Latin America: Can US hard power stop China’s long game?

Since the US pledged to restore its preeminence in Latin America and the Caribbean, which it calls the western hemisphere, Beijing has encountered a string of setbacks there. Some observers have concluded that China is either losing ground or, more specifically, losing ports, power and presence in the region. But focusing on these tactical setbacks risks obscuring Beijing’s broader long-term strategy.

China’s temporary setbacks

At first glance, it seems that the US’s efforts to thwart China and restore its primacy in the region are bearing fruit. First, the US captured Venezuelan President Nicolás Maduro to stand trial in the US in January 2026, disrupting China’s political, economic and military inroads in the country.

Second, under US pressure, Panama seized Balboa and Cristobal in February 2026, ending Hong Kong CK Hutchinson’s 29-year management of these two strategic ports. Earlier, Panama had withdrawn from China’s Belt and Road, dealing Beijing a political blow as it was the first country in Latin America and the Caribbean to join the initiative in 2017. The announcement of its withdrawal was made during US Secretary of State Marco Rubio’s visit to Panama in February 2025.

Third, the US has further embarked on broader initiatives to rally countries in the western hemisphere to its cause. In particular, the Shield of the Americas, comprising 17 leaders and representatives from Latin America and the Caribbean, was launched by US President Donald Trump in March 2026 to deal with drug cartels and narco-terrorists as well as stop foreign interference (a veiled reference to China). While lethal military force has been used against the drug cartels and terrorist networks, there is less clarity on how America intends to keep malign foreign influences at bay.

The US appears to be resorting to the familiar tools of diplomacy, pressure, hard power, and to a limited extent on economic partnerships, to achieve this objective. During the Southern Seas Deployment organised by the US Naval Forces Southern Command, which began in March 2026, a US aircraft carrier visited Panama for the first time in more than 50 years. In February 2026, Marco Rubio addressed a regular meeting of the Caribbean Community Heads of Government in Saint Kitts and Nevis, marking the first time in ten years a US secretary of state attended such a meeting. In the same address, Rubio expressed the US's willingness to work with countries to develop their energy resources. The US is also likely to want secure access to the minerals produced by these countries.

Beijing’s broader strategy

However, it does not mean that US dominance in the western hemisphere is assured. Beijing’s courting of Latin America and the Caribbean is driven by higher order considerations. First, China regards the developing countries in Latin America and the Caribbean as key partners in building a multipolar world, where the voice and representation of developing countries led by China is accorded due recognition and importance. Correspondingly, the role of developed countries, especially the US, in such a world order would decline.

Second, Xi has put his imprimatur on China to strengthen ties with Latin America and the Caribbean, even before US President Donald Trump first assumed office in 2017. When Xi attended the China-Latin America and the Caribbean Summit in Brasilia in 2014, he announced the setting up of the Forum of China and Community of Latin American and Caribbean States to institutionalise the relationship. Xi has been personally involved in this ministerial-level forum convened roughly once every three years by either delivering the welcoming remarks or having his congratulatory message read out at the opening session.

Xi would further propose ways to strengthen China-Latin America and the Caribbean partnership, as in 2025 when he called on both sides to expand cooperation in emerging areas such as clean energy, digital economy, 5G telecommunications and artificial intelligence (AI), as well as pledging 66 billion RMB (about US$10 billion) credit to support development in Latin America and the Caribbean.

Third, China’s ties with Latin America and the Caribbean have expanded beyond the initial people-to-people exchanges in earlier decades into a variety of areas, including trade and investment, infrastructure, agriculture, industrial development, energy, finance, culture, sports and tourism, law enforcement, digital economy and e-commerce. The region has also been incorporated into China’s four global initiatives spanning development, security, civilisation and governance.

Although America is still the largest trading partner of countries such as Mexico, Nicaragua, the Dominican Republic and Colombia, China’s trade with Latin America and the Caribbean (especially those in South America) has shown sustained strong growth over the years. Bilateral trade reached US$565.3 billion in 2025, more than double the US$235.9 billion in 2015, growing at more than 9% annually.

