Trump’s 15% Global Tariff Takes Effect as Mexico Deploys 10,000 Troops and Colombia’s ELN Declares Surprise Ceasefire
Executive Summary
The Big Picture: Three simultaneous shocks are reshaping Latin America’s political and economic landscape this morning. President Trump’s 15% global tariff under Section 122 of the Trade Act of 1974 took effect at 12:01 AM ET—replacing the IEEPA tariffs struck down by the Supreme Court on Friday and imposing a new baseline on hemispheric trade for the next 150 days. In Mexico, the government deployed 10,000 troops as the aftermath of El Mencho’s killing enters its third day, with more than 70 dead and Guadalajara tentatively reopening. And in Colombia, the ELN declared a surprise unilateral ceasefire Monday ahead of March 8 elections—an unexpected move from a group that killed two of a senator’s bodyguards just weeks ago.
Markets reacted sharply. Wall Street sold off Monday as tariff uncertainty and AI disruption fears hit financials and software stocks: the S&P 500 closed at 6,837.75 (−1.04%), with financials down 3.3%. Across Latin America, the MERVAL fell 3.84% and the IPC dropped 1.12% as Mexico’s security crisis compounded tariff jitters. COLCAP bucked the trend, rising 2.10% on the ELN ceasefire and election momentum.
Regional Mood
The hemisphere wakes up to a new tariff reality—Section 122 is an untested legal tool with a 150-day fuse, and its product exemptions carve out much of what Latin America actually exports. The practical impact may prove narrower than the headline rate suggests. But the real test is political: whether the Supreme Court ruling and Trump’s rapid workaround accelerate or stall the bilateral trade deals that Latin American governments spent a year negotiating. In Mexico, the question has shifted from whether Sheinbaum can decapitate cartels to whether the state can survive the consequences. In Colombia, the ELN’s ceasefire is either pragmatism 12 days before elections—or a calculated bid to shield preferred candidates from the military’s security deployment.
Risk Snapshot
| Country | Key Driver | Risk Level |
|---|---|---|
| Mexico | 10,000 troops deployed; 70+ dead; Guadalajara tentatively reopening; CJNG succession vacuum; World Cup host city under siege | CRITICAL |
| Colombia | ELN declares surprise ceasefire Monday; March 8 elections 12 days out; 61 political leaders killed; 170 municipalities at risk | HIGH |
| Argentina | Senate committees review labor reform today; Feb 27 floor vote target; March 1 Milei speech; CGT legal challenge | HIGH |
| Peru | De Soto cabinet sworn in today; Castillo pardon request pending; April 12 election 47 days out; 34 candidates | HIGH |
Mexico
10,000 Troops Deployed as El Mencho Aftermath Enters Day Three; Over 70 Dead; Analysts Warn of CJNG Domino Effect Across Latin America’s Cocaine Corridor
What Happened
Mexico deployed approximately 10,000 troops to end violence triggered by the killing of CJNG leader Nemesio Oseguera Cervantes on Sunday. Authorities confirmed Monday that more than 70 people died: at least 27 security personnel, 46 suspected criminals, and one civilian. Defence Secretary Trevilla confirmed the death of Oseguera’s right-hand man, Hugo H., known as “El Tuli.”
Guadalajara began tentatively reopening Monday. Residents ventured out for food and supplies, though many stores remained closed and public transport stayed suspended. Burned vehicles had been cleared from streets. The U.S. State Department continued shelter-in-place advisories for Americans in eight cities including Guadalajara, Puerto Vallarta, Cancún, and Tijuana. The Chinese Embassy also issued a security advisory for its nationals.
CNN reported the killing could trigger a domino effect across Latin America’s cocaine production and transit network, particularly in Ecuador and Colombia. Crisis Group analyst David Mora warned the absence of a clear successor opens the door to violent realignments. President Sheinbaum maintained the operation was exclusively Mexican, rejecting any direct U.S. participation despite Washington’s confirmation of intelligence support through a joint task force.
Why It Matters
The troop deployment is the largest domestic security operation since Sheinbaum took office. The political calculus is ferocious: Trump has demanded cartel results, and El Mencho’s death delivers—but the 70+ death toll and national paralysis will be cited by Washington hawks as proof that Mexico cannot control its territory without U.S. military intervention.
The 2026 FIFA World Cup complicates everything. Guadalajara is a host city with matches four months away. USMCA review negotiations, already tense, now carry the weight of a security crisis that reinforces Trump’s leverage. Today’s IPC session is the first to price both the security crisis and the Section 122 tariff onset simultaneously.
