China Sees Opportunity as Trade War Hits Latin America (AI Translation)

【周刊提前读】贸易战中的拉美各国现状如何？ 为何中国视其为机遇？

Brazilian President Luiz Inácio Lula da Silva criticized what he views as the imposition of unilateral economic measures—taxes and controls—by some nations without global consent, reflecting broader concerns among Latin American leaders about rising instability and geopolitical fragmentation. These pressures have hit Latin America and the Caribbean especially hard in recent months [para. 1-2]. At the Fourth Ministerial Meeting of the China–CELAC Forum in Beijing, which brings together China and 33 Latin American and Caribbean countries, leaders including Lula, Chile’s Gabriel Boric, and Colombia’s Gustavo Petro underscored China’s growing importance as a trade and diplomatic partner and their interest in a multipolar world. Notably, Colombia formally joined China’s Belt and Road Initiative (BRI), aiming to leverage Chinese investment in its energy transition [para. 3-4].

Multiple cooperation agreements were signed between China and Brazil (20 agreements), and China and CELAC countries agreed on a roadmap of over 100 projects through 2027, reflecting deepening ties. Chile, which sends 40% of its exports to China, reaffirmed its support for multilateral cooperation [para. 5]. Amid these developments, U.S.–Latin America relations are cooling, with an expected Trump administration forecast to focus policy on immigration control, drug crime, and containing Chinese influence, sometimes employing tariffs and strategic pressure. The U.S. has raised concerns over China's perceived involvement in the Panama Canal and other economic activities, pressuring countries to pick sides [para. 6-7].

China-Latin America trade exceeded $518 billion in 2024—a six percent rise year-on-year and a fortyfold increase since 2000. China has also signed free trade agreements with Chile, Peru, Costa Rica, Ecuador, and Nicaragua [para. 8]. Unlike the EU’s unified strategy, Latin American nations act individually, lacking collective resistance to either U.S. or Chinese pressure. The U.S. has signaled opposition to multilateral loans financing Chinese BRI projects, especially in Colombia, and remains wary of initiatives involving the New Development Bank (NDB) of BRICS, seen as a tool to enhance regional autonomy [para. 11-16].

Within Latin America, responses vary: Mexico, deeply integrated with the U.S. economy and supply chains, is balancing strong trade ties with both the U.S. and China. Despite U.S. tariffs and political pressure, Mexico’s reliance on Chinese components for exports and manufacturing remains high. In 2024, bilateral trade with China reached $109.43 billion—up 9.23%—with China’s exports to Mexico dwarfing imports [para. 37-40]. U.S. policy under Trump features broad tariffs (25% on many Mexican exports), exacerbating Mexico’s economic challenges: a fiscal deficit of 5.9% of GDP and anemic GDP growth prospects [para. 43-50]. Nonetheless, Mexican leaders are attempting to maintain a pragmatic, dual-track approach, seeking to diversify trade while remaining cautious toward China [para. 59-60].

Brazil appears as a potential beneficiary of U.S. tariffs on Mexico. China is Brazil’s biggest trading partner; bilateral trade in 2024 reached $188.2 billion, with China also heavily investing in Brazilian infrastructure and agriculture [para. 73-80]. Brazil’s agricultural exports to China continue to soar—China imported 74.65 million tons of soybeans from Brazil in 2024 (over 70% of Chinese soybean imports) [para. 88]. However, Brazilian leaders are mindful of the volatility in global trade and wary of overdependence on a single market [para. 91-100].

Argentina, under President Javier Milei—a pro-U.S. leader known for “shock therapy” austerity—has tilted strongly toward Washington, even withdrawing from BRICS. Yet, economic realities force Argentina to maintain financial links with China: its $5 billion bilateral swap line with China is crucial for its foreign reserves [para. 113-126]. While Argentina’s economy is set to contract 1.7% in 2024, pressure from both the U.S. (especially for IMF support) and China remains high; over half of Argentina’s beef and about 70% of its lithium exports go to China [para. 131].

Across the region, countries struggle to chart their own course between Chinese investment and U.S. political and economic pressure. While the U.S. focuses on security and migration, China advances credit, trade, and multilateral engagement [para. 164-173]. Analysts agree Latin America’s best strategy may be pragmatic non-alignment, seeking maximum economic advantage from both sides without being drawn fully into either camp [para. 184-194].