Itemoids

United

UPS stock plummets 15% because it's about to do a lot less Amazon business

Quartz

qz.com › ups-amazon-delivery-revenue-healthcare-consumers-1851751767

Shares of United Parcel Service (UPS) dropped 15% on Thursday, marking its worst day ever, after the company announced a significant reduction in its business with Amazon (AMZN), its largest customer. The move, which will see UPS lower its Amazon-related revenue by more than 50% by the second half of 2026, has rattled…

Read more...

The DeepSeek Wake-Up Call

The Atlantic

www.theatlantic.com › newsletters › archive › 2025 › 01 › the-deepseek-wake-up-call › 681512

This is Atlantic Intelligence, a newsletter in which our writers help you wrap your mind around artificial intelligence and a new machine age. Sign up here.

Earlier this week, almost overnight, the American tech industry entered a full-on panic. The latest version of DeepSeek, an AI model from a Chinese start-up of the same name, appeared to equal OpenAI’s most advanced program, o1. On Monday, DeepSeek overtook ChatGPT as the No. 1 free app on Apple’s mobile-app store in the United States.

So far, China has lagged the U.S. in the AI race. DeepSeek suggests that the country has gained significant ground: The chatbot was built more quickly and with less money than analogous models in the U.S., and also appears to use less computing power. Software developers using DeepSeek pay roughly 95 percent less per word than they do with OpenAI’s top model. One prominent AI executive wrote that DeepSeek was a “wake up call for America.” Because DeepSeek appears to be cheaper and more efficient than similarly capable American AI models, the tech industry’s enormous investments in computer chips and data centers have been thrown into doubt—so much that the top AI chipmaker, Nvidia, lost $600 billion in market value on Monday, the largest single-day drop in U.S. history. Sam Altman, the CEO of OpenAI, said that it was “invigorating to have a new competitor” and that, in response, the company would move up some new software announcements. (Yesterday morning, OpenAI said that it is investigating whether DeepSeek used ChatGPT outputs to train its own model.)

But many prominent American researchers and tech executives celebrated DeepSeek, as well. That’s because “the most notable feature of DeepSeek may be not that it is Chinese, but that it is relatively open,” I wrote on Monday. Whereas the top American AI labs at OpenAI, Google, and Anthropic have kept their technology top-secret, DeepSeek published an in-depth technical report and is allowing anybody to download and modify the program’s code. “Being democratic—in the sense of vesting power in software developers and users—is precisely what has made DeepSeek a success,” I wrote. Start-ups and researchers love this relative transparency. In theory, competitors can use DeepSeek’s code and research to rapidly catch up to OpenAI with far fewer resources—you might not need colossal data centers to get to the front of the AI race. (The Atlantic recently entered into a corporate partnership with OpenAI.) However, there’s substantial uncertainty about just how much cheaper DeepSeek was to build, based on reports about the start-up’s hardware acquisitions and uncertainty about how the model was trained.

Meanwhile, for national-security hawks, the fear is that an open-source program that won’t answer questions about the Tiananmen Square protests could become a global technological touchpoint. DeepSeek could face similar privacy concerns as TikTok: Already, the U.S. Navy has banned its use, citing security concerns.

Any predictions, for now, are highly speculative. The global AI race is far from over, and forthcoming products from Silicon Valley could leap ahead once again. At the very least, U.S. tech companies may have to reconsider whether the best way to build AI is by keeping their models a secret.

Illustration by The Atlantic. Source: Getty.

China’s DeepSeek Surprise

By Matteo Wong

One week ago, a new and formidable challenger for OpenAI’s throne emerged. A Chinese AI start-up, DeepSeek, launched a model that appeared to match the most powerful version of ChatGPT but, at least according to its creator, was a fraction of the cost to build. The program, called DeepSeek-R1, has incited plenty of concern: Ultrapowerful Chinese AI models are exactly what many leaders of American AI companies feared when they, and more recently President Donald Trump, have sounded alarms about a technological race between the United States and the People’s Republic of China. This is a “wake up call for America,” Alexandr Wang, the CEO of Scale AI, commented on social media.

