Between Principles and Pressure: Trump’s ideas and what his return means for Costa Rica

As Donald Trump embarks on his second Term as President of the United States, it has become clear how drastically relations between the USA and Costa Rica might change. After Trump's completion of his first 100 days, the impact has already been significant. With the instigation of a Trade War that has so far failed to deliver the success Trump envisioned, the US economy is now showing signs of strain: GDP shrank by 0.3% in the first quarter of 2025, while inflation remains at 2.3% and unemployment at 4.2%. A combination that reflects stagnation rather than recovery. Instead, he destabilized the world economy and led a lot of countries into rethinking their relations with, and also potential reliances on the United States. Not to mention the erosion of trust in international law by threatening the sovereignty of Panama, Denmark, Canada, and Palestine. The success of limiting the rule of force through international law is currently being torpedoed. The renewed administration brings with it a series of policies that will also impact Costa Rica. The government will have to find a way to navigate a tangle of rapidly shifting policies that change the nation's migration dynamics, trade relations, and environmental initiatives.

New Migration-Complexities

Probably the most immediate effect of Trump’s return to office is the dismantling of existing asylum frameworks, several of which have already been facing legal challenges in federal courts. His administration has resumed deportations to third countries, including Costa Rica, Panama, and El Salvador, under policies that legal experts claim to be unconstitutional, violate international norms, and bypass due process. Besides undermining core principles of a functioning democracy by disregarding court rulings, Trump has used economic pressure to push smaller nations into cooperation. Costa Rica, for instance, agreed, under diplomatic pressure, to temporarily host 200 migrants at the CATEM center in Corredores. President Rodrigo Chaves Robles justified this decision by highlighting the economic power the U.S. holds over Costa Rica, stating, “We are helping the economically powerful brother from the north because if he imposes a tax on our exports, we are screwed”. This underscores the balance several Latin American countries are currently trying to find in their diplomatic relations, due to Trump's way of threatening smaller countries with high export tariffs. The group of 200 migrants includes individuals from Afghanistan, China, Iran, Russia, and other countries, among them 81 children, two pregnant women, and several elderly people. Many had been awaiting U.S. asylum hearings, ready to explain their reasons for seeking asylum, but were deported without notice in advance. Some stated that due to the lack of translators, they have been deported without being told their destination. Reports describe harsh conditions at the CATEM facility: extreme heat, inadequate food, and children sleeping on cardboard. This has led a group of human rights lawyers to sue Costa Rica for violating the U.N. Convention on the Rights of the Child. “The kids are in a very crucial part of their development, and they are all fleeing complicated contexts in their countries. And now they’re subjected to detention […] and inhumane treatment,” said attorney Serna Roman. The children have been witnessing traumatic events. Some were separated from their parents by U.S. authorities; others watched their parents being hand- and ankle-cuffed. Media access to the center has been largely restricted, raising concerns about transparency. According to the Costa Rican government, migrants are allowed to leave the facility if they agree to either return to their country of origin or apply for asylum in Costa Rica. Some have begun the asylum process, while others remain in legal limbo, fearful of persecution if returned, such as an Afghan family who say they would be killed by the Taliban if they return. Costa Rica is now caught between humanitarian tradition and domestic political pressure. This situation mirrors similar developments in Panama and El Salvador, which are also facing the pressured acceptance of deported migrants from the U.S. The larger migration pressure on Costa Rica though, stems from rejected asylum seekers moving southward after being turned away at the U.S. border. Known for its traditionally welcoming stance towards migrants, and as a defender of human rights, Costa Rica now faces the difficult task of upholding those human rights while maintaining control over its migration and integration policies.