Unlike America, China is actively involved in major infrastructure projects like the Chancay port (in Peru), Belgrano freight railway upgrade (in Argentina), Coca Codo Sinclair hydropower plant (in Ecuador), Mexico’s metro line and the planned Bi-oceanic corridor (that will link Peru’s Pacific coast with Brazil’s Atlantic coast).

Latin America and the Caribbean countries need China

Although Latin America and the Caribbean must contend with America’s heft and presence, they also see it in their interest to build ties with China, albeit to varying degrees. In one category are countries such as Brazil, which are critical of the US and seek stronger relations with China. Despite an apparent thaw in US-Brazil ties following Brazilian President Lula da Silva’s visit to Washington in May 2026, relations reverted to their testy state of affairs after America announced tariffs of 25% on Brazil’s imports in June 2026.

Beijing reacted swiftly by lifting restrictions imposed earlier on imports of Brazilian beef over foot-and-mouth disease concerns. The move coincided with the visit by Brazil's Foreign Minister Mauro Vieira to Beijing in the same month of June 2026 for the fifth round of comprehensive strategic dialogue with his Chinese counterpart Wang Yi. The Chinese response led Brazilian President Lula to shrug off the US punitive tariffs by declaring, “If you don’t want ​to buy from me, I will sell to someone ⁠else.”

Another category comprises countries effusively supportive of America while engaging China in a lower-profile manner. On the one hand, Argentina President Javier Milei has hailed his special relationship with US President Trump, stressed the importance of maintaining alignment with the US, and strongly supports US initiatives such as the Board of Peace and Shield of the Americas. On the other hand, Milei has underscored the need to expand Argentina’s access to overseas markets, including China, and called China a great trading partner. He even pointed out that the US, despite its geostrategic rivalry with China, continues to trade with the country.

The reality is that China is a key market for Argentina’s exports, such as grains (food and feedstock), meat (beef and pork) and lithium, which accounts for a growing share of bilateral trade. Although Argentina signed a US$20 billion currency swap arrangement with the US in 2025 and is under US pressure to reduce reliance on China, Buenos Aires is likely to renew a US$19 billion currency swap arrangement with Beijing (in place since 2009) that provides a useful credit line to shore up Argentina’s reserves and pay for imports from China. China further operates a deep space station in Patagonia, Argentina, ostensibly to support its space exploration and satellite tracking needs despite concerns over its dual use capabilities and lack of oversight from the Argentinian authorities.

A third group of countries comprises those that are generally less vocal but no less committed to developing and balancing ties with both the US and China. Chile was the first country in Latin America and the Caribbean to sign a free trade agreement with China in 2005. Today, China is Chile’s largest trading partner for copper, lithium, agriculture and forestry (such as cherries, grapes, salmon, wood pulp). America is Chile’s second largest trading partner and the only country in Latin America and the Caribbean to benefit from the US’s Visa Waiver Program.

However, Chile’s attempts to manage its ties with the world’s two superpowers is not without difficulties. The US opposes Santiago’s plan to commission China Mobile to install, operate, and manage a submarine fibre-optic system connecting Chile to Hong Kong. It saw China’s involvement as a threat to critical telecommunications infrastructure and regional security in the western hemisphere, although Chile views the project as part of its overall strategy to position itself as a digital hub in Latin America.

There have been no further updates on the project’s status since Chilean President Jose Antonio Kast, who is much more right-leaning than his predecessor, assumed office in March 2026. Some observers opined that if Santiago were to jettison the project, China could take it to Peru.

America’s preeminence vs Beijing’s persistence

Beijing’s long-term strategy to woo the developing countries in the western hemisphere for global influence complicates America’s efforts to restore its preeminence in the region. Another factor in Beijing’s favour is the inclination of countries there, even among the most vocal supporters of the US, to engage China for mutual benefit.

So far, the US has relied overwhelmingly on hard power, diplomacy and pressure, and only to a limited extent on economic cooperation to rally the countries in the western hemisphere to its cause. While such actions may yield short-term gains by nudging these countries closer to the US — or encouraging them to appear so — they also have the unintended consequence of reinforcing the view that cultivating stronger ties with extra-regional powers such as China is a prudent hedge, provided it is done quietly.

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