But at the same time, many Americans—including much of the tech industry—appear to be lauding this Chinese AI. As of this morning, DeepSeek had overtaken ChatGPT as the top free application on Apple’s mobile-app store in the United States. Researchers, executives, and investors have been heaping on praise. The new DeepSeek model “is one of the most amazing and impressive breakthroughs I’ve ever seen,” the venture capitalist Marc Andreessen, an outspoken supporter of Trump, wrote on X. The program shows “the power of open research,” Yann LeCun, Meta’s chief AI scientist, wrote online.

Read the full article.

What to Read Next

The GPT era is already ending: “The release of o1, in particular, has provided the clearest glimpse yet at what sort of synthetic ‘intelligence’ the start-up and companies following its lead believe they are building,” I wrote in December. The new AI panic: “The obsession with frontier models has now collided with mounting panic about China, fully intertwining ideas for the models’ regulation with national-security concerns,” Karen Hao wrote in 2023.

P.S.

After several major tech executives announced their support for Donald Trump, many liberal internet users are now alleging that they are being censored on certain social-media platforms. “To some, this pattern was as unmistakable as it was malicious,” my colleague Kaitlyn Tiffany writes. “Social media was turning against Democrats.” And they are panicking.

— Matteo

If Iranian Assassins Kill Them, It Will Be Trump’s Fault

The Atlantic

www.theatlantic.com › politics › archive › 2025 › 01 › iran-death-threats-trump-staff › 681510

Donald Trump likes to tell his supporters that he’s a fighter, a fearless champion who always has their back. Such guarantees, however, apparently do not apply to people who worked for him when they’re threatened by foreign assassins. Former Chairman of the Joint Chiefs of Staff Mark Milley, former National Security Adviser John Bolton, former Secretary of State Mike Pompeo, and the former Pompeo aide Brian Hook have all been targeted by Trump for political retribution. They are also being targeted by the Iranians, but the regime in Tehran has marked them all for death.

The president may be spoiling for a fight with career bureaucrats and “woke” professors, but when it comes to Iranian assassins, he is willing to walk away from men who carried out his orders. Milley, Bolton, Pompeo, and Hook all served in Trump’s first administration—he appointed them to their posts—and they were part of the Trump national-security team when the United States killed Iranian General Qassem Soleimani in a strike in January 2020. In 2022, an Iranian national was arrested and charged with trying to arrange Bolton’s murder, and American intelligence believes that other officials—including Trump himself—have been targeted by Iran because of their involvement in killing Soleimani.

The Biden administration briefed the incoming Trump administration on these threats and on the security details it had authorized to protect Bolton and others. Last week, Trump removed the details protecting Bolton, Pompeo, and Hook; yesterday, Secretary of Defense Pete Hegseth removed the guards around Milley and announced that he would be investigating Milley for undermining the chain of command during Trump’s first term. Trump also revoked the security clearances held by all four men.

[From the November 2023 issue: The patriot]

The revocation of security clearances is petty, but it harms the administration more than it does any of these men. Retaining a clearance helps former federal employees find work in the consulting world, and it is typical to hold on to them after leaving government service. (I was offered the opportunity to keep mine when I left the Naval War College.) But at more senior levels, clearances allow people in government to get advice from former leaders. Some of these people could have been of significant help to Trump’s staff during a crisis, although Trump himself is unlikely to care about that possibility.

Removing the security details, however, could have deadly consequences. The Iranians seem determined to seek revenge for the killing of Soleimani, and sooner or later, they might succeed. (“The Iranians are not good but they’re very enthusiastic,” a former Pentagon official said in October. “And of course, they’ve only got to get lucky once.”) And the Iranians aren’t the only threat out there; the Russians have no compunctions about attacking people in their home country, often using gruesome methods.

Trump takes such threats very seriously where he is concerned. When Biden officials alerted Trump to the danger from Iran, Trump asked for more security from the U.S. government, and during his campaign, according to The New York Times, he even asked that military assets be assigned to protect him, something usually provided only to sitting presidents.

