It definitely looks Latin American, but not like any poncho I recall seeing. I could call it a vest, but fancy caballero vests look much more European dress style, while this item looks more native working class. What tradition is it? Felted alpaca wool? (nvm, looks woven)
Talk:El Caballero
Literally, caballero means horseman (from caballa), and because horsemen were associated with the mounted military class, or Equites, knight, lower nobility, that is, gentry, gentleman. In Spanish, caballero can mean cowboy, vaquero, gaucho (Argentina), charro (Mexico), or huaso (Chile). In literature, particularly, the term came to refer to horsemen of the US southwest (Badlands) and Mexico whether US or Mexican citizen. As such, the term came to also mean, colloquially, southwestern or "Mexican cowboy".
Of course it is speculation to pick which meaning Valve meant when they changed the submitted name from the original El Texano (Texan).
Six-Gun Caballero by L. Ron (sure, let's make up another word, why not?) Hubbard -- the title character is a Mexican-Irish rancher in the Badlands.