Costa Rica: Embracing Trump Without Breaking Ties with China

Elected in the first round, breaking a nearly two-decade-long tradition of runoffs, Laura Fernández will take position president position Costa Rica on May 8, with the priority of consolidating the country’s current economic momentum and reducing the rising levels of insecurity seen in recent years. She will face the challenge continuing to foster the rapport her predecessor and party leader, Rodrigo Chaves, established with the Trump administration, while avoiding friction with China. Washington’s new Monroe Doctrine could push neighboring countries in the hemisphere into conflict with Beijing, which could jeopardize Costa Rica’s economic boom—at least in macroeconomic terms.

On February 1, conservative Laura Fernández won the Costa Rican presidency with 48.3% of the vote in an election in which the economic situation was the top priority for Costa Ricans. First serving as Minister of National Planning and Economic Policy and later as Minister of the Presidency under Rodrigo Chaves, Fernández benefited from the public’s desire for continuity in the public policies of her predecessor, who—unable to seek a second term—has reached the end of his presidency with a high approval rating of 58%.

In addition to economic issues, the election campaign was dominated by the discussion public safety in a country that has seen a worrying rise in the homicide rate due to the growing presence of drug trafficking and organized crime. In 2021, before Chaves took office, there were 11.5 homicides per 100,000 inhabitants; in 2023, the rate reached a record high of 17.7. The Chaves administration was able to take action; in 2024, the rate dropped to 17, and in 2025 to 16.8.

Economic progress and the perception that the rise in crime has been curbed contributed both to Fernández’s election and to support for the ruling party, the Sovereign People’s Party (PPSO), in the Legislative Assembly elections, in which it won 31 of the 57 seats, compared with the 8 it won four years ago.

The Trump Corollary

In the U.S. National Security Strategy, published last November, the Trump administration places its primary focus on the Western Hemisphere itself, prioritizing security issues, reaffirming U.S. commercial and economic interests in the region, and proposing a strong counterweight to China’s growing influence in Latin America. The document refers to this renewed interest in the U.S. “backyard” as the Trump Corollary to the Monroe Doctrine. The objectives of this corollary can be summarized as “enlist and expand.”

“Enlist” refers to strengthening ties with allied countries in the region to combat irregular migration flows, combat drug trafficking, and foster the growth of a strong private sector, among other objectives. Any government or political movement in the region aligned with U.S. objectives would be rewarded. “Expand” focuses more on gaining influence in countries that in recent decades have drifted away from Washington and drawn closer to external powers, specifically China. The Trump Administration wants to reduce those external influences and achieve a “tolerably stable” environment in the region, thereby protecting U.S. security interests and eliminating the skill its hemispheric dominance.

In recent months, this strategy has been put into action on numerous occasions, such as in the use of military force against vessels linked to drug trafficking in the Caribbean and the Pacific, the capture of Nicolás Maduro during an attack on Caracas, and the operation that led to the death of drug lord Nemesio Oseguera, alias “El Mencho,” which was supported by U.S. intelligence.

Costa Rica Faces a New Reality

In this context, Laura Fernández intends to continue her predecessor’s security policy, promoting a full-scale crackdown on organized crime, including the passage of judicial reforms to expedite sentencing and the construction of a mega-prison modeled after El Salvador’s CECOT. In addition, the president-elect says she is committed to trade liberalization, technological innovation, and tax cuts. Both of these policy priorities align with Trump’s strategic vision.

From this perspective, we can expect the already strong relations between the Trump administration and Costa Rica to grow even stronger. Costa Rica’s relative stability compared to its Central American neighbors makes the country an attractive and reliable ally, positioning it as a potential anchor of democracy in contrast to Nicaragua, and adding it to the network allies in Central America that the Trump administration has been building. Costa Rica could become a platform for the fight against drug trafficking and even serve as a safety valve for Central American migration flows.

Costa Rica could also potentially emerge as a strong ally in the United States’ “friendshoring” or “nearshoring” process, as the U.S. seeks to reduce its reliance on China for manufacturing. Costa Rica already has the technical capabilities to operate as a close, allied manufacturing hub: it is a party to agreement U.S.-Central America agreement (CAFTA-DR), and through its export processing zones, it has become a core topic exporter core topic medical devices, establishing itself as the world’s issue exporter in that sector.

If Fernández prioritizes his plan to modernize digital infrastructure and maintains the tax incentives implemented by Chaves, Costa Rica could gain prominence as a U.S. manufacturing hub in Central America. However, closer economic ties with the United States would, in agreement Trump’s demands, require distancing the country from China, and that could jeopardize the country’s current economic momentum.

Relations with China

In 2007, Costa Rica became the first Central American nation to sever diplomatic ties with Taiwan and establish them with the People’s Republic of China. This opening toward Beijing has led to an increase in trade with the Asian superpower, which has become Costa Rica’s second-largest partner , though still far behind the United States (in 2024, China accounted for 17.2% of Costa Rican imports and was the destination for only 2.72% of the Central American nation’s exports).

Aware of the importance of the relationship with the United States, President Chaves agreed to ban Chinese company Huawei’s technology from the network to be rolled out in Costa Rica, hoping that U.S. companies will set up operations in the country without fear of alleged cybersecurity risks. However, there is a clear dilemma between maintaining a pragmatic balance between the two powers or aligning completely with Washington, which would entail greater scrutiny of Chinese investment in the country.

Although Laura Fernández is considered somewhat more right-leaning than her predecessor, the new president has indirectly ruled out reversing the decision to recognize China. She has insisted that her priority is to maintain the country’s current economic momentum (GDP grew by average 5% average Chaves’s term), and that depends on not creating major problems with China. Indeed, the strong macroeconomic figures are largely due to the steady increase in exports over the past few decades, which has allowed for a consistent reduction in the trade deficit, as reflected in the evolution of the current account balance.