Key Watch
CJNG retaliation trajectory Tuesday. Succession dynamics: El Jardinero, El Sapo, stepson Juan Carlos Valencia. IPC market reaction. Flight resumptions at Guadalajara and Puerto Vallarta. World Cup security review. CJNG supply-chain disruption in Ecuador and Colombia.
RISK: CRITICAL
Colombia
ELN Declares Surprise Unilateral Ceasefire Ahead of March 8 Elections; Deadliest Campaign in Three Decades; COLCAP Rallies 2.10%
What Happened
Colombia’s National Liberation Army declared a unilateral ceasefire Monday, pledging to cease attacks against military and electoral authorities to allow voters to participate in the March 8 congressional elections and presidential primaries. The ELN did not specify an end date. In its statement, the group denied financing campaigns and insisted it does not seek electoral power.
The announcement follows one of the bloodiest campaign seasons in three decades. At least 61 political leaders have been killed. Presidential candidate Miguel Uribe Turbay was assassinated last June. Two of Senator Castellanos’s bodyguards were killed in an ELN ambush in Arauca. The electoral watchdog MOE counts 170 municipalities at risk, 81 in extreme risk—a 30% increase from 2022. Defence Minister Sánchez deployed security forces for election protection.
The Petro government broke off peace talks with the ELN last year after a string of attacks. Under Petro’s negotiation-first approach, armed groups expanded territory as coca production hit a record 1,700 tonnes. Investment has fallen to 16% of GDP, a two-decade low.
Why It Matters
The ceasefire is the ELN’s first concession since talks collapsed. The cynical reading: the ELN is protecting preferred candidates in areas where it controls local government. The charitable reading: even a 60-year insurgency recognizes that attacking elections invites the kind of military escalation El Mencho’s killing just demonstrated next door.
COLCAP’s 2.10% rally reflects cautious optimism that March 8 may proceed with lower violence than feared. The presidential race matters more: frontrunners Cepeda (left) and de la Espriella (right) are not in the primaries, making March 8 a coalition-strength test rather than a definitive race.
Key Watch
Whether ELN ceasefire holds through March 8. CJNG domino effect on Colombian cocaine corridors. Primary dynamics across three coalitions. Defence Ministry election security deployment.
RISK: HIGH
Argentina
Senate Committees Begin Labor Reform Review Today; Floor Vote Targeted February 27; CGT Declares Law Unconstitutional; MERVAL Drops 3.84%
What Happened
The Senate’s Labour Legislation and Budget committees convene at 10 AM today to review the amended labor reform bill passed by the Chamber of Deputies early Friday. The government targets a floor vote February 27—one day before extraordinary sessions expire and two days before Milei’s March 1 state-of-the-nation address.
Deputies approved the 218-article bill 135 to 115 after a 12-hour session conducted against a CGT 24-hour general strike that paralyzed air travel, buses, taxis, and trains. To secure passage, the government removed controversial Article 44, which would have cut sick-leave wages by 50%. The bill must return to the Senate to ratify this amendment; even if the Senate rejects the change, the bill becomes law. Senator Patricia Bullrich has signaled willingness to accept the removal.
The CGT declared the law unconstitutional and announced a legal challenge. At least 16 people were arrested and 6 injured when police used water cannons, tear gas, and rubber bullets against protesters. The government expanded RIGI investment incentives for oil and gas over the weekend, extending the regime to 2027 and lowering onshore thresholds to $600 million.
Why It Matters
This is Argentina’s biggest labor overhaul since the 1970s, rolling back decades of rules around hiring, firing, severance, and collective bargaining. The bill aims to formalize roughly half the workforce currently off the books. Formal salaried jobs have declined by 270,000 since Milei took office, though unemployment has not spiked due to surging informal employment. The IMF endorsed the reform’s job-creation potential but cautioned about managing transition costs.
MERVAL’s 3.84% drop Monday—the sharpest LatAm selloff—reflects combined global tariff uncertainty and domestic political friction. The Feb 27 vote is almost certainly assured; the Senate already passed the original 42–30. The question is whether markets treat passage as Milei’s crowning reform achievement or whether the CGT’s legal challenge introduces new uncertainty.
Key Watch
Senate committee outcome today. February 27 floor vote. CGT constitutional challenge filing. Milei March 1 speech. MERVAL reaction to Section 122 tariff + labor reform convergence.
