Tensions between the U.S. and several Latin American governments are escalating, resulting in concerns over regional stability. Notable points of contention include U.S. military strikes against vessels suspected of trafficking narcotics, along with the associated buildup of U.S. forces in the region, the scale of which is unprecedented in recent decades. The military posture assumed by the U.S., combined with assertions by Washington that political figures in the region are complicit in transnational narcotics operations, have fueled concerns the U.S. mission may yet expand beyond targeting maritime smuggling operations.
The potential for the U.S. scaling up their operations to operate inland, and directly against Latin American governments they accuse of being associated with these criminals, has led to fears of a conventional military escalation that would have far reaching consequences for many sectors in the region, including maritime, aviation and energy.
Increasing tensions in the Caribbean have mostly centered on U.S. diplomatic, legal, and military activity focused on Venezuela, though Mexico and Colombia have also found themselves in the U.S.’ crosshairs. Indeed, over the last three months, the U.S. has markedly increased pressure on Venezuela’s government. Notably, in early August 2025, President Trump ordered that military force could be used against certain Latin American criminal groups designated as foreign terrorist organizations. Amongst these is Cartel de Los Soles, whom the Trump administration accused Venezuelan President Nicolas Maduro of leading during his first term. The U.S. Department of State also doubled the bounty on Maduro to $50 million, accusing him of narcoterrorism and cocaine importation, among other crimes.
Shortly following these developments the U.S. dispatched 10 extra vessels, at least 30 more aircraft and nearly 4,500 additional military personnel to the southern Caribbean, representing the most significant U.S. military deployment to the region since the invasion of Panama in 1989.
Further bolstering its presence, the U.S. ordered the aircraft carrier USS Gerald R. Ford and accompanying vessels to the Caribbean in late October, while its long-range B-1 and B-52 heavy bombers have also been reported making flights within 20 miles of the Venezuelan coast.
The extensive nature of the U.S. deployment has fueled speculation that intent goes beyond the stated purpose of a regional counternarcotics and counterterrorism mission, with operations against targets on Venezuelan soil and even regime change in Venezuela being touted as possible objectives. Developments, including Trump calling off diplomatic outreach efforts with Caracas, recent confirmation that he authorized CIA operations, and was looking at land strikes inside the country, have furthered speculation that the U.S. is attempting to dislodge Maduro.
In response to U.S. military activity, Venezuela has acted to mobilize its military, while Maduro has consistently accused the U.S. of pushing for war and regime change. Of note, Venezuela’s armed forces launched three days of military exercises on 18 September, involving the deployment of 2,500 soldiers, 12 warships, 22 aircraft and 20 smaller vessels. Meanwhile, the deployment of air-defense systems and other defensive activities has been noted in Caracas and other coastal areas. Maduro has also issued warnings to its Caribbean neighbors, over supporting the U.S., suggesting they would be legitimate targets in the event of conflict. Following this, the visit of a U.S. warship to Trinidad & Tobago on 26 October, prompted Maduro to order the “immediate suspension” of a deal to provide natural gas to the country.
Although the center of gravity of the U.S. deployment continues to focus on Venezuela, both U.S. military and political power projection have expanded across the region in recent weeks. At the time of writing at least 20 suspected narcotics-smuggling vessels have been struck in international waters, killing at least 76 people, since 2 September. While these strikes initially targeted vessels operating off Venezuela in the Caribbean Sea, on 21 October the U.S. began targeting vessels in the Pacific Ocean, including by attacking a vessel off Colombia.
The targeting of vessels off Colombia has exacerbated U.S.-Colombia tensions that had already worsened as a result of the U.S. accusing Colombia of failing to uphold its anti-drug trafficking commitments in September. Assertions by Colombian President Gustavo Petro that deaths caused by U.S. attacks against vessels in the region were acts of “murder” prompted Trump to label Petro “an illegal drug leader” and to threaten Caracas with aid cuts and tariffs, and sanction Petro.
