In Depth: U.S.-China Rivalry Reshapes Latin America’s Geopolitics

Brazilian President Luiz Inácio Lula da Silva criticized the idea of imposed global taxes without consent, indicating that the world is under no obligation to comply with such measures. Lula warned of increased unpredictability and fragmentation in international relations, emphasizing that Latin America and the Caribbean are among the most affected regions. His remarks followed a significant China-Community of Latin American and Caribbean States (CELAC) Forum in Beijing, where leaders including Chile’s Gabriel Boric and Colombia’s Gustavo Petro joined Lula in supporting China’s push for a multipolar world order [para. 1][para. 2][para. 3].

At the forum, Colombian President Petro announced Colombia’s official participation in China’s Belt and Road Initiative (BRI), highlighting the role of Chinese firms in Colombia’s energy transition, particularly in sectors like electric vehicles and renewable energy. Brazil and China signed 20 bilateral agreements spanning technology, agriculture, and finance. Chile’s President Boric reaffirmed Chile’s commitment to multilateralism, underscoring that 40% of Chile’s exports go to China [para. 4][para. 5].

The burst of Sino-Latin American diplomacy contrasts with U.S.-Latin American relations during the early months of President Donald Trump’s second term, marked by U.S. demands around immigration, narcotics, and countering Beijing’s influence. The U.S. has pressured Latin American nations on concerns like China’s influence in the Panama Canal and the transit of Chinese goods, while trade between China and the region has flourished, reaching $518.47 billion in 2024—a 6% increase from the previous year. China is now the top trading partner for Brazil, Argentina, Chile, Colombia, Peru, and Venezuela, and the second overall for Latin America [para. 6][para. 7]. China holds free trade agreements with Chile, Peru, Costa Rica, Ecuador, and Nicaragua [para. 8].

Despite growing Chinese ties, CELAC member states lack a unified foreign policy, facing divergent pressures from the U.S., which uses trade barriers and sanctions, and from China’s expanding influence [para. 9]. The U.S. has toughened its approach, especially after Colombia joined the BRI, with Washington pledging to oppose development bank financing for BRI projects involving Chinese companies. Colombia responded by seeking membership in the BRICS’ New Development Bank (NDB), pledging $512 million in shares and exploring ambitious infrastructure projects, while asserting its right to neutrality [para. 10][para. 11][para. 12][para. 13][para. 14].

Other Latin American nations face similar dilemmas. Panama ended BRI cooperation under U.S. pressure, refuting claims of Chinese control over the Panama Canal. U.S. foreign policy under Trump has asserted unprecedented influence in the Americas since the end of the Cold War, especially toward Mexico and Panama [para. 15][para. 16].

Mexico, with $109.43 billion in trade with China in 2024, is caught between its top partner, the U.S. (which buys over 80% of its exports), and growing Chinese investment. Mexico’s “Plan México,” announced in 2025, aims to strengthen domestic supply chains, but the country remains dependent on Chinese components [para. 17][para. 18][para. 19][para. 20]. Brazil, less reliant on the U.S., exported $188.18 billion to China in 2024, mainly agricultural products, and benefits from U.S.-China trade instability [para. 21][para. 22]. Argentina, faced with economic difficulty, renewed a $4.9 billion currency swap with China, balancing IMF support and strong Chinese trade ties [para. 23][para. 24][para. 25].

During the China-CELAC forum, China pledged 66 billion yuan in credit and visa-free travel for five Latin American nations, reinforcing Beijing’s pragmatic and non-interference approach. Latin American leaders increasingly value ties with China for diplomatic autonomy, contrasting U.S. engagement focused on control rather than partnership [para. 26][para. 27][para. 28][para. 29][para. 30].