Marco Rubio’s visit on February 4–5 will be important for the bilateral relationship between Guatemala and the United States. On the top of the agenda will be illegal immigration, narcotics trafficking, and China’s growing influence in the region.
Unlike Colombia and Honduras, whose governments are fundamentally anti-American, Guatemala has the best position to negotiate successfully with Secretary of State Rubio. After all, the government of Guatemala (GOG) has maintained its traditional support for Israel and Taiwan, unlike other countries in the region.
Guatemala and the United States have many common interests, especially under the Donald Trump administration’s new foreign-policy focus. In particular, US interests align with those of the formal private sector and the GOG. The private sector has been an advocate of closer ties with the United States, as opposed to China, and the GOG has followed suit.
Guatemala needs more US foreign direct investment (FDI), concentrated in infrastructure, as well as better framing and messaging regarding the Guatemalan brand. Thanks in great part to attacks by the US State Department (DOS), Guatemala—and its private sector, in particular—has been posited as the poster child of corruption on the world stage. According to the World Bank, whose president is typically placed by the United States, Guatemala scores worse on control of corruption than failed states such as Afghanistan. In light of these US-led attacks, US FDI to Guatemala has declined by 37 percent in the last five years, while FDI from the rest of world to Guatemala has increased by 68 percent.
Foreign aid is also misallocated in Guatemala. Social media is rife with criticism of USAID’s mistakes (or sabotage). Guatemala is the case study of ill-spent USAID funds taken from the US taxpayer. Should USAID continue to exist, Guatemala should ask for a redirection of funds: away from political areas and towards economic and humanitarian areas.
Cutting all USAID programs equally would be counterproductive. Those like the Regional Disaster Assistance Program in Latin America should be kept. Disasters such as floods, hurricanes, and famines spur illegal immigration. That said, programs with a political bent—and no established results regarding development and illegal immigration—should be eliminated.
Guatemala has remained the United States’ number-one advocate in Latin America. US-Guatemala cooperation on military, security, and drug-interdiction matters is the best in the region. DOS officials involved in sensitive drug-interdiction matters can attest to the cooperation and good faith shown by the Guatemalan Attorney General’s Office over the last few years.
Guatemala’s fidelity to the common interests shared with the United States notwithstanding, Guatemala has not seen reciprocation in trade and FDI. China, meanwhile, has become the second most important country for Guatemalan imports and is in the top 10 of Guatemala’s export destinations, based on the dollar value of trade.
US-Guatemala relations, therefore, need a reset. The US-Guatemala reset should occur under an integrated framework involving Guatemala’s government and formal private sector, working in tandem with the US government.
The time is now. The United States already has various nearshoring/friendshoring laws on the books, sponsored by congressional representatives Mark Green (R-TN, the Nearshoring Act) and María Elvira Salazar (R-FL, the Americas Act). Under both initiatives, the following fact stands out: Guatemala is a friend and near the United States.
Guatemala boasts not only the best country-risk ratings in the region but direct maritime access to all US ports on both coasts as well as the Gulf of America. Guatemala also has a favorable political climate for US FDI, constantly advocated by a strongly US-friendly private sector. In light of the substantial trade complementarities between the United States and Guatemala, US imports from Mexico and Colombia, in particular, can be substituted by Guatemala.
The great challenge to national competitiveness in Guatemala remains its sub-par infrastructure. More infrastructure investment is needed. Guatemala has had some advancements in this area, such as its Priority Infrastructure Law of 2024, and there are reforms to public-private partnerships that are currently on the table. With help from the US government, the legal framework for infrastructure development in Guatemala could become world-class.
More US involvement is needed in this key area. It would be a win-win for the United States and Guatemala if US investment and aid specifically funded infrastructure projects involving roads, ports, and airports.
Greater infrastructure investment by the United States in Guatemala would also combat China’s Belt-and-Road Initiative, which has been displacing US influence worldwide. An even greater hit would be if the US government backed much-needed reforms in public procurement in Guatemala with regards to infrastructure investment.
When offering solutions to countries like Guatemala, the United States should present itself as a role model: a country with tax exemptions for investment and a history of economic growth based on the imperative of industrialization.
In return for prioritizing infrastructure investment and technical assistance to Guatemala, the United States stands to gain:
- less illegal immigration from Guatemala (and elsewhere but passing through);
- a rejection of the Belt-and-Road Initiative;
- private-sector support for US military bases and US control of ports and airports;
- even greater cooperation with security and drug-interdiction;
- supply-chain resilience.
The United States needs to recognize that Guatemala is the best US ally in the region. The Guatemalan government and the formal private sector can now utilize this unique opportunity.
