In June, dozens of ships encountered lengthy queues arriving at Puerto Quetzal on Guatemala’s Pacific coast. Limited infrastructure means that ships must wait weeks to dock. President Bernardo Arévalo sought to address these problems since the start of his presidency in 2024, when he went beyond the usual cooperation with the United States and requested that the U.S. Army Corps of Engineers (USACE) evaluate the port’s modernization project. These efforts, which started under the administration of Joe Biden, gained momentum under Donald Trump, who embraced the port construction plans estimated to cost over $700 million. As a result, Puerto Quetzal has become the only port in Central America to rely on the U.S. military to modernize its infrastructure.
In January 2025, when Trump took office, many in Guatemala speculated about how the relationship between him and Arévalo, a social democrat from a small Central American country, would play out. The effects of the Trump administration’s emboldened national security agenda in Latin America were soon felt in Guatemala as the country’s military officials became the primary interlocutors with Washington, displacing the conventional suit-and-tie diplomats.
The USACE’s involvement in the port demonstrates the United States’ renewed military interest in maintaining a presence in the region. Within a year, the Guatemalan government awarded the USACE a series of multimillion-dollar contracts; in return, the United States lifted its arms embargo on Guatemala—in place since 1977. The new infrastructure contracts plus recent arms purchases by the Guatemalan government have now cemented Washington’s influence in the country for the coming decade.
The USACE Contracts
Early reports of conversations between port authorities and the USACE date back to September 2024, during the administration of President Joe Biden. In the wake of Trump’s election, these discussions evolved from preliminary talks into a concrete project. Guatemala was part of Secretary of State Marco Rubio’s first international tour in February 2025. Three months later, the U.S. Embassy in the country announced the formalization of feasibility and design studies for Puerto Quetzal with the USACE.
The Letters of Offer and Acceptance (LOA) submitted by the Guatemalan Ministry of Defense show the extent of the projects. The LOA signed in May 2025, is worth $63 million and covers the design and feasibility studies for the expansion of Puerto Quetzal, with a 32-month timeline; an addendum to that agreement, worth $10 million, supports the same studies for a rail network and logistics hub.
Because of this deal, U.S. military engineers will be involved in construction projects on the narrow avenues of Guatemala City and other cities.
An additional six road projects were also agreed on in an LOA from January 2026, a deal worth $100 million that is set to be completed in six months. Because of this deal, U.S. military engineers will be involved in construction projects on the narrow avenues of Guatemala City and other cities. Guatemalan Defense Minister, Henry Sáenz, argued that the projects had to be awarded to the USACE due to a lack of resources in the country, though there are plenty of existing Guatemalan military engineers.
“We are a smaller army following the signing of the peace agreement [in 1996]. We went beyond the mandated reduction numbers, and as a result, our technical capabilities and equipment are limited. Given this reality, it was unthinkable that we could carry out a project of that magnitude within a normal time frame,” said Sáenz.
While the total cost of the projects has not yet been officially announced, estimates put it in the range of $600 million, according to information from the U.S. Department of Commerce. Regardless of the exact cost, it is clear that these projects will be entrusted to the USACE and that Guatemala will need to borrow money to cover the costs.
“It’s a unique situation, because it’s always been the other way around,” said Renzo Rosal, a political scientist and professor at Rafael Landívar University in Guatemala. “The United States usually gives us money, [but now] we’re paying the U.S. government,” he said.
Infrastructure and Military Spending
According to Defense Minister Sáenz, the country is now the fifth-largest military investor in the U.S. military-complex of all Latin American countries. However, these statements by the minister could not be verified as there is no index that aggregates infrastructure and arms spending. U.S. sales of arms and equipment to Guatemala hover around $31 million, according to numbers from the U.S. Census Bureau reported by the Center for International Policy.
Guatemala’s rearmament comes after the Trump administration lifted an arms embargo on Guatemala that had been in place for 47 years. It was initially established by the administration of Jimmy Carter to prevent U.S. weapons from being used in human rights violations by the country’s security forces. Throughout this period, arms sales to Guatemala have been intermittent. President Ronald Reagan authorized the sale of specific weapons and helicopter parts 1983, but suspensions returned in the 1990s. In some cases, arms sales, and funding have made their way to Guatemala clandestinely. At the time of the announcement, Sáenz noted that the Army had previously acquired weapons from Colombia and Israel.
Guatemala’s rearmament comes after the Trump administration lifted an arms embargo on Guatemala that had been in place for 47 years.
In August, the country received its first shipment of M4 assault rifles. Over the remainder of this year and into 2027, it will also receive a package consisting of two “Island”-class patrol boats for intercepting drug traffickers at sea, two Twin Otter aircraft for intercepting drug traffickers using paratroopers, and three Thrush 710 aircraft for firefighting.
These purchases drove up defense spending, but what ultimately cemented Guatemala’s commitment to military spending was its decision to entrust the modernizing of its infrastructure to the USACE, classifying them as national security projects. “These national projects that were added will be managed by the U.S. Army Corps of Engineers and are therefore counted as defense spending, even though we hadn’t had them on our radar as defense-releated. That adds to our total and moves us up to fifth place in defense investment for the United States,” said Saenz.