Lesser mortals, however, must fend for themselves: Trump and Hegseth not only took away the security details of these former policy makers but did so with significant publicity, almost as if to broadcast to America’s enemies that anyone who wanted to settle scores with these officials would get no trouble from the current White House. (Trump also canceled protection for 84-year-old Anthony Fauci, the former director of the National Institute of Allergy and Infectious Diseases, who has been the target of multiple threats from other Americans.) Trump despises critics such as Bolton and Milley, and it is unsurprising that he has no obvious issue subjecting them to physical danger. But even some Republicans —who should be used to this kind of vengefulness from the leader of their party—have been shocked, and are trying to get Trump to reverse course. They are particularly concerned about Pompeo and Hook, loyalists whose lives have been placed in jeopardy for sins that are known only to the president.

[Read: Trump can’t escape the laws of political gravity]

In another time, Americans would rally to protect their own from the agents of one of their most dedicated enemies. Today, most citizens seem either unaware or unperturbed that the president of the United States is exposing his own former staff to immense risks. Nevertheless, it should be said clearly and without equivocation: President Trump will bear direct responsibility for any harm that could come to these people from foreign actors.

This is far more than Trump’s usual pettiness. He has always considered the oath of federal service to be little more than an oath of loyalty to him, and he has always been willing to threaten his opponents. (In 2018, he apparently considered handing Michael McFaul, the former U.S. ambassador to Russia, over to Moscow, a move that provoked a level of outrage that seems quaint today.) Trump’s message in this second term is that friends and subordinates are literally disposable if they cross him: He will not only humiliate and fire them, but he will also subject them to actual physical danger.

This escalation of Trump’s vindictiveness should serve as a very personal warning to anyone willing to work for him in his second term. Senior officials at the Pentagon, the State Department, the CIA, the National Security Council, and other organizations are routinely asked to go head-to-head with representatives of some of the most dangerous nations on the planet, and to contribute to operations against those regimes. In the past, such officials could do so knowing that their own government would do everything it could to keep them—and their family—safe from foreign agents. As one of Bolton’s former deputies, Charles Kupperman, told the Times: “Trump’s national security team must provide guidance based on their assessment of what needs to be done to protect America without regard to their personal security.”

Good luck with that. No one who works in defense or national-security affairs can assume that, when Trump orders them to cross America’s many enemies in the world, he will protect them from foreign vengeance. Trump has now made clear that he will abandon people who have taken risks in the service of the United States—even those who were following his own orders—if they happen to displease him. (Or, in the case of Pompeo and Hook, for no apparent reason at all.) Hegseth, for his part, may have no real idea what he’s done, and may merely be courting favor from a boss who has elevated him far beyond his abilities. But Trump knows better; he is himself the survivor of an assassination attempt, and no level of security was enough when he thought the Iranians were gunning for him.

People still considering whether to serve Trump can have no illusions about what awaits them. True leaders take responsibility for their team. Trump is no such leader; he will, on a whim, place other Americans in danger and then, as he famously put it in his previous term, take no responsibility at all.

RFK Jr. Has a Lot to Learn About Medicaid

The Atlantic

www.theatlantic.com › health › archive › 2025 › 01 › rfk-jr-hearing-medicaid › 681504

Put on the spot, a lot of Americans might hesitate over the difference between Medicaid and Medicare. People who aren’t affected by one of these programs, which together enroll about 150 million people in the U.S., don’t generally have a need to be well versed in their intricacies, and the two programs sound quite similar. The names don’t really hint that Medicare is a federal program that covers older Americans and Americans with disabilities, and that Medicaid covers low-income people in the United States.

Most Americans, though, are not nominated to become secretary of the Department of Health and Human Services. Robert F. Kennedy Jr. is. And yet today, at his confirmation hearing before the Senate Finance Committee, he made clear that he also does not know very much about Medicare and Medicaid.

