China will always be a “trustworthy” partner to Latin America, Chinese Foreign Minister Wang Yi said Feb. 18 during a United Nations meeting, according to China’s foreign ministry. Wang’s statement came amid growing pressure from U.S. President Donald Trump on Latin American countries, including Panama, whose ties to China Trump has criticized. What will Trump’s policies mean for Chinese investment and influence in Latin America? How will China seek to increase its influence in Latin America in the coming months and years, and how is Trump likely to react? What relative advantages do the United States and China offer to Latin American countries?
Margaret Myers, managing director of the Institute for America, China and the Future of Global Affairs at the Johns Hopkins School of Advanced International Studies and senior advisor at the Asia & Latin America Program of the Inter-American Dialogue: “China is positioning itself as a viable alternative to U.S. partnerships within the Latin American region. This is not a new strategy. It is something that China has attempted for many years amid shifts in U.S. policy. As the United States has looked increasingly inward in recent years, China has claimed to embrace multilateralism. When climate declines in importance on the U.S. foreign policy agenda, China amplifies its climate-related messaging in Latin America and other regions. In other words, China’s messaging in the region has been shaped, at least in part, by developments in U.S. policy. In practice, China continues to engage with Latin America for largely the same reasons that it has for decades. Resource-seeking and market-seeking activity still account for the vast majority of China’s engagement with the region. Latin American markets have grown in importance to Chinese suppliers of late as other regions place restrictions on Chinese high-tech and other exports. China remains interested in partnership with the region, though with these objectives top of mind. Whether China is judged by Latin Americans to be trustworthy or not, its interests, like those of other nations, are mostly transactional, and Chinese officials are resolute in their pursuit of both economic and political objectives in the region, leaving little room for pushback on issues of political importance to Beijing. With U.S. policy in flux, Latin American nations will increasingly find themselves gauging the relative interests and trustworthiness of both the United States and China, and weighing the relative value of these partnerships.”
Ryan Berg, director of the Americas Program at the Center for Strategic & International Studies: “As under past U.S. presidents, China will present itself as a ‘trustworthy’ and ‘neutral’ partner for Latin America. The Trump administration’s desire to establish red lines for Chinese activity could be a welcome development for many Latin American countries, which are sometimes left confused and guessing about how their relationship with Beijing might affect their relationship with Washington. Naturally, China will portray these efforts as intervention or ‘neo-colonialism’ in order to score political points. There is an emerging narrative that argues the Trump administration’s approach to Latin America will permit China to accrue greater influence by presenting itself as a more reliable partner; however, this is by no means inevitable. As the administration reimagines foreign assistance through reauthorizing the U.S. Development Finance Corporation, examines the potential for a sovereign wealth fund and maintains a laser focus on certain strategic sectors, there could be plenty of opportunities for greater U.S. private sector engagement. Moreover, given China’s own domestic headwinds and economic limitations, Beijing’s influence game could play out predominantly in the information space, as the Belt and Road Initiative (BRI) continues but lacks robust funding levels. Further, many Latin American countries are familiar with the BRI’s most cautionary tales, including a bevy of instances of shoddy construction, environmental damage and labor rights abuses in the region. Already, China has started to taper its regional engagement, leveraging state-owned enterprises as the BRI—to put it in Xi Jinping’s words—morphs to become ‘small and beautiful,’ leaving strategic voids the United States could fill.”
Jorge Heine, research professor at the Pardee School of Global Studies at Boston University and former Chilean ambassador to China:“In his first term, President Trump himself showed scant interest in Latin America, visiting the region only once—for the G20 summit in Buenos Aires in 2018. Yet, his government undertook an offensive to weaken the region’s ties with China, which largely backfired. Between 2017 and 2020, three countries in the region—Panama, El Salvador and the Dominican Republic—broke with Taiwan and established diplomatic relations with China. Many countries signed on to China’s Belt and Road Initiative. Sino-Latin America trade and investment continued to boom (at least until the pandemic hit in 2020), and in 2019, China became the leading country originating foreign direct investment to Chile. In his second term, as Mr. Trump is embracing protectionism, and his policies take direct aim at Latin America, through mass deportations, the threat of 25 percent tariffs on Mexico and of ‘taking back’ the Panama Canal, as well as of possible tariffs on copper—Chile and Peru’s main export product. These policies are likely to backfire as well. China portrays itself as a dependable business partner and a champion of free trade, incapable of such unpredictable behavior. Colombia, traditionally known as the United States’ best friend in Latin America, may soon join BRI, and it has expressed interest in associating itself with the BRICS. Honduras is in the final stages of negotiating a free trade agreement with China. Argentina backtracked from President Milei’s original anti-China stance and now voices its admiration for China. As the United States circles the wagons, the allure of the former Celestial Empire, already South America’s number one trading partner, and a country ready to do business, will grow stronger, not weaker.”
Gary Clyde Hufbauer, senior fellow at the Peterson Institute for International Economics:“Latin America has become a happy hunting ground for Chinese interests. Both Chinese and U.S. policies are responsible. Through the Belt and Road Initiative and the Asian Infrastructure Investment Bank, China lends large sums for Latin American infrastructure. As the world’s largest trading partner, China offers a huge market with low tariffs for Latin American exports. China does not publicly complain about Latin American import barriers. By contrast, U.S. policies have a hostile edge. Washington threatens high tariffs, either because Latin America exports ‘strategic’ goods to the U.S. market, or because Latin American tariffs on select U.S. exports are high, or simply to create U.S. negotiating leverage over individual grievances. The United States deports thousands of Latin American immigrants to their home countries, even people who have lived peaceful and productive lives in the United States for decades. U.S. aid programs have been halted, and the United States offers little public financing for large infrastructure projects. Finally, the United States is demanding that Panama return its canal to U.S. control. It remains to be seen whether these contrasting facts on the ground will ripen into strong Latin American alliances with China. Probably the best Washington can hope is that most Latin American countries will seek a balance between Chinese and U.S. interests”
Victoria Chonn Ching, nonresident fellow at the Atlantic Council:“To assume that China will stop investing or trading with Latin American countries given recent U.S. pressures is to mischaracterize complex economic and financial cross-Pacific and global dynamics. One question, however, is what kind of deals and mechanisms China may use to negotiate with its Latin American counterparts as they are pushed to choose between the United States and China. Some Latin American leaders may and will signal the prioritization of their countries’ relationship with the United States, as shown during U.S. Secretary of State Marco Rubio’s first international visits to Panama and Costa Rica. Other Latin American leaders have been more outspoken in asserting their states’ sovereignty and how they are engaging with different key partners. That is, while the renewed U.S. interest in Latin America is welcome, there is also wariness. Moreover, there is also variation in the areas in which Latin American countries engage more with China such that lessening interactions may represent a manageable loss. This means that, as the United States re-engages with the region, China may pay more attention to how it presents itself as a reliable and stable partner, which is also something Latin American countries are seeking as they balance the pursuit of their own interests with finding opportunities in the context of U.S.-China competition.”
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