China Expands Influence in Latin America Amid US Tensions

China has strengthened its presence in Latin America, emerging as a major trading partner for countries such as Brazil, Argentina, and Chile, while simultaneously raising tensions with the United States. 

According to China’s Ministry of Commerce, Chinese direct investment in Latin America reached US$14.7 billion in 2024. Data from UNAM indicates that between 2010 and 2019, investment inflows were nearly seven times higher than in the previous decade, though growth has slowed since the pandemic. As early as 2011, Jin Liqun, then-president of China Investment Corp (CIC), expressed optimism about the region’s economic potential and announced plans to expand investments in countries such as Brazil, Chile, and Colombia.

What once appeared as a search for new markets and profitable opportunities is now seen in Washington as a strategic threat, according to William Jackson, Chief Economist for Emerging Markets, Capital Economics. He suggested that Latin America could become the stage for a modern version of the Monroe Doctrine, this time with China at its center.

Beijing Charts Expansion Across Latin America

This month, Beijing unveiled a new official roadmap for Latin America and the Caribbean, the third since 2008 and a replacement for the 2016 plan. Chinese authorities have identified sectors for potential collaboration, including artificial intelligence, telecommunications, renewable energy, hydrogen, mining, and mineral processing. The plan also prioritizes transportation, logistics, housing, electricity, and urban infrastructure projects under China’s Belt and Road Initiative, which now includes 20 Latin American countries.

This strategic focus comes as Latin America emerges as a crucial alternative market for China’s foreign trade amid its ongoing tariff conflict with the United States. By November 2025, while exports to the United States fell 18%, shipments to Latin American countries increased nearly 8% to approximately US$276 billion.

Over the past two decades, Chinese exports to the region have grown almost elevenfold, driven mainly by manufactured goods and, more recently, electric vehicles in markets such as Brazil. Imports from Latin America to China have increased fourteen times, dominated by iron, copper, soy, and oil. 

However, Capital Economics cautions against overestimating China’s influence. “Latin America exports three times more to the United States than to China. Much of that is due to Mexico, but even excluding Mexico, exports to the United States remain comparable to those sent to China,” Jackson said. He stressed that China does not yet dominate the region. “For Mexico and Central America in particular, the United States remains far more important, and these countries would likely yield to American pressure to limit Chinese investments and imports.”

Mexico Pushes Back on Asian Imports

As China expands its influence across Latin America, Mexico is taking concrete steps to limit imports from countries without active free trade agreements, including China.

This month, Mexico approved a major overhaul of the Law of General Import and Export Taxes (LIGIE), effective January, to strengthen domestic industry, correct trade imbalances, and reduce reliance on foreign goods. Ratified by both chambers of Congress, the reform updates 1,463 tariff lines across 17 strategic sectors, covering products from China, South Korea, India, Vietnam, Thailand, Brazil, Indonesia, Taiwan, Nicaragua, the UAE, and South Africa.

While Mexico frames the tariffs as a tool to boost domestic competitiveness, the decision is also influenced by political pressure from the United States. The Trump administration has repeatedly urged Mexico to impose duties on Chinese imports to avoid US tariffs on Mexican exports and raised concerns over China’s growing presence and alleged transshipment practices.

Guillermo Barba, Chief Economist, Top Money Report, noted that Mexico has limited room to resist US demands, especially as trade tensions rise and sectors such as steel push for stronger protections against Asian producers. The asymmetrical trade relationship with China, where Mexico imports far more than it exports, has intensified calls to shield local industries, making the new tariffs both an economic strategy and a political response to US pressure and broader geopolitical dynamics.