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What J.P. Morgan’s Latest Report Says About Latin America—and How Miami-Dade Businesses and Investors Should Respond (2025 Update)

1) The Macro Picture in Three Lines

• Growth: The house projects slower EM momentum in 2H-2025 versus 1H-2025; in Latin America, 2025 growth edges above 2024 thanks to Argentina’s rebound, while Mexico and Brazil run at more modest speeds.
• Inflation and rates: Inflation is easing, opening the door to gradual rate cuts, with important country differences. That does not eliminate volatility flare-ups if U.S.–LATAM rate differentials shift.
• FX: J.P. Morgan Private Bank LATAM anticipates currency weakness into 2H-2025 and 2026 as differentials compress and growth cools—after two years of appreciation.

2) Country Differences That Move the Needle

• Argentina: The rebound’s statistical carryover lifts the 2025 regional average; potential (re)inclusion in MSCI LATAM would reweight indices (small downshifts for Brazil and Mexico)—relevant for flows and benchmarks.
• Brazil: Consumption remains resilient, but fiscal anchors and high real rates cap investment; the bank has warned that fiscal space is finite.
• Mexico: Exposed to trade and remittances; tariff uncertainty and normalizing remittances may cool demand.
• Andean trio: Chile/Peru/Colombia hinge on copper, mining capex, and confidence; metals pricing and energy/infrastructure pipelines are key.

3) Legal and Contracting Implications for Miami-Dade Companies

A) Pricing and FX: Make Currency Risk Contractual (Not Everyone’s Operational Problem)

• Dual-currency clauses: Quote in USD, permit payment in local currency at a predefined fixing (e.g., WM/Refinitiv) within a time window.
• FX collars: For recurring supply or purchase agreements, set automatic bands that adjust unit prices if FX moves beyond ±X%.
• Netting and setoff: If you both buy from and sell to the same counterparty, agree on netting to reduce gross flows and settlement risk.

B) Terms and Credit: Discipline Without Killing the Deal

• Dynamic early-payment discounts referenced to gently falling local policy rates.
• SBLCs/export credit insurance when selling into slower-growth jurisdictions with tight fiscal space.
• Smart security: UCC-1 on U.S. assets, trust/warehouse receipts where enforceable, and retention of title for fungible goods.

C) Delivery and Force Majeure for 2025

• Logistics buffers in Incoterms for port congestion and weather.
• Climate clauses in agro/commodities with verifiable triggers (specified documentation) to adjust volumes/windows.

D) Data, Privacy, and Technology

• If you sell SaaS/AI into the region, your DPA should cover cross-border transfers, subprocessors, and government access requests; align SLAs to local support/connectivity realities.

E) Anti-Corruption and Sanctions

• Annual re-certification for FCPA/sanctions; document third-party due diligence and tie reps to termination for cause with indemnities.

4) For Founders and Investors: Valuations, Rounds, and Portfolios

• Cost of capital: With disinflation and gradual cuts, discount rates could improve—but don’t expect a straight-line rally. If your Miami startup monetizes in LATAM, be conservative on demand/FX and collections.
• SAFE vs. priced rounds: For LATAM-heavy businesses, investors will price country risk. A priced round with clear governance can reduce perceived risk versus stacked SAFEs—especially if revenue is in local currency.
• Trademarks and IP: File at the USPTO first, then expand to key LATAM markets via the Madrid Protocol; secure IP assignments from staff/contractors and watch OSS licenses.
• Portfolio allocation: Use J.P. Morgan’s Guide to the Markets LATAM to balance hard-currency debt (EMBI/CEMBI) and local markets (GBI-EM) exposure based on your FX and sovereign-risk tolerance.

5) Sectors With Tailwinds (and What to Paper)

• Energy and infrastructure: Near/friend-shoring and the energy transition build project pipelines; contracts should include multilateral flow-downs (anti-corruption, ESG, reporting) and input-cost adjustment mechanics.
• Metals (copper/lithium): Long cycles, permits, easements; lock mining easements, consultations, and environmental studies before major capex.
• Digital services: Fintech/AI upside with robust DPAs, data-localization where applicable, and KYC/AML compliance if you touch payments.

6) Cross-Border Governance That Lowers Friction

• Governing law and forum: For U.S.–LATAM contracts, choose ICC arbitration seated in Miami or a neutral venue; specify law and language, and include forum non conveniens waivers.
• MAC clauses: Define macro events (e.g., tariffs, devaluations >X%) that allow price reopeners or termination without penalty.
• Financial reps: Audited statements, no default, no sanctions; include information covenants quarterly.
• Compliance: A risk matrix and annual training for agents/distributors.

7) For Miami-Based Family Offices

• Private debt vs. equity: With moderate growth and rates drifting lower, fixed income looks tactically attractive; use negative pledge, financial reporting, and hedging thresholds.
• FX policy: Write country limits and minimum collars; avoid pro-cyclical exits.
• Vehicles: Check tax treaties and withholdings; consider corporate blockers for real assets.

8) Practical Checklist for 2025–2026

• Update LATAM templates with dual-currency, FX collars, reinforced force majeure, and price-adjustment terms.
• Re-underwrite counterparties: Annual KYC/credit with audited statements; add notice covenants for material adverse changes.
• Collections: In higher-risk markets, move to SBLCs or documentary collections; where you stay open account, trade credit insurance may be the ticket to play.
• Sequence markets: Prioritize countries with inflation on target, credible cuts, and strong enforceability.
• Sensitivity models: Simulate FX and rates on revenue/COGS; set renegotiation triggers in long-tenor contracts.
• Brand protection: Register trademarks early and require local-language brand protections in distributor agreements.

Conclusions (Legal View)

• J.P. Morgan sees moderate growth with fragile currencies and uneven disinflation. Alpha lives in picking countries and picking clauses.
• Don’t negotiate against the macro: price it, hedge it, and paper it.
• Miami-Dade offers bilingual talent, efficient arbitration, and international banking—build that advantage into your contracts and structures.