The Trump administration’s foreign policy is shaping its approach to Latin America and the Caribbean with a particular emphasis on economic security.
As noted by U.S. Secretary of State Marco Rubio in a recent Wall Street Journal piece, this strategy is rooted in the administration’s overarching goal of ensuring economic stability and security for the United States by creating reliable supply chains in critical industries throughout the region.
The focus on economic security is a continuation of the policies established during President Donald Trump’s first term, particularly those geared toward reshoring U.S. investments.
The COVID-19 pandemic and elevated geopolitical tensions have highlighted the vulnerabilities associated with long-distance supply chains.
However, not all sectors can feasibly benefit from this reshoring initiative due to structural differences in wages and utility costs, as well as varying business tax rates among U.S. states.
When reshoring proves impractical, the alternative often involves nearshoring, which means relocating production to neighboring countries.
In addition to economic objectives, the Trump administration has multiple priorities for the region; for example, it aims to curb illegal immigration, enhance defense cooperation, and target routes associated with drug trafficking and transnational crime.
This multi-faceted approach necessitates a careful selection of economic-security partners, especially considering factors like industrial capacity and alignment of political interests.
Mexico exemplifies a viable partner due to its scale and experience.
As a participant in the United States-Mexico-Canada Agreement (USMCA), Mexico managed to circumvent significant tariffs during the recent global tariff announcements, maintaining zero tariffs for USMCA-compliant goods.
The strategic closeness of Mexico to the U.S. reduces logistics costs and fosters economic interdependencies in sectors such as automobiles, electronics, and aerospace.
Yet, Mexico is not without challenges; organized crime poses threats to its business operations, while increasing labor costs and bureaucratic inefficiencies can hinder investment.
In light of these obstacles, the Dominican Republic presents a strategic opportunity for the U.S. economic security framework, provided it can address shortcomings in its infrastructure and labor market.
Positioned favorably, the Dominican Republic possesses a history of partnership with the United States that spans over a century, characterized by strong trade, investment, and security cooperation.
It benefits from robust trade agreements, such as a 20-year-old free trade agreement, which has been advantageous for both countries.
During a recent tariff initiative dubbed ‘Liberation Day,’ the Dominican Republic faced only a 10% reciprocal tariff—less than many regional counterparts— bolstering its competitive market access.
Additionally, the Dominican Republic is experiencing a growing attraction for foreign investments, especially in advanced sectors like tourism, financial services, light manufacturing, and semiconductor assembly.
Beyond economic ties, the Dominican Republic has collaborated with the U.S. on immigration management and security efforts.
Last year, the Dominican armed forces worked in tandem with American agencies to seize significant drug shipments, illustrating its commitment to regional security.
Moreover, the Dominican Republic has intensified its defensive measures along the Haitian border to combat illegal migration to the United States, solidifying its alignment with American policy goals.
In terms of regional leadership, the Dominican Republic is gearing up to host the tenth Summit of the Americas this coming November, further demonstrating its active engagement in international cooperation.
Despite this promising backdrop, several challenges still loom over the Dominican Republic’s ambitions to become a hub for supply chain relocation.
First and foremost, infrastructure constraints persist.
While notable improvements have been made, logistical and energy infrastructure needs further development; for instance, the national seaport system can handle larger cargo volumes, but issues remain with terrestrial transportation, particularly internal road networks that are plagued by congestion and poor maintenance.
Electricity supply is another persistent issue, particularly outside urban zones, where manufacturers express concerns over operational reliability.
Moreover, a shortage of skilled labor complicates matters further.
Although the Dominican Republic possesses a youthful workforce, there is a misalignment between available labor and the specialized skills needed in high-value manufacturing sectors like electronics and semiconductors, requiring the country to rely on imported expertise for advanced projects.
Regulatory hurdles also impede progress, as investors face slow permitting processes that culminate in frustration and delays.
Historical data from the World Bank indicates that the Dominican Republic lagged behind regional competitors like Chile and Colombia in the ‘Ease of Doing Business’ rankings prior to the pandemic.
Lastly, the Dominican Republic must contend with regional competition as other nations vie for a share of the nearshoring boom.
Countries such as Costa Rica, renowned for its well-developed technology sector and stable political climate, and Panama, with logistical advantages via the Panama Canal, serve as formidable rivals eager to attract foreign investment in similar sectors.
To cement its position as a prime destination for supply chain relocations and deepen economic security collaboration with the U.S., the Dominican Republic must take decisive action.
Among recommended strategies are the streamlining of customs and regulatory procedures to hasten business development and enhance supply chain efficiency.
Fostering public-private partnerships may also prove vital in addressing infrastructure gaps, including logistics and energy reliability, while strategically countering any potential encroachments from Chinese-backed investments in critical supply areas such as rare minerals, cybersecurity, and fintech.
Moreover, the country should invest in workforce development aimed at cultivating high-value manufacturing skills that are attractive to global investors.
While Mexico offers a well-established industrial framework enriched by USMCA membership, its challenges remain significant.
Conversely, the Dominican Republic holds promise through its strategic partnerships with the United States and proactive investments in emerging sectors, but the resolution of its infrastructure challenges and economic diversification will be critical for realizing its potential.
The selection of viable economic security partners for the United States thus hinges on the specific needs and priorities of diverse businesses and industries.
With its strategic advantages and economic strengths, the Dominican Republic stands to play a vital role in the unfolding complexities and opportunities of U.S. strategies in the Western Hemisphere, provided it adequately confronts and overcomes its current challenges.
image source from：https://www.atlanticcouncil.org/blogs/new-atlanticist/could-trumps-focus-on-economic-security-be-a-boon-for-the-dominican-republic/
