Xi Jinping, the president of China, was present at a meeting marking the beginning of a “diplomatic battle” through Latin America at the time of Donald Trump’s victory in November 2024.
Xi’s appearance was a symbol of China’s rising influence in the region. The Chinese-funded ($ 3.4 billion ) Chancay port represents an expansion of the relationship between China and Peru. Additionally, the two nations signed a treaty expanding free business. Xi said this was the beginning of a coastal version of China’s Belt and Road Initiative, to grow its international trade and control.
Peru was one of the first Trump administration’s countries to adopt a confrontational attitude against several other nations in the area. In the end, this led Peru to reaffirm its relationship with China. Beijing saw the chance, through positive business deals and investments, to place itself as a more reliable and useful companion than Washington.
China has significantly increased its position as Latin America’s leading trading partner in the past 20 years. In 2002, trade between China and the region was worth$ 18 billion. hat amount increased to$ 500 billion by 2023. In the first two weeks of 2024, China’s exports to Latin America increased by 20.6 %.
Trump’s second term was widely believed to be a move toward China as Latin American nations turned away from US principles and alliances. Brazil, for instance, saw deal with the US fall to its lowest level for 11 times, while commerce with China grew considerably. Joe Biden did much to improve relationships.
Trump’s campaign speech suggests that the approaching management will continue to do so. And if and when options arise, China is undoubtedly ready to expand its collaborations in the area.
The Trump presidency is likely to concentrate on business, emigration, and drug trafficking. For instance, Mexico is more likely to become a scheme objective, because of improper immigration, than Brazil.
Trump might look for local friends whose plans seem more in line with his own. Argentina’s leader Javier Milei and El Salvador’s Nayib Bukele seem good candidates, with their kind of democracy echoing some of Trump’s.
Despite attempts by Brazil’s leader Jair Bolsanaro to work with Trump when they were both in authority, and to sound Trump’s buzzwords, trade between the two countries fell. Significantly, during Trump’s term of office three countries – the Dominican Republic, El Salvador and Panama – withdrew recognition of Taiwan as a sovereign nation, officially shifting allegiance to Beijing and apart from US-backed Taipei.
What future?
In 2025, countries with nearby ties with China may be targets for the Trump administration. Trump has threatened to impose tariffs on Chinese goods, and he has outlined his strict China plans as part of his” America second” plan. China might interpret the Chancay dock as a way to avoid rising US tariffs and as a backdoor to the US marketplace. So Peru may be a trade-relations fight.
However, Trump’s America First plan, prioritizing US interests, could even result in the reduction of local aid.
Reduced US assistance might prompt Latin American nations to find yet stronger ties with China. Over the past ten years, the latter has previously been constantly offering economic investments and funding infrastructure projects through Belt and Road Initiative programs. Argentina has also served as a Foreign space station’s base.
Belt-and-Road-related initiatives are frequently viewed as more appealing than assistance and investments from eastern nations, including the US, because they have lower costs for the nation receiving the investment.
Trump’s possible disengagement from international organizations, quite as NATO and the World Bank, may also improve China’s influence internationally. Latin American nations would have fewer reasons to support Washington because of this US place, which may lessen its ability to influence foreign norms and policies.
Latin American nations could switch to China for increased funding, which frequently relies on international organizations for economic and political support like the Inter-American Development Bank. China’s diplomatic work, including high-level appointments and involvement in local forums, continue to rise, signalling its intention to improve ties with Latin America.
Latin American nations will likely continue to find powerful economic ties with China, especially for those who have experienced financial instability in the post-pandemic time and are looking for innovative avenues of growth and development.
Interestingly, China’s investments in the country’s facilities and energy sectors have already been considerable in the last century. They have provided much-needed funds and tech exchanges. These opportunities have not only strengthened regional economies but also strengthened political ties, making China a crucial partner in the development of the region.
China v US
Another benefit of China’s overseas scheme is its non-interventionist policy, which may appeal to Latin American nations. This approach emphasizes the independence and the freedom of nations to choose their own growth lines.
China presents itself as an alternative to the standard western power. This enables China to present itself as a brother emerging sector, which suggests a sense of cohesion with Latin American nations. This contrasts with the US’s complicated story of interfering with the regional economy ‘ domestic politics.
Countries in Latin America may discover China’s technique more compatible with their own guidelines as Trump continues to illustrate a more isolationist and mercantilist approach.
Many Latin American nations are expecting something related this time due to the hostile rhetoric used against them during the first Trump term, mainly over immigration. China appears poised to create even more of those options.
The International Institute for Management Development ( IMD)’s ( IMD) World Competitiveness Center’s ) Jose Caballero is a senior economist.
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