Amidst rising trade tensions with the US, China is deepening its economic and strategic integration into Latin America through global initiatives and market diversification, prompting the United States to counter with a renewed national security strategy.
President Trump’s visit to Beijing for talks with Chinese leader Xi Jinping is driving global conversations. It is the first US presidential trip to China in nine years, and comes amidst US-China trade tensions and the US-Iran conflict.
In this context, it is worth examining China’s strategy and economic influence in Latin America and the implications for US national security. In December 2025, the United States and China both released reports outlining their respective goals and strategies for engaging with Latin American countries. Both documents reveal how each country frames its future interactions with the Western Hemisphere.
While China developed diplomatic relationships with Latin American countries since the 1970s, it first articulated a framework for its political and economic strategy towards this region in 2008. There were also two follow-up papers on China’s policy approach towards Latin America and the Caribbean in 2016 and 2025. China’s 2008 Policy Paper on Latin America and the Caribbean describes a framework for promoting mutual respect and cooperation based on the Five Principles of Peaceful Coexistence formulated by China and India in 1953 to guide international relations and diplomatic interactions.
Xi Jinping visited Latin America for the first time in 2013, touching down in Trinidad and Tobago, Costa Rica, and Mexico. Following the launch of the Belt and Road Initiative later that year, he returned to the region in 2014 to announce the creation of the China-CELAC Forum in Brazil. The first ministerial meeting of China-CELAC took place in China in 2015. China revised its policy paper in 2016 in the context of these interactions and new developments in the global economy, specifying additional actions and activities within the 2008 framework.
While the most recent policy paper released in 2025 maintains a similar framework, it embeds Latin America within China’s four global initiatives: Development, Security, Civilization, and Governance. These initiatives take the form of five programs: Solidarity, Development, Civilization, Peace, and People-to-People connectivity. Of special interest is the development program, which is framed in the context of the UN 2030 agenda, and specifies cooperation in trade, investment, finance, infrastructure, manufacturing, science and technology, aerospace, maritime, and environment, among others. The peace program emphasizes cooperation across several areas, including military exchanges, law enforcement, and anti-corruption efforts. What is new in the 2025 policy document is the architecture around the initial framework, embedding Latin America in China’s broader framework for global order.
While the US has a long history of economic exchange with Latin American countries, China’s trade growth in the last two decades is astonishing (Figure 1).
Between 2004 and 2025, exports of goods from Latin America and the Caribbean (LAC) to China grew by roughly 12-fold (from $21 billion to $249 billion). Chinese exports to the region grew even faster, roughly 17-fold. Interestingly, China has been a net exporter to the region consistently since 2021.
In the current context of Trump’s tariffs on Chinese goods, while exports of goods from China to the US decreased by 20-percent between 2024 and 2025, China’s exports of goods to LAC grew by 7-percent. In fact, there is evidence of Chinese trade diversion from the US to other countries due to US tariffs between 2017 and 2022. While it is difficult to quantify how much trade diversion of Chinese goods from the US market to LAC markets is the result of current US tariffs, one could argue that there is a possibility to understand the impact of US trade policy in the context of the "balloon effect.” In the context of Latin America, the “balloon effect” relates to imposing pressure to fight the production of illicit drugs in one country that results in increasing the production of illicit drugs in a neighboring country. Thus, one could hypothesize that current US tariffs might push China to diversify its markets and increase its market share in Latin America.
Chinese economic interactions with Latin American countries are concentrated among four countries: Brazil, Mexico, Chile, and Peru. Between 2021 and 2025 trade (exports plus imports of goods) with China totaled $892 billion for Brazil, $501 for billion for Mexico, $322 for Chile, and $206 billion for Peru
Similar to trade, Chinese Foreign Direct Investment (FDI) in Latin America is growing and is also concentrated among these four countries. Between 2015 and 2021, Brazil received 35-percent of Chinese FDI, followed by Chile (19-percent), Mexico (16-percent) and Peru (15-percent). Chinese cumulative FDI in Brazil reached $77 billion between 2003 and 2025, making Brazil the top destination for Chinese investment in the region. Looking at FDI by sector recorded for 13 Latin American countries, between 2007 and 2022, 48-percent and 21-percent of Chinese FDI was in the energy and infrastructure sectors, respectively. Chinese investments in critical minerals, ports, and aerospace have raised concerns for US national security in the Western Hemisphere.
The US recognizes the Western Hemisphere as a top priority in its 2025 National Security Strategy (NSS) and acknowledges current Chinese economic and political influence in Latin America as a strategic challenge. This document, recognizing “the great American strategic mistake” of allowing non-Hemispheric competitors to grow their influence in the region, announced the “Trump Corollary” to the Monroe Doctrine to restore American security interests.
This strategy is summarized in two objectives: “Enlist” and “Expand.” The US will enlist regional partners to cooperate on migration, security, and commercial diplomacy, and to strengthen critical supply chains. The US will expand its partner network while working to reduce “adversarial outside influence” at military installations, ports, and key infrastructure. Following this strategy, we should expect to see more US engagement with key player countries in the region.
The Chinese strategy in Latin America follows a similar approach of deeper regional engagement and cooperation. Both countries have formalized their interest in the Western Hemisphere – the US through the 2025 NSS and China through its 2025 policy paper.
This convergence of interest may give Latin American countries more leverage in their relationships with both powers. As I have argued previously, the strongest US strategy for ensuring a prosperous and secure Western Hemisphere will focus on trade partnerships, energy cooperation, and regional supply chain integration – tools used as carrots rather than sticks.
The author thanks Isabella Elias, MPP candidate at Pepperdine School of Public Policy, for research assistance.