As HHS secretary, Kennedy would oversee a suite of government agencies, including the FDA, CDC, and National Institutes of Health, that are focused on improving American health. He also would oversee the Centers for Medicare and Medicaid Services, which, as the name implies, manages those two programs. HHS services, in other words, touch the lives of every American—and Medicaid and Medicare are, in particular, two of the most common ways for people to directly benefit from the government’s services.

During the three-and-a-half-hour hearing, in which the Senate committee pressed Kennedy on a range of issues—his anti-vaccine views, endorsements of conspiracy theories, stance on abortion, potential financial conflicts—senators grilled Kennedy on various aspects of the two government programs. In his new role, Kennedy could be charged with overseeing substantial changes to one of them. Donald Trump has pledged to preserve Medicare. He has made no such promise about Medicaid, which health-policy experts anticipate may be targeted for spending cuts. (On Tuesday, Medicaid reimbursement portals abruptly stopped working after the Trump administration ordered a freeze on federal grants and loans; states have since regained access to the portals.) Some Republicans have argued that an increased focus on public-health insurance in the U.S. won’t make Americans healthier, and Kennedy appeared to echo that viewpoint today when he criticized Medicaid, saying “our people are getting sicker every single year,” and lamented the program’s expansion to people with higher incomes. “The poorest Americans are now being robbed,” he said.

But Kennedy also seemed to mix up the two programs when he described them. Part of the issue with Medicaid, he said, is that “the premiums are too high, the deductibles are too high.” The majority of people enrolled in Medicaid don’t pay premiums or deductibles; federal law actually prohibits premiums for the program’s lowest-income enrollees. (He did seem better versed in Medicare Advantage, a program that provides private insurance coverage for older Americans and that he himself is enrolled in.)

To be fair, Kennedy was in a high-pressure situation. But being HHS secretary is a high-pressure job. Kennedy had time to prepare in advance of today’s hearing. If confirmed, he won’t need to master every minute detail of Medicare and Medicaid, but he will need to be able to navigate both programs—their differences, their weaknesses, and how they might evolve. People who are eligible for both programs, for instance, have created sticking points in the health-care system, in part because coordinating coverage between the two is difficult and can complicate care. When pressed by Senator Bill Cassidy of Louisiana on how to deal with that issue, Kennedy suggested that the programs should be “consolidated” and “integrated”—but when asked how that might happen, said, “I’m not exactly sure.”

Kennedy struggled with other policy specifics, too. One of his goals, Kennedy said, is to fulfill Trump’s directive to improve the quality of care and lower the price of care for all Americans. But he was vague on any plans to reform Medicaid, explaining that he’d “increase transparency” and “increase accountability.” When pushed by Cassidy to clarify, Kennedy said, “Well, I don’t have a broad proposal for dismantling the program.”

Nor did Kennedy have a clear sense of how he would approach one of the more contentious and legally sensitive health questions of the past few years: whether women whose lives are threatened by pregnancy should be able to receive emergency abortions under EMTALA, the law that requires emergency rooms that receive Medicare funding to provide care to anyone in a life-threatening situation. The Biden administration argued that this federal law supersedes state abortion bans, and in 2024, after the Supreme Court demurred on the issue, the administration made clear to doctors, in a letter co-authored by Health and Human Services Secretary Xavier Becerra, that abortions could qualify as emergency treatment. Kennedy admitted this morning that he didn’t know the scope of the authority he’d have to enforce the law in his new job.

Jacinda Abdul-Mutakabbir, a clinical pharmacist at UC San Diego, told me that Kennedy's apparent failure to understand the intricacies of the two programs wasn’t just a harmless fumble. If the health secretary is not well versed in the programs he’s tasked to run, he might not appreciate the impacts of his decisions. Should health coverage for some of the most vulnerable Americans be altered—perhaps even taken away—then health disparities in this country would likely widen. And if any part of his agenda does include increasing transparency, as Kennedy described in today’s hearing, expertise will have to be a prerequisite. “You can’t increase transparency on something you don’t have clarity on,” Abdul-Mutakabbir told me. (Kennedy’s press team did not immediately return a request for comment on his performance at today’s hearing.)

