(MENAFN- The Rio Times) From the outside, Latin America still looks like a growth story. Containers leave Santos, Veracruz and Cartagena full; China keeps buying soy and copper; European demand for food and metals is solid.

But behind those busy ports, something more worrying is happening: investors are quietly cancelling or delaying the factories, logistics hubs and plants that should power the region's next decade.

A new report from the UN's Economic Commission for Latin America and the Caribbean says announced foreign direct investment projects in the region collapsed to about 31.4 billion dollars in the first half of 2025.

That is 53 percent less than a year earlier and 37 percent below the average of the past decade. The damage is worst in export-driven sectors that depend on selling into the United States.

Planned projects in autos are down 76 percent, auto parts 87 percent, industrial equipment 48 percent, consumer goods 65 percent, and metals and minerals 65 percent.



The trigger is not a classic Latin American crisis but Washington's tariff turn. Since early 2025, the US has imposed a general 10 percent tariff on most imports and tougher duties on selected partners.

On average, Latin American and Caribbean exporters now face about 10 percent, but with big gaps: roughly 33 percent on Brazil, 20 percent on Uruguay, 18 percent on Nicaragua.

Mexico sits closer to 8 percent thanks to its North American trade deal, which still shields many exports. Faced with moving targets and political noise, boardrooms do what they always do: they wait.

Paradoxically, trade itself is still growing. The report projects regional goods exports rising about 5 percent this year, driven by a 4 percent increase in volumes and a modest 1 percent price gain.

Sales to China are expected to climb 7 percent, to the European Union 6 percent and to the United States 5 percent, while trade inside the region barely moves at around 1 percent.

Imports should grow 6 percent as volumes rise 7 percent and prices fall 1 percent. For investors and observers, the lesson is simple but uncomfortable.

Latin America's headline trade numbers can look fine while the real engine of development – long-term private investment – stalls under a mix of tariff politics and old reflexes about protection and state control.

Countries that offer stable rules, open trade deals and a clear welcome to capital are likely to capture the factories and jobs that more hesitant neighbors lose. The cranes you see today may still be busy, but the real question is whether anyone is signing contracts for the cranes of 2030.

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