How China Could Capitalize on Trump’s Disruptive Relationship with Latin America

In recent years, Latin America has become a key battleground for geopolitical influence, particularly between the U.S. and China. The news about the Chinese electric vehicle (EV) company BYD setting up a plant in Brazil on the land once occupied by Ford is a symbolic reminder of this competition. Ford’s exit from Brazil in 2021 and BYD’s decision to fill the void with a major investment highlights how shifts in U.S. corporate strategy and foreign policy could play into China’s hands. This dynamic is set to intensify with the potential return of Donald Trump to the White House, bringing with him policies that threaten to destabilize relations with Latin American countries. If implemented, these policies could create a ripe opportunity for China to expand its influence in the region.

Trump’s Promised Disruption in Latin America

Trump's rhetoric and past policies indicate a continued aggressive stance toward Latin America, focusing on issues like trade tariffs, the mass deportation of migrants, and a general "America First" approach. These actions could potentially disrupt the region's stability and foster resentment toward the U.S. For example, Trump’s threat to deport millions of migrants from the U.S. to Latin American countries would create significant economic and social pressures, which could lead to instability in countries already dealing with political and economic challenges. Additionally, the imposition of harsh trade tariffs could further sour relationships with U.S. allies in the region, particularly if Latin American nations feel that their economic growth is being stifled by protectionist policies.

At the same time, Trump’s foreign policy undercuts the influence of U.S. corporations in the region. The exodus of U.S. companies like Ford, which left Brazil after more than a century of operations, creates a vacuum that China is eager to fill. As U.S. firms pull out of markets like Brazil, China steps in, offering investments, infrastructure development, and new trade partnerships. This trend has been observable in several Latin American countries, where China has increasingly become the region’s largest trading partner, surpassing the U.S. in terms of total trade volume.

The Growing Role of China in Latin America

China’s growing influence in Latin America is partly due to its non-interventionist approach and its willingness to make investments without imposing political conditions—something that contrasts with U.S. policies, which often come with demands for democratic reforms, human rights guarantees, or alignment on foreign policy issues. This non-conditional approach makes China an attractive partner for many Latin American countries, particularly those under leftist governments, who may be less inclined to align with U.S. policies. As the news item mentions, with four of the region's five largest economies currently led by leftist governments, the temptation for these nations to align with China, rather than the U.S., becomes more pronounced.

Moreover, China's economic clout has enabled it to offer alternatives to U.S. influence in the region. Its Belt and Road Initiative (BRI) and other trade partnerships allow China to make massive investments in infrastructure, energy, technology, and more. For instance, BYD’s investment in Brazil represents just one facet of China’s expanding footprint, as Chinese companies continue to build ports, roads, and railways in Latin America, often in exchange for access to raw materials like lithium, copper, and oil. These infrastructure projects further deepen the region’s economic integration with China, making it more difficult for the U.S. to maintain its traditional dominance in the area.

Trump’s Policies and Latin America's Shift Toward China

If Trump were to return to the White House, Latin American countries may increasingly view China as a viable alternative to U.S. engagement. The region has already seen a shift toward China in recent years, with leaders like Argentina’s Javier Milei signaling openness to stronger ties with Beijing. Milei, who initially had a favorable view of the U.S., has now described China as a “very interesting trading partner” because of its willingness to engage without political strings attached. His turn toward China underscores the broader regional trend, as countries look for economic partners who offer stable and beneficial trade relations without the political baggage that often comes with U.S. involvement.

For instance, under the Trump administration, U.S. sanctions, tariffs, and trade wars with China had global ripple effects, and Latin America felt these impacts, particularly in countries that relied heavily on exports to China. In contrast, China’s appetite for Latin American goods—ranging from agricultural products to minerals to energy—has kept its trade relations with the region robust. The fact that China doesn’t demand policy changes or the same level of ideological alignment as the U.S. makes its partnership especially attractive for countries with governments that prioritize economic growth over political compliance.

Furthermore, Trump’s potential move to implement tariffs or trade restrictions could lead to greater trade diversification by Latin American countries. If U.S. markets become more hostile or less accessible, many countries in the region could lean more heavily into the Chinese market, which is not subject to the same punitive measures.

How China Could Capitalize on U.S. Withdrawal

China's strategic engagement in Latin America is increasingly based on filling the gaps left by U.S. retrenchment. If Trump follows through on policies like imposing tariffs on key sectors or deporting migrants en masse, this could lead to economic instability in several Latin American countries. This, in turn, would prompt governments to seek out new economic partners. China has demonstrated an ability to step in quickly, offering capital, technology, and infrastructure in exchange for access to raw materials and strategic trade routes.

As the BYD investment in Brazil illustrates, China’s ability to adapt and fill gaps left by U.S. firms is a clear signal of its growing presence. The Chinese firm is investing in an automotive hub where Ford once operated, taking advantage of the opportunity presented by Ford’s exit. This is emblematic of the broader trend where Chinese companies are actively seeking to replace U.S. investments and capture market share across a range of industries, from manufacturing and energy to telecommunications and technology.

China’s expanding influence could also lead to increased political and diplomatic sway in the region. As countries deepen their economic ties with China, Beijing will gain leverage to influence policies in Latin America, potentially encouraging these nations to align with China on global issues or reduce their reliance on the U.S. in multilateral forums like the United Nations or the World Trade Organization.

Conclusion: A Potential Windfall for China

In conclusion, if Trump implements his promised disruptive policies in Latin America, China stands to gain significantly. The economic and political fallout from a more isolationist U.S. approach could push Latin American countries further into China’s orbit. China’s non-interventionist stance, coupled with its growing economic clout, makes it a highly attractive partner for countries in the region, especially as they seek stability and growth in the face of U.S. uncertainty.

The expansion of Chinese investments, as seen with companies like BYD in Brazil, is just one example of how China could benefit from a vacuum created by U.S. disengagement. As Latin American nations seek new economic opportunities and diversify their trade relations, China is well-positioned to capitalize on U.S. withdrawal, reinforcing its position as the region’s dominant trading partner and strategic ally.