RISK: HIGH
Regional Snapshot
Peru
Hernando de Soto (84) is sworn in today as Prime Minister alongside the full cabinet, giving Balcázar’s transitional government immediate international credibility. De Soto’s reputation in property rights and economic formalization signals stability during the 47-day transition to April 12 elections. Castillo’s presidential pardon request remains unanswered. Thirty-four candidates contest the presidency; López Aliaga leads polls. Balcázar’s own trial for alleged misappropriation is scheduled June 16.
Trump Tariffs
Section 122 15% global tariff takes effect today at 12:01 AM ET, replacing IEEPA tariffs struck down Friday (6–3). Capped at 150 days (expires July 24). USMCA-compliant goods from Mexico and Canada exempt. Carve-outs cover critical minerals, energy, agriculture (beef, tomatoes, oranges), pharmaceuticals, electronics, vehicles, and aerospace. Legal scholars at the National Review and CFR argue Section 122’s balance-of-payments justification is vulnerable. EU paused ratification of its U.S. trade deal in response.
Brazil
Lula returns today after his eight-day Asia tour. The Ibovespa fell 0.88% Monday in its post-Carnival reopening, giving back some of Friday’s record close above 190,000. The Seoul summit upgraded ties with South Korea to a strategic partnership with 10 MOUs covering critical minerals, AI, and defence. October election dynamics tighten as Flávio Bolsonaro polls within single digits of Lula. Copom rate decision March 17–18.
Chile
IPSA rose 0.63% Monday, shrugging off Friday’s U.S. visa sanctions on Transport Minister Muñoz over the Chinese-linked undersea cable project. Markets are pricing in Kast’s March 11 inauguration as a stabilizing event. Secretary Rubio expected to attend. Kast’s “Border Shield” promises a 3,000-strong force for northern border control from day one.
Cuba
Energy deficit exceeded 1,700 MW during peak hours Sunday, with the grid meeting barely half of demand. Blackouts continue island-wide. Aeroflot’s last scheduled Cuba service departs today, completing Russia’s aviation withdrawal. The Nuestra América Flotilla plans to reach Havana March 21 to challenge the U.S. blockade.
Venezuela
Amnesty law implementation continues. Human Rights Watch warned prisoner releases alone do not constitute genuine transition, calling for judicial and electoral reform. Delcy Rodríguez announced the shutdown of El Helicoide prison. Cuban security advisers and doctors are departing under U.S. pressure to sever the Havana–Caracas alliance. OFAC expanded sanctions relief for upstream oil activities.
Markets at a Glance
| Index | Close (Mon) | Change | Context |
|---|---|---|---|
| Ibovespa | 188,853.49 | −0.88% | Post-Carnival reopening; gave back some of Friday’s record above 190K |
| MERVAL | 2,763,058.74 | −3.84% | Sharpest LatAm selloff; tariff + labor reform friction |
| IPC | 70,633.77 | −1.12% | First session pricing El Mencho + Section 122 tariff |
| COLCAP | 2,468.58 | +2.10% | ELN ceasefire + election momentum; bucked LatAm selloff |
| IPSA | 10,923.25 | +0.63% | Shrugged off U.S. sanctions; Kast inauguration priced in |
| S&P 500 | 6,837.75 | −1.04% | Tariff confusion + AI disruption fears; financials −3.3%; Nvidia Wed |
Source: TradingView (Tier 0) for Ibovespa, MERVAL, IPC, COLCAP, IPSA — charts provided by editor Feb 24. S&P 500 from CNBC/Yahoo Finance. All figures reflect Monday, February 23, 2026 closing sessions.
The Week Ahead
| Date | Event |
|---|---|
| Tue Feb 24 | Trump 15% Section 122 tariff takes effect • De Soto cabinet swearing-in • Senate committees review labor reform • Aeroflot last Cuba service • Troop deployment + retaliation watch |
| Wed Feb 25 | Nvidia earnings (AI bellwether) |
| Tue–Fri Feb 25–27 | CARICOM Leaders’ summit |
| Thu Feb 27 | Senate floor vote on labor reform (target) |
| Sat Feb 28 | Extraordinary sessions deadline |
| Sun Mar 1 | Milei state-of-the-nation speech |
| Sat Mar 7 | Trump hosts LatAm leaders in Miami |
| Sun Mar 8 | Colombia: Legislative elections + presidential primaries |
| Wed Mar 11 | Chile: Kast inauguration |
| Mar 17–18 | BCB Copom rate decision |
| Mar 21 | Nuestra América Flotilla targets Havana |
| Apr 12 | Peru general election (first round) |
| Jul 24 | Section 122 tariff expires (150-day limit) |