How Russia sanctions threaten Latin America
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Illustration: Megan Robinson/Axios
Latin America is starting to feel the heat — and some favorable changes — from economic sanctions against Russia.
The big picture: The region has increasingly embraced Russia (and China) in past years for infrastructure investments and access to COVID-19 vaccines.
- Countries also sanctioned by the U.S. and Europe, such as Cuba, Nicaragua and Venezuela, have allied with Russia for access to banking and loans, particularly in the last decade.
- Sanctions against Russian banks could leave them hanging.
Details: Latin America is already seeing higher oil and gas prices, which is particularly tough on the mostly Central American countries that don’t produce their own.
- Higher inflation and interest rate spikes could hurt consumers.
- The COVID vaccination campaign could slow down if Russia's Sputnik shot becomes inaccessible.
- Countries such as Argentina that now have trade deals with Russia and had products like citrus and peanuts ready to go are now waiting indefinitely.
But, but, but: There could be some benefits.
- Higher prices for agricultural products and commodities like metals could be beneficial to some in the region who export those goods.
- Trade disruptions might help Brazil expand its meat distribution globally, according to Reuters.
What to watch: In a stunning reversal, the U.S. may be opening talks to resume oil trade with Venezuela to help with its own soaring gas prices.
- This could be a major boon for Venezuela's Nicolás Maduro. About 6 million people have been forced to flee Venezuela due to hunger and instability.
- Maduro released two American hostages on Tuesday after talks with U.S. officials, which have sparked backlash in Washington.
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