In Latin America, China is finally losing ground
It is unusual, but it is happening. China is losing ground in Latin America.
This week, Mexico announced that it will review its tariff policy over Beijing, closing once and for all the back door to access U.S. markets. Meanwhile, an American investor group signed a huge deal taking control over key ports near the Panama Canal.
These two achievements shows that Trump’s "America First" foreign policy is yielding concrete results in a very short time. The question is, what is needed to cement these results and build strong and healthy relationships in the Americas?
Over the last two decades, Latin America has been seduced by China’s economic investment projects. The communist state has an enormous hold on telecommunications, the lithium and copper industries, ports and other critical infrastructure in the region.
A U.N. report states that, from 2000 to 2022, the trade in goods between Latin America and China expanded 35-fold, while the region’s total global trade increased only four-fold. Bilateral trade, which scarcely exceeded $14 billion in 2000, totaled nearly $500 billion by 2022. During this period, U.S. foreign policy was either distracted or in denial, allowing China to gain ground in its longtime backyard.
Fortunately, this situation is starting to change.
This week, President Claudia Sheinbaum says Mexico is seeking to reduce imports from Asia. The so-called Plan Mexico is reviewing the priorities of the U.S.'s main trade partner. "We privilege the countries with which we have trade treaties," Sheinbaum stated. "We do not have any with China.”
Two years ago, this kind of statement would have been unthinkable. In 2023, Mexico spent $4.6 billion buying cars subsidized by China's communist regime — more than the $4.4 billion allocated in the acquisition of American cars.
Now Mexico is not only reviewing its trade policy but also improving its security cooperation with the U.S. After 40 years of unsuccessful efforts, the U.S. brought to justice the killer of DEA hero, Enrique "Kiki" Camarena. Presidents Reagan, Bush, Clinton, Obama and Biden had tried for many years to capture the infamous drug lord Caro Quintero, but only the Trump administration succeeded, thanks to the renewed cooperation with its neighbor.
To the South, Hong Kong-based CK Hutchinson had control over the Balboa and San Cristobal ports in Panama. Those days are now over.
The American company BlackRock consolidated the purchase to achieve a deal to buy 90 percent of Panama Ports Company, which runs the two facilities at either end of the Panama Canal in the Pacific and the Atlantic Oceans. BlackRock also is acquiring 80 percent ownership of 43 ports operated by Hutchinson in 23 countries. These ports are strategic for trade and security, and now an American Company is taking control of them.
After a visit by Secretary of State Marco Rubio, Panama ended participation in China's Belt and Road Initiative. This is the first country, but definitely not the last, to make a significant decision regarding its alliance with China.
The winds of change may be blowing. For many years, China has been living the dream, building mega projects, acquiring strategic minerals, installing satellite stations. Now the U.S is starting to reverse the trend and recover its lost leadership.
Investments, incentives and interactions are key to displace China’s presence in the Americas. The success achieved in a matter of weeks shows that there is a lot of space to renew, revamp and reinvigorate the relationship between the U.S and Latin America.
The U.S. must also draw up a plan on Latin America to remove and replace Chinese technology such as Huawei, ZTE and others, which represent a threat to local security and prosperity. The closeness between these companies and China's military sector and communist party is a real problem.
Meanwhile, although the "peace through strength" approach is showing great results, it is also necessary to build upon trust, transparency and teamwork. The U.S. and its neighbors must work together, not only based on relationships of power but also on the power of strong relations. This is the right time to do so.
Arturo McFields is an exiled journalist, former Nicaraguan ambassador to the Organization of American States, and a former member of the Norwegian Peace Corps. He is an alumnus of the National Defense University’s Security and Defense Seminar and the Harvard Leadership course.
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