presidents did not face in the same way. With the midterms right around the corner, a quick resolution is critical.

• The result is a presidency operating in a different environment than those that came before it.

• War has not disappeared as an option, but the conditions under which it can be used have changed. The tolerance is lower, and the political consequences arrive faster.

The strategic landscape of the Panama Canal is undergoing its most significant shift since the 1999 handover, as sudden judicial maneuvers have ousted Chinese-linked operators from its critical entry points.

In perspective. A commercial concession renewal has spiraled into a high-stakes geopolitical confrontation between the United States and China, with Panama caught in the crossfire. The roots of the current friction lie in the 1997 privatization of Panama’s port system and the subsequent rise of Chinese commercial power in the Western Hemisphere. In 1997, Law 5 granted the Hong Kong-based conglomerate CK Hutchison—then Hutchison Whampoa—the rights to operate the ports of Balboa and Cristobal, effectively placing a Chinese-affiliated entity at both the Pacific and Atlantic mouths of the canal.

• American pressure, given the Chinese operator, reached a boiling point during the Trump administration, characterized by high-level diplomatic warnings and rhetoric depicting Chinese investment as predatory and a threat to Panamanian sovereignty.

• Trump’s narrative, which stated a desire to take the Canal back, signaled that the commercial status quo was no longer politically sustainable for US interests. The legal knockout blow came in January 2026, when the Panamanian Supreme Court declared Law 5 and its associated contracts unconstitutional, citing disproportionate privileges and a lack of competitive bidding.

• This ruling created the legal vacuum necessary for the Mulino administration to issue an executive decree seizing the assets and installing Western-aligned giants, APM Terminals and TIL, under temporary 18-month management contracts.

The essential. The shift in port management has triggered a complex legal offensive in London and international forums, placing Panama’s fiscal stability under unprecedented strain. In April 2026, Panama Ports Company (PPC), CK Hutchison’s local subsidiary, launched a direct arbitration against Maersk in London, alleging the Danish shipping giant breached long-term exclusivity agreements by colluding with the Panamanian government to facilitate the takeover. PPC claims that Maersk utilized confidential operational data to streamline the transition to its subsidiary, APM Terminals, effectively undermining a contract that intended to ensure a collaborative business model.

• Parallel to the corporate suit, PPC expanded its damages claim against the Panamanian state to over USD 2B, a figure that represents approximately 2.3% of Panama’s projected 2026 GDP.

• This massive potential liability threatens to transform the Panama Maritime Authority (AMP) from a reliable sovereign revenue generator into a source of acute fiscal risk, complicating the country’s efforts to maintain its investment-grade rating.

• This litigation wave marks a sharp departure from the AMP’s historical financial prudence, which has traditionally prioritized long-term concession stability to ensure steady cash flow. By aggressively ousting the previous operator, the current administration has traded guaranteed port royalties for a high-stakes legal gamble that could result in a payout larger than the total annual canal contributions to the national budget.

Between the lines. Beyond the courtroom drama, Beijing is leveraging its dominance over global maritime logistics to pressure Panama’s most sensitive economic nerve—its ship registry. Since March 2026, Chinese port authorities have implemented a campaign of logistics coercion, utilizing port state control inspections to disproportionately target Panama-flagged vessels. Data from the Tokyo Memorandum of Understanding indicates that during key periods, over 75% of all ship detentions in Chinese ports involved the Panamanian flag. This is a statistical anomaly that works as a deliberate retaliatory blockade disguised as safety enforcement.

• By slowing down these vessels, China is attacking the Panama brand at its core. The resulting delays and rising insurance premiums create a powerful incentive for global shipowners to abandon the Panamanian registry.

• This flag risk threatens a critical sovereign revenue stream, as Panama currently hosts nearly 18% of the world’s merchant fleet, making it uniquely vulnerable to any state that can weaponize access to major global manufacturing hubs.

• This strategy inflicts heavy collateral damage on neutral maritime powers, particularly Japan and Greece, whose owners represent a massive portion of the Panamanian registry’s clients. With reports indicating that 39% of the detained vessels are Japanese-owned, Beijing is effectively holding the global supply chain hostage to signal that Panama’s alignment with Washington comes with a high price for all its international partners.

The geoeconomic pivot. The 2026 conflict in Iran has fundamentally altered the global energy map, positioning Panama as the critical knowledge arbitrage node for a world deprived of traditional Middle Eastern supply routes. With the Strait of Hormuz effectively closed to commercial traffic, the value of the Panama Canal has surged, as it now serves as the primary conduit for US LNG and crude oil seeking to fill the massive supply vacuum in Asian and European markets. In this environment, the Canal has become the referee of global energy flows, where control over the schedule of a single tanker can determine the energy security of an entire nation.

• This arbitrage of knowledge is the new frontier of maritime power—because Hormuz is untransitable, real-time data on exactly where cargo is and when it will arrive has become a scarce and highly valuable commodity.

• Panama now acts as the central clearinghouse for this intelligence, allowing the US to coordinate the redirection of American hydrocarbons to strategic allies while denying similar logistical visibility to adversaries. The expulsion of Chinese operators was the prerequisite for this information dominance, allowing the US to integrate Panama’s ports and the Canal’s scheduling systems into a hemispheric digital common operating picture.

• By replacing Chinese-proprietary black-box systems with Western-standard connective software, Washington has secured a durable layer of influence that transcends physical ownership, ensuring that the software governing the Canal’s logistics is as aligned with US interests as the hardware that moves the ships.

In conclusion. Panama’s decisive shift toward US strategic alignment effectively terminates its era of functional neutrality, trading broad commercial appeal for a high-stakes role in the Western energy security architecture. This realignment carries profound fiscal and reputational risks, as the nation remains exposed to a multi-billion-dollar arbitration cliff and a sustained campaign of Chinese maritime coercion targeting its vital ship registry.

• Ultimately, Panama faces the danger of becoming a geopolitically brittle state, where the perceived stability of its legal contracts is perpetually secondary to the shifting tides of superpower competition for control of its ports.