The risks Chile faces under Trump 2.0

Chile faces three direct risks when it comes to relations with the United States during Donald Trump’s second presidency, according to former foreign minister Heraldo Muñoz. 

The risks could endanger the free trade agreement signed by the two countries in 2003, he said.

"Chile has to get ready to defend its successful free trade agreement [with the US], which has also been favorable to the US in terms of the trade balance, and that's always important to Trump," Muñoz, whose last year in office coincided with the first year of Trump's previous term in 2017 during Michelle Bachelet's second term, said during a webinar hosted by the Chile Pacific Foundation.

Trump has already announced 25% tariffs on steel and aluminum imports and has signaled that copper, of which Chile is the world's largest producer, could follow suit. 

The US only accounts for 11% of Chile's copper exports, compared to China's 52%, though Muñoz still considers this a direct challenge.

Another possible risk is the potential end of Chile's participation in the US visa waiver program, which has been requested by members of the Republican party.

But the most concerning issue, according to Muñoz, is a letter from US insurers sent to Chilean President Gabriel Boric last month expressing opposition to a recently passed pension reform.

The letter, signed by the CEO of the American Council of Life Insurers, David Chavern, claimed the reform violates bilateral agreements by "expropriating" US investments in Chile.

ACLI members Metlife, Principal Financial Group and Prudential Financial have shares in Chilean pension funds.

"That's the most serious threat because any of those CEOs, be it jointly or separately, can just pick up the phone," Muñoz said, pointing to Trump's close ties with business leaders.

"What these businesses are doing is to pressure for a hypothetical revision of the free trade agreement," he added.