China, Latin America's Best New Ally

Arturo Lombardo

Published 7 July 2025

China has stepped into the spotlight as the new main character in the trade game in Latin America, while the United States and Donald Trump’s threats have taken a back seat in the story.

Latin America has maintained an entrenched and consistent economic relationship with the US, which has served as the foundation of each nation’s economy. The US found a reliable partner in its neighbours to the south, utilizing their relationship to develop each one’s economies. These economic relationships are currently represented by 11 different free trade agreements between the United States and various Latin American countries, such as Mexico, Colombia, Panama, Peru, and seven other nations in the region. The strength of this relationship is reflected in the US being responsible for approximately 31% of the  region’s goods imports and 45% of its goods exports. These numbers illustrate the interdependence between the US and Latin America, where in both exports and imports, the US plays one of the most, if not the most, critical roles within the Latin American economies.

Although countries like Colombia and Venezuela contribute enormously to the US economy, Mexico is the US's largest trade partner in the region. Mexico accounts for 77% of the total imports and 62% of the total exports from Latin America to the US, according to statistics from 2023. This is a result of the USMCA (United States-Mexico-Canada Agreement), a restructured version of what was previously known as NAFTA, ratified during Donald Trump’s first term in 2020. Due to this entrenched relationship, both the US and Latin American countries are extremely vulnerable to changes in one another’s economic conditions or policies.

The start of 2025 witnessed a radical change compared to previous years. Trump’s attacks and threats became a reality, particularly against his biggest trade partners: China, Canada, and Mexico.  He announced a 25% tariff on all goods from Canada and Mexico and a 10% tariff on goods from China. Even though Carlos Slim (Mexico’s wealthiest man) mentioned, “we have already seen that tariffs are just a negotiation,” when Canada and Mexico managed to evade these actions, people remained skeptical. Trump’s latest action was to announce a 25% tariff on all steel and aluminum imports. This move could also be part of Trump’s negotiation strategy, as the US imports more steel than any other country in the world, with Canada, Brazil, and Mexico being its top three suppliers.

Trump’s protectionist measures have weakened the relationship between the US and Latin America, leaving a void that China is utilizing to access the Latin American market. These aggressive policies are pushing Latin American countries closer to China, which has already overtaken the US as the region’s leading trading partner. "The United States is targeting its own allies," stated Carol Wise, a professor of international relations at the University of Southern California (USC) in an interview with The Guardian. "So really, do the math: if you’re going after your friends, your friends will merge with your so-called enemies, right?" she remarked.

A vivid example of this shift occurred in Colombia when, during increasing tensions caused by Trump’s confrontations with Colombian President Gustavo Petro, China’s ambassador to Bogotá took the opportunity to post 38 tweets celebrating the relationship between China and Colombia, including photos and videos of a Lunar New Year celebration in Bogotá. This highlights the cultural exchanges and growing links between the two nations.

China has not only been promoting cultural exchanges and strengthening political ties with Latin America, but it has also invested in the region's economies. For instance, in Peru, the Chancay "megaport," a $3.5 billion facility officially opened in November by Chinese President Xi Jinping, is seen as the most important representation of China's strategy toward the region. Furthermore, due to Trump’s protectionist policies, Brazil has reportedly accelerated the start of operations at the Chancay port, which would reduce shipping delays by 10 days compared to Atlantic routes.

In 2023, bilateral trade between China and Mexico reached $100.2 billion, demonstrating the strength of their economic ties. Despite the obstacles created by

US trade regulations, Mexico's trade relationship with China, its second-largest trading partner, continues to grow. Mexico presents a notable opportunity for China, particularly with its lithium reserves, which could power China’s renewable energy supply chain and expand its electric vehicle (EV) industry. Chinese automakers have also invested in manufacturing plants in Mexico, signalling their interest in escalating economic ties with Latin America and strengthening relationships in the region.

Key players like the United States and China in Latin America are adapting their roles due to the shifting dynamics of global trade. While the US has long been the dominant economic partner for Latin American countries, Donald Trump’s protectionist policies have fractured this relationship, creating opportunities for China to strengthen its participation in the region. Through cultural exchanges, strategic investments and growing trade relationships, China is positioning itself as a reliable and influential partner for Latin America. As the US continues to distance its allies, the door has been left open for China to overtake the US as the region's leading trading partner, reshaping the global trade scenario and redefining partnerships that have withstand for decades.