It is almost certain that the U.S. will continue striking vessels smuggling narcotics in the region, as indicated by the expansion of U.S. targeting into the eastern Pacific Ocean, the introduction of additional significant military assets in the form of the USS Gerald R Ford, building hostile political rhetoric against certain Latin American politicians, and lack of indications from U.S. officials that they will reduce military operations in the region.
Indeed, additional U.S. capabilities brought into the region will allow them to expand operations offshore, and crucially, operate onshore, should they choose to do so. Given this and statements by Trump alluding to operations on land, it is increasingly likely that U.S. activity is more than saber-rattling, and strikes will expand to target narcotics-linked sites, groups, and individuals inland, most likely in Venezuela though possibly elsewhere. Further reinforcing this outlook, it has been reported that U.S. military officials have been requested to sign non-disclosure agreements regarding activities in the region, indicating larger scale operations may be imminent. Military operations against targets in Venezuela would represent a clear escalation that would significantly increase the risk of a direct confrontation between the U.S. and Venezuela, whilst also threatening the stability of the wider region.
The risk to all sectors operating in Venezuela and the wider Latin America region would rise sharply in the event of a direct conflict. This could lead to airspace closures, stricter border controls, curfews, and other restrictive measures. As Washington intensifies its political, military, and economic pressure, companies across the region face growing exposure. Hostile economic measures – such as increased tariffs, export restrictions, and contract cancellations – are increasingly likely. Foreign nationals and organizations may encounter heightened scrutiny and detention risks, should nationalist sentiment intensify. The Maduro regime’s use of hostage diplomacy is a concern, with the UN estimating 120–150 foreign detentions over the past year. Market volatility is expected to rise, threatening investments, while insurance premiums will likely increase in response to the growing uncertainty.
The maritime and aviation sectors are among the most vulnerable during periods of geopolitical tension. While U.S. precision capabilities reduce the risk of accidental strikes on licit operations, maritime companies should remain alert to increased militarization. Vessels may be searched or rerouted due to naval operations, and aircraft contend with airspace closures. The region’s reliance on sea cargo means any disruption could impact supply chains, increasing costs and delays. Escalation may also drive-up insurance premiums and force operators to avoid high-risk zones. An added risk may result from traffickers adapting tactics by increasingly infiltrating legitimate cargo routes, raising risks for ports and personnel, and shifting operations to less affected jurisdictions.
In the event of high-intensity conflict, energy infrastructure sites across the region would become high-value targets. Beyond physical threats, companies face mounting pressure from governments who may be trying to exert pressure on their counterparts. Washington has already imposed economic measures, such as restricting Chevron’s exports from Venezuela. As more states become involved, the risk of retaliatory actions – including contract suspensions and nationalization of assets – will increase.
Organizations should conduct comprehensive risk assessments covering legal, political, economic, and conflict-related threats. Continuous monitoring of developments at all levels – local, regional and international – is essential to anticipate and respond to emerging risks.
Organizations should establish clear risk thresholds that trigger predefined response actions. These should be incorporated into crisis management and emergency response plans that are reviewed and updated to ensure they are robust. Evacuation plans should include multiple contingency routes and be supported by ready resources. To ensure preparedness, regular rehearsals of crisis, evacuation, and continuity plans are critical.
Organizations should enhance physical security infrastructure across all regional sites. Regular communications informing staff of evolving risks and internal support procedures is recommended, while scenario specific training should be provided at sites assessed as facing a high-risk or that are business critical. Companies operating in the region should strengthen executive protection for senior personnel, restricting travel during periods of heightened tension.
Organizations should monitor regulatory changes, sanctions and tariffs. Any existing contracts should be reviewed for force majeure and other protective clauses. Further evaluations of insurance coverage and financial reserves should be conducted, confirming access to emergency funding is adequate. To further reduce the risk posed by a conflict outbreak, redundancy should be built into logistics and reliance on high-risk assets should be decreased.
As tensions between the U.S. and Latin America continue to escalate, businesses operating in the region must remain vigilant and prepared.
For more information on managing these complex regional risks and developing effective mitigation strategies to protect your business, please get in touch.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
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