U.S. Locks in its Regional Influence
According to analyst Roberto Wagner, it is clear that securing areas that might be of interest to China is one of the main reasons the USACE accepted these contracts.
In the first two decades of this century, China accelerated its infrastructure investments in Latin America. In Central America, the presence of several Chinese companies in ports around the Panama Canal has caused tension in the region due to complaints from the United States. In the case of Guatemala, connecting the two oceans is a geostrategic advantage.
“It is precisely that route from the Atlantic to the Pacific and vice versa that serves as an alternative to the Panama Canal,” said Wagner, referring to the importance of a land corridor as a commercial alternative.
Today, Guatemala has no diplomatic relations with China and is one of 12 countries that recognizes Taiwan. This is largely symbolic, however; it imports 18 times more goods from China than from Taiwan in terms of value, according to data from 2023.
When asked whether considering other countries as potential contractors for the project was even an option, Minister Sáenz did not provide much detail: “I negotiated with the United States because that was the instruction I received.”
Sáenz also noted that these contracts were considered by the current administration to be the best way to shield itself from the corruption that prevails in ports and infrastructure projects. The government reasons that since the USACE is not a company but a corps of military engineers, entrusting the project to them will reduce the risk of corruption. At the same time, another goal of the agreement is to shield the port from illegal drug trafficking, a key focus of the Trump administration, said the Defense Minister. He confirmed that, following the modernization, he expects fewer drug seizures, based on the logic that they will decrease because the port will be more secure.
LOAs That Provide Internal Governance
On July 1, President Bernardo Arévalo appeared at the “Guatemala se Transforma” (Guatemala is Transforming) forum, organized by the Guatemalan Chamber of Commerce—a private-sector event focused on infrastructure and connectivity. Before an audience of business leaders, he spoke about the expansion of Puerto Quetzal and the construction of rail lines in the country. The projects were applauded by business leaders, a group that has been skeptical of his administration.
“They’re presenting these projects as if they were this administration’s infrastructure legacy,” said Wagner, the analyst.
Prior to signing these agreements, the Arévalo administration’s track record on infrastructure projects was lackluster.
Prior to signing these agreements, the Arévalo administration’s track record on infrastructure projects was lackluster. The deals with the USACE have thus provided him a means to silence his critics in a country where politics revolves around a conservative axis. “[The government will] say, ‘If you’re against all of that, then you’re not interested in the ports, you’re not interested in the country’s development, you’re not interested in the country’s competitiveness,’” said Rosal.
The commitments regarding the port and the rail projects also provide certainty for the private sector. The Minister of Defense asserts that the studies and the contract awarded to the USACE for the port project secure its future, even if the next administration were to decide to discard the project, as it is a state-level agreement.
The Militarization of Diplomacy
The United States has not appointed an ambassador to Guatemala for seven months. For Rosal, the lack of urgency in appointing a new ambassador is serious, as it suggests that no negotiation is needed to advance U.S. interests.
The military’s prominence in the international agenda has become hard to deny, as the case of the Shield of the Americas Summit—held in March in Miami—demonstrated to a tee. Although President Arévalo was not present, Guatemalan Defense Minister Henry Sáenz represented the country alongside his counterparts from the U.S. Southern Command. “The Ministry of Defense is playing a larger role than the Ministry of Foreign Affairs,” said Wagner, a Guatemalan international relations expert who specializes in geopolitics.
Military ties, arms purchases, and multimillion-dollar contracts have also not prevented the United States from interfering in Guatemala’s internal affairs. In March, The New York Times revealed an alleged agreement between Guatemala and the United States to conduct joint counternarcotics operations. A source in the Arévalo administration told El País that the U.S. wanted to turn the operations into a televised spectacle.
Military ties, arms purchases, and multimillion-dollar contracts have also not prevented the United States from interfering in Guatemala’s internal affairs.
Despite the Guatemalan government’s categorical denial that such operations are going to take place, Secretary of Defense Pete Hegseth has continued to push for Guatemala’s involvement in its “anti-narcotics” campaign. In the interview, Sáenz clarified that U.S. military personnel are present in Guatemala—including aircraft mechanics, personnel providing cybersecurity training, and contingents training Guatemalan special forces—but that the only ones “conducting military operations on national territory are the Guatemalan Army.”
The intervention has also taken place at the political level. In March, just as Congress was preparing to elect justices to the country’s highest court, John Barrett—the chargé d’affaires at the U.S. Embassy—called Guatemalan lawmakers to express his support for Justice Roberto Molina Barreto. Although Arévalo requested clarification from the State Department, he received no response. For his part, Barrett publicly stated that they would respect election processes.
“It made the president look very bad,” Wagner said of the incident. In this context, the analysts consulted also do not rule out the possibility that, despite Guatemala’s concessions on infrastructure projects, Trump might speak out in support of a particular candidate in the 2027 presidential election.
“Is he going to back someone like Nasry Asfura here too, just as he did in Honduras? I don’t know. But right now there are several here who are raising both hands—and if they had three, they’d raise all three—saying, ‘I want to be the one [backed by Trump],’” said Rosal.
Juan Luis García has been a reporter in Guatemala and Mexico covering issues related to militarization, politics, and migration. He has been a fellow in the United Nations’ Reham Al Farra program, the Alfred Friendly Foundation (Missouri), and the Kiplinger Fellowship (Ohio).