Costa Rica

Current status

Costa Rica faces heightened political instability following a presidential transition and escalating diplomatic tensions over the past 30 days. The risk environment has deteriorated significantly with 5 events including 1 critical military threat and 4 high-severity diplomatic incidents concentrated around early May. Political upheaval coinciding with leadership changes has created an uncertain operating environment for international businesses.

Supply chain impact

• Medical device manufacturers face potential disruption to Costa Rica's $4+ billion medical equipment export hub, which serves as a key manufacturing base for global pharmaceutical and device companies targeting Latin American markets.
• Fresh produce supply chains for bananas and pineapples to North American and European markets could experience delays or quality issues if diplomatic tensions affect port operations or trade agreements.
• Tourism-dependent logistics networks including hotel supplies, food service, and transportation may see reduced demand affecting regional freight volumes.
• U.S. companies with Costa Rican operations may face visa restrictions and diplomatic complications affecting personnel movement and business continuity planning.
• Regional Central American trade corridors could experience rerouting pressures if Costa Rica's traditional stable role as a logistics hub becomes compromised.

Watch points

• Monitor implementation timeline and scope of U.S. tourist visa cancellations, which could signal broader trade relationship deterioration affecting commercial operations.
• Track military developments and any escalation of the "conventional military force" threat, particularly around strategic infrastructure like ports and airports.
• Watch for changes in Costa Rica's trade policies or diplomatic relationships with other major partners (EU, China) as the new administration under Laura Fernandez establishes its foreign policy direction.