As Chinese presence expands into Latin America and the Caribbean, the United States remains comparatively unimaginative, if not inactive.
Three years ago, Foreign Policy authors Andrés Malamud and Luis Schenoni confidently assured the world that “with a dwarfing economy and squarely under U.S. hegemony, [Latin America] may be less relevant globally than at any point in the past few centuries.” Yet to anyone looking today, the region has clearly become a crucial pawn for regimes ranging from China to Iran. While the U.S.’s opponents strengthen ties with our materials-rich neighbors, the disparity in regional research and attention grows.
China has far surpassed the U.S. in developing trade relations with Latin American countries. While U.S. trade with Mexico accounts for close to 71% of trade with the entire region, China dominates in trade with Brazil, Argentina, Peru, Venezuela, Chile, and many others. Given these realities, one would anticipate a change in trade policy — or at least an increase in attention — from Washington. But not much has changed.
Last year, Biden requested a $659.1 million foreign aid budget via the Development Assistance account for Latin America and the Caribbean. The stated goal of this assistance is to spur “economic growth and social welfare in low- and middle- income countries.” According to the request, funds would be used for long-term projects ranging from agriculture and education, to environmental protections and democracy.
These lofty goals are as commendable as they are impractical. In the last few years Latin America has only become increasingly authoritarian, and China has only gained more control in the region.
As reported by The Economist, the region’s score on the Democracy Index has declined for seven consecutive years, recording “the biggest democratic recession of any region over the past 20 years.” Still, the U.S. continues to perpetually throw away money in efforts to advance democracy and good governance, while China prioritizes strengthening their economic ties and extracting tons of resources.
In the critical minerals arena, for example, China established its dominance through billionaire contracts. China gained 46% of global lithium production by investing in the Chilean company Sociedad Química y Minera (SQM), and 10% of global columbite production through savvy acquisitions in Brazil. Similarly, in countries like Venezuela, which should by now be seen as more than synonymous with oil, Maduro inaugurated the largest coltan concentration plant in the region, as the Venezuelan regime continues their mission to excavate more than two-trillion dollars worth of minerals from the Orinoco Mining Arc.
Access to these minerals will be essential if the United States and its allies want to lead the upcoming industrial revolution, as they are key components in batteries and electronics more broadly. Yet even in the U.S.’s neighborhood, China is winning. The continuation of these trends, of which critical minerals are just a portion, with security concerns increasing, should trouble those who care about U.S. hegemony, as well as those who care about democracy.
It’s clear that the United States has allowed the “deeply traumatic” experience of being labeled El Imperio by Latin American left-wing autocrats to translate into considerable avoidance. Yet now that U.S. policymakers find themselves racing China to gain control over supply chains and critical minerals, the strategic significance of Latin America appears crystal clear.
Excessive intervention on the part of the U.S. during the Cold War catalyzed a wave of anti-U.S. sentiment that greatly impacted the U.S.’s relationship with states that were once great allies, like Venezuela and Argentina. Still, it’s time for the U.S. to learn its lessons and begin taking practical steps to distance China from the region. Avoidance is not an option.
If conflict with China is as plausible a scenario as many predict, then the U.S. and its allies must match, if not surpass, China’s strategic investments in the western hemisphere. Additionally, if the U.S. wants its investments to bring about actual results, policymakers must learn some lessons from China, so that its investments advance tangible goals, not fail in advancing ideology.
This argument does not translate into a Latin America strategy vacuous in principles. It does demand a policy grounded in reality, a policy that does not seek the radical transformation of states above all else, but rather a policy that uses diverse mechanisms to achieve goals that are concretely in the U.S.’s interest.
The U.S.’s declining economic sway over its hemisphere benefits neither the America First nor the Democracy Always crowds. Everyone loses when policymakers deprioritize Latin America. As such, every U.S. citizen should worry about living in a country where the Chinese Communist Party cares more about their region than their leaders do.
Juan P. Villasmil is a Latin America specialist, focusing on Chinese involvement in the region. He is also a contributor at Young Voices.