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Latin America’s Relation to the US-China Trade War Photo courtesy of LWYang on Flickr

Latin America’s Relation to the US-China Trade War

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China continues to expand its reach into Latin America, as proven with the recent creation of a space mission control station in Argentina. More importantly, China has increased its trade with the region—highlighting the need for the US to do the same in light of the recent US-China trade war. The US should work to foster better trade relations with Latin American countries in order to fortify a strong relationship with its southern neighbors, especially as China increases its Latin American presence.

China expanding its presence in Latin America poses several threats to US national security. Economically, it could hurt relations between Latin America and the US. Additionally, several Latin American governments have aligned themselves with Chinese values since the Chinese presence is strong in the region—a practice that raises concern for US-Latin American relations.

The breadth of the Chinese presence is revealed as R. Evan Ellis, a Latin American studies professor, states that “Beijing has transformed the dynamics of the region, from the agendas of its leaders and businessmen to the structure of its economies, the content of its politics and even its security dynamics.” This regional transformation should spark an increase of trade in the region, but the Trump administration has acted in ways that hinder the Latin American trade partnerships the US holds.

To demonstrate, the Trump administration has rolled back several trade partnerships and imposed tariffs—many of which are hurting the US economy and its international trade relationships. President Trump has taken the US out of the Trans-Pacific Partnership (which connected the Americas with Australasia), halted negotiations of the Transatlantic Trade and Investment Partnership (TTIP) with the EU, and has repeatedly threatened to end NAFTA. In the meantime, other international competitors have increased their global trade advancement—leaving the US behind. Due to its past actions, China is more than likely to continue this development.

In 2008, at the height of the global financial crisis, China published a policy paper that pushed for the strengthening of China-Latin America relations. The Latin American countries were receptive, and exported large amounts of oil, iron, soybeans, and copper to China—greatly helping the region in economically turbulent times. Since then, the China-Latin America relationship has only grown. For instance, statistically, “since 2015, China has been South America’s top trading partner, eclipsing the United States.” This statement is further exemplified as Brazil’s exports to China are valued at $35.9 billion per year, while its exports to the US equal $30.5 billion per year.

Furthermore, the Pacific Alliance, the trading bloc comprised of Mexico, Peru, Chile, and Colombia, has started talks to expand its trade with Asia since the futures of NAFTA and other trade partnerships are shaky after President Trump’s withdrawal from TTP and statements about NAFTA. Additionally, the growing US-China trade war may encourage China-Latin America trade to increase since products may not be able flow as freely from China to the US amidst tariffs. Duane Layton, head of Mayer Brown’s international trade law practice, notes that “there may be a diversion of products… if they can’t get into the United States, maybe they go into Mexico or other Latin American markets.”

For most of the last decade the US has done little to enhance trade growth within Latin America. The Obama administration largely focused on trade with Asian countries, hoping to secure the US’ position as a strong international economic force in the Pacific while China grew as a competitor. Increasing and supporting relations with Latin America is a way to ensure America’s economic strength in its own back yard. To do so, the US should promote free trade and economically advantageous relationships with Latin America. It is critical for US economic and national security to be well-connected to its southern neighbors considering that relations with China are turbulent amidst the current trade war.

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