Facing Protectionist Policies

Trump’s “America First” approach also extends to trade, with repercussions for Costa Rica’s economy. The administration is reviving ideas of protectionism that were thought to be a phenomenon of the past in an increasingly globalized world economy. The underlying principle is that globalized trade allows each country to specialize in what it produces most efficiently, where established supply chains for individual parts of a product reduce costs of production—advantages that protectionism tends to undermine. However, the 47th US president has been continuously advocating for protectionism since the 80s. Trump’s return to protectionist trade policies is driven by two intertwined motives: an economic theory aimed at reshaping global trade, and a political tactic to increase U.S. leverage in international negotiations. Firstly, in theory, tariffs are meant to protect domestic industries by making imported goods more expensive. Businesses have to pay a tax for imported goods, and therefore tend to increase the price of their product, to make up for this loss in revenue. This encourages businesses that want to supply the U.S. market to also produce in The U.S. and create jobs there. It therefore leads consumers to buy American-made products. This explains why industrial workers support him since it's their jobs that are being secured. Secondly, the tariffs serve as a tool to pressure trade partners into changing their behavior. Unlike most heads of state, Trump can impose tariffs quickly and unilaterally, without congressional approval, giving him a powerful and fast-acting bargaining tool in international negotiations, one he has used repeatedly to exert pressure on trade partners. This approach isn’t new. During his first presidency, Trump used targeted tariffs, such as those on washing machines, which did indeed temporarily create about 1,800 U.S. jobs. However, economists later found that consumers paid an average of $815,000 in higher prices per job created, making it an extremely inefficient form of job protection. More broadly, tariffs on imported inputs like steel hurt downstream industries that rely on those materials, pushing up production costs, lowering profits, and making U.S. firms less competitive internationally, since their competitors are not exposed to those tariffs. Taking into account those “downstream industries”, the tariffs in total led to net job losses during Trump’s last presidency. Trump justifies these policies by claiming the U.S., despite being the wealthiest nation worldwide, is being “scammed” by other countries. He envisions a “balanced” trade ledger with every country, a goal most economists argue ignores the basic laws of economics. Small economies like Costa Rica simply don't have the demand to import U.S. goods in equal measure to what they export. Costa Rica ships large volumes of bananas, coffee, and medical devices to the vast American market. However, home to just over 5 million people, simply does not have the purchasing power to achieve a symmetrical trade balance with the United States. A country of this scale cannot possibly absorb the same value of goods as it sells. In practice, tariffs often backfire. If targeted countries answer with counter-tariffs, global trade decreases and economic output shrinks, risking global recession and eventually shrinking the U.S. economy. If they don’t enforce counter-tariffs, they may simply turn to other trade partners, leaving the U.S. increasingly isolated. Either way, American consumers pay the price. A middle-class family is estimated to spend over $4,000 more per year due to tariff-driven price increases. That’s part of why inflation is projected to rise in 2025, with economists warning of a possible recession. Another unanswered question is whether Americans are actually eager to take back the low-wage jobs that were previously outsourced. Those include shoe production, call center work, and TV assembly. Despite these risks, Trump’s views on trade appear unchanged. He has pledged to use revenue from new tariffs, such as the 10% tariff currently imposed on Costa Rican exports, to fund tax cuts for American citizens. Given that the U.S. is Costa Rica’s largest export market, such tariffs have serious implications for the country’s economy. Moreover, the U.S. has shown a willingness to use tariffs as a political force, to extract concessions, as seen recently in its deportation negotiations with Costa Rica, Colombia, Panama, and El Salvador. Costa Rica may face similar pressure tactics in the months ahead. Balancing national interests while maintaining favorable trade relations with a more aggressive United States could become one of the country’s toughest diplomatic challenges.

Uncertain Environmental Support

One of Trump’s first actions after returning to the Oval Office was, just like in 2017, his renewed withdrawal from the Paris Climate Agreement. Costa Rica has long been a global leader in environmental conservation. Therefore, Trump’s denial of climate change not only limits the U.S.’s ability to understand and respond to a hotter planet but also poses challenges in its relationship with a country like Costa Rica, which is committed to the fight against climate change. Those efforts will also be hindered by the massive reduction of funding for U.S. environmental aid. The pullback from supporting “debt-for-nature” deals threatens arrangements that reduce a country's debt in return for conservation commitments, like Costa Rica. In the past, these deals have been instrumental in funding Costa Rica's conservation projects. The rollback of support for those agreements and Trump's plans to dissolve USAID threatens progress in preserving Costa Rica’s rich biodiversity. The nation must now navigate an increasingly unpredictable geopolitical landscape, facing new migration circumstances, economic pressure, and potential environmental setbacks. The country might have to think about how to reduce dependence on the U.S.A. and diversify trade relations. It’s a time when Costa Rica cannot afford to act impulsively. The challenges ahead demand decisions grounded in pragmatism but also principles, guided by the country’s core values. Upholding sustainability, human rights, and a rules-based international order is not just a moral stance, but also a strategic one for Costa Rica.