During the hearing, Kennedy’s more radical views on vaccines and infectious disease did come up. He copped to describing Lyme disease as “highly likely a militarily engineered bioweapon.” (The bacterium, which has been around for at least tens of thousands of years, is not.) He stood by his assertion that the measles vaccine killed two children in Samoa in 2018. (The vaccine did not; those children died following the administration of an improperly mixed vaccine by two nurses who were ultimately sentenced to five years in prison for the act.) He said that young children are at “basically … zero risk” from COVID-19. (Young children are at risk, especially babies under six months of age, who have similar hospitalization rates from the disease as adults 65 to 74 years old.) Kennedy’s falsehoods about infection and immunity were already well known, though. What the country learned today was that he may lack basic competency in some of the most wide-reaching aspects of his future job—and didn’t take the time to prepare answers for Congress, which he’ll ultimately have to answer to.

X and Meta Scramble to Settle With Trump

The Atlantic

www.theatlantic.com › politics › archive › 2025 › 01 › trump-meta-x-settlements › 681503

Donald Trump spent decades in business gleefully suing and angrily being sued by his adversaries in civil court. But since winning reelection, he has suddenly posted a remarkable string of legal victories, as litigants rush to settle their cases.

On November 20, 2024, lawyers for Trump and Elon Musk’s company X, filed a joint letter to the Ninth Circuit Court of Appeals in San Francisco without press release or fanfare. That court was expected to rule on the legal merits of a set of 2021 lawsuits that Trump had filed against X, Facebook, and YouTube, alleging that the companies had unlawfully removed his social media accounts under government pressure weeks after the January 6, 2021, attack on the U.S. Capitol.

Oral arguments in 2023 had gone poorly for Trump, and many legal observers saw little hope for him. As recently as August 2024, nearly two years after Musk took over the company formerly known as Twitter, X had filed a brief with the Ninth Circuit arguing that Trump’s case lacked merit and that it had been properly dismissed by a lower court.

[Read: Why Trump won’t stop suing the media and losing]

Now, the attorneys told the court in the November letter, no ruling would be needed in the case. “We write to advise the court that the parties are actively discussing a potential settlement,” read the joint letter, which was also signed by lawyers for Trump’s co-plaintiffs.

The attorneys did not explain the sudden shift in strategy. The merits of the case had not changed, but the broader context had: The litigants were no longer adversaries, and the plaintiff was about to become president of the United States. Musk had just spent more than $250 million to help elect Trump, moved into his Palm Beach property, accepted a position as a transition adviser, and was celebrating his new nickname—“first buddy.” The day before the letter was filed, Trump had appeared in South Texas with Musk to watch the launch of Musk’s latest Starship rocket.

In seeking to settle with Trump, X, it turned out, was at the start of a trend. A series of litigants that have fought the newly reinstated president in court, in some cases for years, have now lined up to negotiate. ABC News and its parent company, Disney, settled with Trump in December.

Meta CEO Mark Zuckerberg, who had been threatened with jail by Trump as recently as September, traveled to Mar-a-Lago on January 10 to negotiate a settlement with Trump in the Facebook case, which named Zuckerberg personally as a defendant. The deal they struck, according to two people briefed on the agreement who requested anonymity to discuss the arrangement, will cost Meta $25 million in damages and legal fees, a remarkable turn of events that coincided with other demonstrations by Zuckerberg of new fealty toward Trump. The Wall Street Journal reported today that $22 million will go to fund Trump’s presidential library, with the rest going to legal fees and the other plaintiffs.

“We don’t have any comment or guidance to offer,” Meta spokesman Andy Stone told me in a text message, before confirming the $25 million settlement.

These agreements stand to give the most litigious president in American history symbolic victories for himself and financial victories for his legacy. The settlement negotiations raise the question of whether Trump is using his new powers to bully his legal opponents into submission, and whether the litigants are seeking to purchase favor as they try to navigate the many regulatory threats from his new government.

Neither X nor the president’s legal team have publicly disclosed the terms of their settlement discussions with Trump, or even confirmed whether the cases have been settled. Ari Horltzblatt, the attorney for X who filed the settlement notice in the Ninth Circuit, declined to comment when reached by phone. The White House did not respond to a request for comment.

