The Ankara Center for Crisis and Policy Studies (ANKASAM), presents the views of Foreign Policy Analyst Natalia Hidalgo Martínez on the impact of the U.S.-China competition on the foreign policy choices of Latin American and Caribbean countries, the balancing efforts of regional states, and the opportunities and risks posed by Chinese investments for strategic autonomy.
1.How is growing US-China competition reshaping Latin America’s foreign policy choices?
The second Trump Administration has brought about a noticeable shift in Latin American and Caribbean (LAC) governments’ foreign policymaking. President Trump’s second term has marked a more assertive approach toward the Western Hemisphere, one that echoes the logic of the Monroe Doctrine by seeking to reassert US influence across the region. The U.S. President has unhesitatingly upended the traditional use of economic instruments to extract maximum concessions from its regional partners on matters not necessarily linked to trade, including China’s presence in the region.
As a reaction, I think LAC countries realize their need to navigate their ties with Washington and Beijing more carefully than before, weighing the political costs of upsetting the United States against the economic benefits of keeping close relations with China. Rather than aligning explicitly with one side, most are likely to continue pursuing a strategy of pragmatic hedging whenever possible: preserving their security and political relationship with the United States while maintaining economic partnerships with China.
This is pertinent at a time when Presidents Trump and Xi Jinping project contrasting images of themselves to the world: the former through an unpredictable, coercive approach and the latter through a reliable alternative that respects sovereignty. Colombia, for instance, has joined the BRI and the BRICS New Development Bank. In Brazil, Washington’s backing of Jair Bolsonaro and tariff threats have pushed Brazil closer to China (even raising the prospect of also joining the BRI).
Countries whose economies depend heavily on access to the U.S. market, or whose leaders –some of them recently elected– enjoy particularly close ties with President Trump may be more inclined to accommodate Washington’s demands publicly to avoid diplomatic confrontation. Privately, however, they remain reluctant to distance themselves from China. Argentina illustrates this dynamic: President Javier Milei was critical toward China before entering office, but, despite being an ideological ally of his U.S. counterpart, Argentina’s economic reality pulls him into courting Chinese investment and trade.
Some governments might see the U.S. intention to reduce China’s influence in its backyard as an opportunity to maximize their bargaining power by subtly encouraging both powers to compete for influence. That said, the room for hedging is narrowing, particularly in those LAC countries closer to the United States. In February 2025, Panama withdrew its BRI membership. Sustained pressure from Washington might further lead to recognizing Taiwan’s sovereignty.
Mexico, in particular, faces one of the hardest balancing acts, given its location that makes it indivisible from US economic and national security interests. Concerns over Chinese firms using Mexico as a backdoor to enter the U.S. market and circumvent U.S. tariffs were a point of contention in the USMCA renegotiation, prompting Mexico to tighten its screening of Chinese investment or to raise tariffs on Chinese cars and auto parts.
2. Can Latin American states balance their relations with Washington and Beijing without being drawn in the great power rivalry?
I think it’s becoming an increasingly difficult game to play. As mentioned earlier, countries are trying to preserve strategic ambiguity amid great-power rivalry. However, when the room for maneuver narrows, as in the case of Mexico, they are most likely to align with Washington.
Another important consideration is that PRC infrastructure projects have a “dual-use· purpose, used for both commercial and security purposes. Under China’s 2017 National Intelligence Law, all companies, including port operators, are required to cooperate with PRC security and intelligence services. In the event of intensifying tension between the United States and China or a conflict in the Taiwan Strait, the PRC could leverage these assets to restrict or delay U.S. commercial or naval access. This exemplifies how some investment choices can draw LAC into the broader dynamic of great power competition.
3. Do Chinese infrastructure and financing initiatives provide greater strategic autonomy, or do they create new forms of dependence?
To start with, strategic autonomy cannot be confused with replacing one source of dependency with another. In my view, any financing model that fails to allow the recipient country to build its own productive capacity, strengthen local industries, and generate sustainable growth by itself ultimately risks creating a new form of dependency, regardless of whether the lender is China or another external power.
That said, China’s investment in LAC has undoubtedly spurred economic growth in some areas and expanded the region’s strategic options. Beijing has indeed paid sustained attention to a region that, for many years, has been perceived as a low priority by many governments worldwide, the United States among them. Where some governments and institutions failed to engage effectively, China offered lucrative financing and investment deals with easy access that have been difficult for others to match. This has allowed some LAC countries to develop projects that would otherwise have remained out of reach.
However, signing these contracts risks becoming dependent on Chinese investment that sometimes takes longer to materialize. In addition, let’s not forget that Chinese loans must be repaid, creating financial obligations and debt traps that can become problematic in the long term if the projects fail to drive the expected economic returns. Although Chinese investment has helped LAC countries expand their strategic assets, becoming more strategically important does not necessarily mean becoming more strategically independent.
