Introduction

Although Latin America has long been a strategic region for the United States, with significant Chinese investment and collaboration in the last two decades, Beijing has become a key economic and strategic partner for a number of countries in the region. As a result, China’s strategic influence in the region has increased, calling for greater U.S. involvement in Latin America. 

During the Fourth Ministerial Meeting of the China-Community of Latin American and Caribbean States (China-CELAC) Forum on 13 May, 2025 in Beijing, China extended a credit line of nearly $10 billion, under the Global Development Initiative, to Latin American and Caribbean nations. In what appeared to be a reference to the U.S. President Donald Trump’s recent trade activities, President Xi told the forum that "bullying and hegemony will only lead to self-isolation." 

The future of foreign influence in the region grows increasingly uncertain, especially with the recent enforcement of President Trump’s counter cartel mission. Many Latin governments are exploring alternatives for economic growth while the U.S. faces increased competition, particularly from China, for global leadership and regional influence.

The Belt and Road Initiative & Growing Trade Ties

The Belt and Road Initiative (BRI) also referred to as the “New Silk Road” was launched in 2013 by Chinese President Xi Jinping. Despite originally being planned to link East Asia and Europe, the initiative rapidly expanded around the world, with over 150 participating countries, helping China expand its global economic and political influence. 

On 14 May 2025, Colombia formally agreed to the Chinese “Belt and Road Initiative”, joining more than twenty other countries to have signed onto the project in Latin America and the Caribbean. Colombia’s Foreign Ministry called the agreement a “historic step that opens up new opportunities for investment, technological cooperation and sustainable development for both countries.” Moreover, as China surpassed the US as the biggest trading partner of Brazil, Peru, Chile among others, in early 2025, Chinese trade ties with Latin America continue to grow stronger than they have ever been.

In response to the announcement amongst recent Chinese advancements, the Bureau of Western Hemisphere Affairs issued a public statement on X (formerly Twitter), saying “The U.S. will strongly oppose recent projects and upcoming disbursements by the [Inter-American Development Bank] and other [International Financial Institutions] for Chinese state-owned and controlled companies in Colombia (and other BRI countries in the region).” The Bureau claimed that the projects “endanger the region’s safety and security” and emphasized that “American tax dollars SHOULD NOT be used in any way [...] to subsidize Chinese companies in our hemisphere.”

In 2024, trade between China and Latin America exceeded $518 billion in 2024. As reported by the World Economic Forum (WEF), some economists project the value exceeding $700 billion in around ten years’ time. Alongside heavy Latin involvement in the BRI, Beijing has free trade agreements with Chile, Costa Rice, Ecuador, Nicaragua and Peru. Primary exports from Latin America to China include minerals, vegetables, animal products, fuels and metals for industrial development. Chinese exports to the region are mostly higher value-added manufactured products, with experts cautioning the detrimental impact cheaper Chinese goods have had on local industries.

Chinese Political Interests in the Region

At its core, Chinese involvement in Latin America is part of China’s desire to expand its sphere of influence across the globe. As reported by the Council on Foreign Relations (CFR), China’s development strategy heavily focused on investment and trade, has allowed it to “build political goodwill with local governments and present itself as a viable alternative partner to the United States and Europe.”

As outlined in the 2025-2027 China-CELAC Joint Action Plan, President Xi Jinping’s five pillar plan will ensure greater Chinese engagement with the region in coming years. The plan is said to strengthen political ties, with China pledging to “to invite 300 political party officials from CELAC member states to visit China annually and continue to hold the China-Latin America Political Parties Forum” as part of the “Solidarity Program”. 

Another key factor behind China’s interest is reportedly its push to isolate Taiwan. As China does not engage in diplomatic relations with countries recognizing Taiwanese sovereignty as part of the “One China” principle, Latin American support has reduced over the years. In 2023, the Central American Parliament (PARLACEN) expelled Taiwan as a permanent observer and voted to replace it with China, exemplifying the tremendous shift in Latin American support for the island in recent times. Especially with upcoming elections in Taiwan-allying nations including Argentina and Guatemala in 2027, and Paraguay in 2028, closer ties with party leaders may play to China’s favour.

Additionally, while European experts have previously expressed that “Military engagement is neither a significant aspect of China's activities nor a key objective of its strategy towards the region”, there have been prior efforts for greater military cooperation.  The “Peace Program” of the five pillar plan, calls for greater collaboration in “disaster governance, cybersecurity, counterterrorism, anti-corruption, narcotics control and combating transnational organized crime” in efforts to implement the Global Security Initiative, possibly alluding to greater alignment in security and defence strategies.

U.S Involvement and The Road Ahead

In 2008, a Task Force Report from the Latin America Studies Program expressed that “Latin America has never mattered more for the United States”- nearly two decades later, this observation remains just as relevant.  

During President Trump’s first term in office, he imposed sanctions on several countries in the region, and cut aid to Northern Triangle countries. In 2021, with President Joe Biden in office, the U.S. launched the “Build Back Better World” (BRW) program with the support of the Group of Seven (G7). B3W, later renamed to the “Partnership for Global Infrastructure and Investment”, was supposed to counter China’s BRI by “developing infrastructure in low-and middle-income countries, including in Latin America.” Analysts say that the Biden Administration did not approach trade in the region with the same urgency they did as resolving disputes with the European Union (EU), trade leadership in the Asia-Pacific among other factors.

Since returning to office in 2025, President Trump has had a more assertive approach to the region. With the announcement of global tariffs at 10 percent base rate, with higher rates placed on countries like Nicaragua and Mexico in Latin America, many Latin American economies now face additional economic pressure. Critics argue that such policies could deepen Latin America’s engagement with China, and further dwindle U.S. influence in its own hemisphere. 

At the start of his administration, President Trump signed an executive order designating cartels and transnational gangs as foreign terrorist organizations. More recently, under President Trump’s counter-cartel mission, more than 4,000 Marines and sailors have been deployed to the region to counter drug cartels, in addition to; destroyers, reconnaissance aircraft and a nuclear powered submarine under U.S. Southern Command. Analysts at the Washington Office on Latin America (WOLA) warn that such operations could set back region-wide relations for many years, and have a detrimental impact to the other U.S. interests if there is to be “collateral damage”.

Conclusion

China continues to grow closer in economic and political relations with Latin American nations through initiatives like the BRI, trade partnerships and infrastructure projects. Recent U.S. measures, including tariffs and military deployments indicate an assertive approach, prioritizing U.S. security, but risk straining relations and ‘losing out’ to China in the Western Hemisphere. With the competition for regional dominance intensifying, the question remains: can the U.S. rekindle its influence in Latin America whilst effectively maintaining its global role?