Multiple co-plaintiffs with Trump, who filed his 2021 case as class action lawsuits, also declined to comment this week when reached by The Atlantic. “No comment at this time,” Jennifer Horton, a Michigan school teacher who lost her Facebook account after posts that were flagged for COVID misinformation, wrote to me in a text message. “Check back with me later in week. I can’t talk right now,” radio host Wayne Allyn Root, who lost his Twitter account, wrote in an email.

[Paul Rosenzweig: It’s not amateur hour anymore]

Trump based his 2021 legal crusade against the social media giants on the assertion that they banned his accounts because of government pressure, in violation of the First Amendment. His co-defendants, including the feminist writer Naomi Wolf, have claimed substantial financial harm—“at least $1 million,” in Wolf’s case—from having their own accounts banned. The companies have argued that Trump has failed to show clear evidence that their decisions were directly dictated by a government power. Trump’s argument also has been complicated by the fact that he ran the federal executive branch at the time that his accounts were shut down; Joe Biden was still president-elect.

Ironically, some legal observers argue that Trump might now be committing the very sin that he accused Democrats of perpetrating against him—using the power of his incoming presidency to pressure private companies to take actions for his personal benefit. They worry the companies are agreeing to settlements less from fear that they would lose in court than fear that they would win.

“Trump may be doing what he claimed Biden was doing but he never really did,” Eric Goldman, a professor of law at Santa Clara University who has been tracking the X and Meta cases, told me. “If there is a cash settlement, it is because it’s just a staggering economic transaction to buy influence.”

The precedent for such legal surrender was established late last year by ABC News, which had been sued by Trump for defamation; the case concerned comments by the network host George Stephanolopolous that Trump had “been found liable for rape,” when a New York court had found him liable for sexual abuse under state law—though the judge later clarified that the behavior in question was “commonly considered ‘rape’ in other contexts.” ABC News struck a settlement with Trump in mid-December that sent $15 million from parent company Disney to help build his future presidential library and paid $1 million in legal fees, shocking First Amendment attorneys. (Attorneys for Disney had concluded that the case posed substantial risk, The New York Times reported, and that the settlement was a small price to pay to resolve it.)

The Wall Street Journal reported earlier this month that the parent company of CBS News, Paramount Global, was considering a settlement with Trump over his $10 billion claim that 60 Minutes illegally interfered with the election by favorably editing an interview with Vice President Kamala Harris. Paramount is in the process of merging with Skydance Media, a deal that would require approval by Trump appointees. “We have no comment,” Paramount Global spokesman Justin Dini told me in a statement.

Trump has also sued Gannett, the owner of The Des Moines Register, alleging consumer fraud for a poll the Register published before the 2024 election that showed Harris with a lead over Trump in Iowa days before the election. (Trump won the state.) Gannett has signalled that it intends to contest the case in federal court.

The Founding Fathers, for all their foresight, did not concern themselves with the possibility that a future president might use civil litigation to extract money or fealty. The U.S. criminal code does little to prevent the president, who is exempt from its primary conflict of interest provisions, from continuing civil litigation or profiting from court cases once he takes office.

[Read: The strategy behind Trump’s policy blitz]

Richard Painter, the chief White House ethics lawyer for President George W. Bush, told me that the current situation gives enormous power to a president who has indicated a willingness to use litigation to get his way. “What law prevents him from basically extorting media companies? Absolutely no law at all,” Painter said. “These suits are going to settle. It is not just the money he is getting from it. We are going to have the media be cowed by the president of the United States.”

The Trump case against YouTube and Sundar Pichai, the CEO of parent company Google, filed in 2021 with the X and Meta cases, has been lying dormant in a Northern California courtroom since December 2023, pending the outcome of the Ninth Circuit appeal of the case against X.

Musk’s decision to settle before an opinion now opens the possibility that the YouTube case will be revived unless that company too seeks a settlement. Jose Castañeda, a spokesperson for Google, declined this week to comment on the company’s legal strategy.

