Customs chaos - China positions itself in Latin America

Brazil is planning a railway connection to the new Peruvian port of Chancay, which China has financed. The country hopes to use this to reorganize its exports and imports in the long term and secure the flow of goods. The Brazilian business magazine Valor predicts that Chinese interest in investing in Brazil is growing again. According to media reports, Colombia is at least considering joining the so-called Chinese Silk Road project , and Venezuela is seeking closer cooperation with Chinese oil companies.

Such reports from the last few days indicate that the punitive tariffs imposed by US President Donald Trump on Latin American countries are causing the region to move closer to China rather than away from Beijing.

China pursues longer-term goals

Currently, the trade conflict is primarily causing uncertainty: "The most important thing, especially for Latin America, is to learn how the new rules of the game work. What we are currently observing is a lot of uncertainty, constant change, and the lack of clearly defined rules," says Vladimir Rouwinski of the Research Center at the University of ICESI in Cali, Colombia, in an interview with Deutsche Welle. Practically every week, there are new reports, announcements, and demands from Washington, making it difficult for the other side to adapt to the constantly changing situation.

China, on the other hand, appears to be sticking to its long-term strategy. "China won't be keen on simply changing its strategies from one week to the next," says Rouwinski. Beijing is more known for pursuing and implementing its plans and goals over the long term. "However, there is a possibility that China will expand its presence and use Latin America as a short-term pillar of support," says Rouwinski.

China appears more trustworthy

Enrique Dussel-Peters, coordinator of the Center for Mexico-China Studies at the UNAM University in Mexico City, takes a similar view: "China has been particularly active in its South-South cooperation strategy for several decades. Chinese Foreign Minister Wang Yi emphasized in early March the importance of cooperation between China and Latin America: a relationship based on mutual respect, equality, and mutual benefit. The contrast with the US President's executive orders since taking office in January could not be greater." Trade, investment, and infrastructure projects with China today have a significant impact on the Latin America and Caribbean region, the expert said. "In the current confrontation between the US and China, Beijing has proven itself to be a trustworthy and long-term partner."

Latin America – problem or opportunity?

There are different approaches to the region, Brazilian political scientist and China expert Mauricio Santoro told DW: "The US government views Latin America as a problem. The Chinese government, on the other hand, sees it as a region with economic opportunities."

This pattern didn't begin with Trump, but has been recurring at least since the beginning of this century. "However, the current US president's political agenda has exacerbated various tensions with Latin America in areas such as trade, migration, and organized crime. Washington's agenda for the region is heavily negative, focused on difficulties, and has little to offer in terms of advantageous agreements and prospects for mutual benefit," says Santoro.

The USA and China both remain important trading partners

In contrast, China's rapid economic growth in recent decades has led to an exponential increase in its trade with Latin America. The Chinese are often the largest or second-largest trading partner of the region's countries. With Brazil, for example, the volume of bilateral trade has increased from $1 billion in 2000 to over $130 billion today. "Latin American countries don't want to and can't choose between the US and China," says Santoro, because both countries are very important to their respective economies. Currently, however, a decline in American influence and a rise in Chinese presence in the region are being observed. "Dealing with this new situation presents a greater challenge for Washington, as the coercive tools used in the past no longer work, at least for the region's largest and most diverse nations, such as Brazil, Mexico, and Argentina."

Latin America: an important sales market for China in the future

Brazilian author and business journalist Gilvan Bueno takes a similar view: "China's exports have fallen by more than 60 percent since the start of the trade war," Bueno told DW. "Latin America will be a target for the Chinese, as they need to develop new strategies and geopolitical diversification to become less dependent on the American economy."

On this basis, it can be assumed that Africa and Latin America could be the new players to sell their own production and offset the decline in Chinese exports of more than 60 percent.