Trump’s Latin American Gamble

The Atlantic

www.theatlantic.com › international › archive › 2025 › 01 › trump-colombia-latin-america › 681493

For a moment on Sunday, the government of Colombia’s Gustavo Petro looked like it might be the first in Latin America to take a meaningful stand against President Donald Trump’s mass-deportation plans. Instead, Petro gave Trump the perfect opportunity to show how far he would go to enforce compliance. Latin American leaders came out worse off.

On Sunday afternoon, Petro, a leftist who has held office since 2022, announced on X that he would not allow two U.S. military aircraft carrying Colombian deportees to land. He forced them to turn back mid-flight and demanded that Trump establish a protocol for treating deportees with dignity.

Colombia had quietly accepted military deportation flights before Trump’s inauguration, according to the Financial Times. But the Trump administration began flaunting these flights publicly, and some deportees sent to Brazil claimed that they were shackled, denied water, and beaten. Petro saw all of this as a step too far, and reacted. He clarified that he would still accept deportations carried out via “civilian aircraft,” without treating migrants “like criminals” (more than 120 such flights landed in Colombia last year).

Trump responded by threatening to impose 25 percent tariffs on all Colombian goods (to be raised to 50 percent within a week), impose emergency banking sanctions, and bar entry to all Colombian-government officials and even their “allies.” The message was clear: To get his way on deportations, he would stop at nothing, even if this meant blowing up relations with one of the United States’ closest Latin American partners.

[Quico Toro: Trump’s Colombia spat is a gift to China]

Petro almost immediately backed down. He seemed to have taken the stand on a whim, possibly in part to distract from a flare-up in violence among armed criminal groups inside his country. The White House announced that Colombia had agreed to accept deportation flights, including on military aircraft. Petro gave a tepid repost, then deleted it.

For Trump, the incident was a perfect PR stunt, allowing him to showcase the maximum-pressure strategy he might use against any Latin American government that openly challenges his mass-deportation plans and offering a test case for whether tariffs can work to coerce cooperation from U.S. allies. For Latin America, the ordeal could not have come at a worse time.

Across the region, leaders are bracing for the impact of deportations—not only of their own citizens, but of “third-country nationals” such as Venezuelans, Nicaraguans, and Cubans, whose governments often refuse to take them back. They are rightfully worried about what a sudden influx of newcomers and a decline in remittance payments from the United States will mean for their generally slow-growing economies, weak formal labor markets, and strained social services, not to mention public safety, given the tendency of criminal gangs to kidnap and forcibly recruit vulnerable recent deportees.

If Latin American governments are trying to negotiate the scope or scale of deportation behind closed doors, they do not appear to be having much success. Several leaders seem to be losing their nerve. Mexico’s president, Claudia Sheinbaum, went from expressing hope for an agreement with the Trump administration to receive only Mexicans to accepting the continued deportation of noncitizens—perhaps because Trump threatened to place 25 percent tariffs on all Mexican goods as soon as February 1. Honduras threatened to expel a U.S. Air Force base on January 3 if the United States carried on with its deportation plans. By January 27, Honduras folded, saying that it would accept military deportation flights but requesting that deportees not be shackled. Guatemala is trying to draw the line at taking in only fellow Central Americans.

Most Latin American leaders will bend to Trump’s wishes on mass deportation rather than invite the strong-arm tactics he threatened to use on Colombia. One reason is that tariffs can really hurt the countries whose cooperation Trump needs most on deportations. Unlike most of South America, Mexico, Colombia, Guatemala, Honduras, and El Salvador still trade more with the United States than with China. Only with Mexico, the United States’ largest trade partner, does the leverage go both ways, but even there it is sharply asymmetrical (more than 80 percent of Mexican exports go to the U.S., accounting for nearly a fifth of the country’s GDP).

Latin American countries could improve their bargaining position by taking a unified stand and negotiating with Trump as a bloc. But the chances that they will do so are slim and getting slimmer. Today, Honduran President Xiomara Castro called off a planned meeting of the Community of Latin American and Caribbean States, a left-leaning regional bloc, to discuss migration, faulting a “lack of consensus.”

[Juliette Kayyem: The border got quieter, so Trump had to act]

Latin American presidents have relatively weak incentives to fight Trump on migration. The region is home to more than 20 million displaced people, millions of whom reside as migrants or refugees in Mexico, Colombia, Peru, and elsewhere—and yet, migration is simply not that big of a diplomatic political issue in most countries. That could change if deportations reach a scale sufficient to rattle economies, but Latin American leaders are focused on the short term, much as Trump is. Presidential approval ratings tend to rise and fall based on crime and the economy more than immigration, and at least for now, anti-U.S. nationalism is not the political force it has been in the past.

So Trump will likely get his way in more cases than not. But he shouldn’t celebrate just yet, because the short-term payoff of strong-arming Latin America will come at the long-term cost of accelerating the region’s shift toward China and increasing its instability. The latter tends, sooner or later, to boomerang back into the United States.

“Every South American leader, even pro-American ones, will look at Trump’s strategy vis-à-vis Panama, Colombia, and Mexico and understand the risks of being overly dependent on the U.S. right now. The majority will seek to diversify their partnerships to limit their exposure to Trump,” Oliver Stuenkel, a Brazilian international-relations analyst, posted on X in the middle of the Colombia standoff. He’s right. Latin American leaders, even several conservative ones, moved closer to China during Trump’s first term, which is not what Trump wants. Reducing China’s presence in Latin America seems to be his No. 2 priority in the region (see his threats to Panama over the Hong Kong company operating near its canal). Chinese investments in dual-use infrastructure and 5G technology pose long-term national-security risks to the United States. But Trump’s tariff threats and coercion could rattle Latin America and help China make its sales pitch to the region: We’re the reliable ones. The long-standing lament that Latin American conservatives, centrists, and leftists share is that whereas the United States comes to the region to punish and lecture, China comes to trade. Trump’s current approach gives that complaint extra credence.

[From the September 2024 issue: Seventy miles in hell]

Trump’s deportation plans threaten to destabilize parts of Latin America, which will have repercussions for the United States. The arrival of hundreds of thousands of people to countries without the economic or logistical capacity to absorb them could leave the region reeling. Consider that the Trump administration is negotiating an asylum agreement with El Salvador—a country with one of the weakest and smallest economies, and highest rates of labor informality, in all of Central America. If Venezuelans, Nicaraguans, and Cubans are sent there, they are almost guaranteed not to find jobs. People deported to Honduras and Guatemala will also likely struggle to find work and face recruitment by gangs. And because remittances make up about a fifth of GDP in Guatemala and about a quarter in El Salvador, Honduras, and Nicaragua, large-scale deportations threaten to deliver a brutal shock to their economies. Mexico’s economy is bigger and sturdier, but economists have shown that large influxes of deportees there, too, tend to depress formal-sector wages and increase crime. The inflow of workers might still benefit economies like Mexico’s in the long run. But in the short to medium term, Trump’s mass-deportation plans are a recipe for instability.

The lesson of the past several decades—Trump’s first term included—is that Latin American instability never remains contained within the region. It inevitably comes boomeranging back to the United States. Mexican cartels didn’t gain far-reaching influence just in their country. They fueled a fentanyl epidemic that has killed more than a quarter million Americans since 2018. Venezuela’s economic collapse under authoritarian rule didn’t bring misery only upon that country; it produced one of the world’s biggest refugee crises, with more than half a million Venezuelans fleeing to the United States. Instability nowhere else in the world affects the United States more directly, or profoundly, than that in Latin America.

In the 1980s and ’90s, internal armed conflicts raged in Colombia and Central America, and Mexico confronted serial economic crises. Since then, the United States’ immediate neighbors have become relatively more stable, democratic, and prosperous. But slow growth, fiscal imbalances, and, above all, the growing power of organized crime have tested that stability in recent years. Trump is adding to the pressure with mass deportations—then hoping to contain whatever erupts by simply hardening the southern border. That’s quite the gamble.