South America’s largest trading bloc, Mercosur (Brazil, Argentina, Uruguay, Paraguay), recently inked a comprehensive free trade deal with the European Union after more than 20 years of negotiations. The deal now awaits ratification and implementation.
On the other side of the Andes, Chile is negotiating a comprehensive economic partnership with India, the world’s fourth-largest economy.
Meanwhile, American trade policy is undergoing major shifts characterized by less free trade and more protectionism. But what’s striking is South America’s unchanged advance towards multi-alignment and away from a US-centered hemisphere.
When I visited Santiago in 2018, I noticed something I hadn’t seen before – Chinese cars. Brands I hadn’t heard of, such as Changan, Maxus, Great Wall, and Haval. Today, Chinese cars account for 40% of automotive sales in Chile. What was once a budding trend is now an avalanche.
Who could have imagined such a rapid reversal of the United States’ position in the region 20 years ago? The US was simply too close, too big a market, and too powerful. It remained, in the words of more than one Latin American writer, “The Colossus of the North.”
Then came China’s meteoric industrialization of the early 21st century and its voracious appetite for copper, tin, oil, iron ore, timber and soybeans.
Strong Chinese demand raised prices for South America’s commodities and that boom helped pull millions out of poverty. Between 2000 and 2014, Latin America’s poverty rate decreased from 27% to 12%, according to the International Monetary Fund, an extraordinary achievement and one tied to China’s rising fortunes.
During the same 2000 to 2014 period, the American political system became significantly more dysfunctional and polarized amid two wars in Iraq and Afghanistan and an opioid epidemic that claimed 500,000 American lives.
Of course, the American market remains massive and indispensable for countries in the Caribbean Basin, but the United States isn’t the giant that it once was. And China is the principal reason why.
In 2013, Chinese leader Xi Jinping announced the Belt and Road Initiative, a massive campaign to build infrastructure worldwide, from bridges and power plants to stadiums and port facilities.
Today, Peru’s Chinese-funded Port of Chancay is poised to become the largest deepwater port on the Pacific side of South America, while Bolivia’s El Mutún Steel Plant is just the latest geopolitically significant China-funded megaproject in the region.
When China replaced the United States as South America’s largest trading partner in 2020, that tectonic shift received scant US media attention. Instead, immigration and drug cartels or flamboyant leaders like Jair Bolsonaro and Nayib Bukele dominated headlines. But sometimes impersonal, transformative processes are the real story.
China developed its position of strength over two decades and the rise of China has been broadly good for the region. What was once a rising trade in commodities between China and Latin America turned into a very different kind of relationship in which China builds hydroelectric dams and installs 5G internet.
Although a shadow of China’s presence, India aims to deepen economic ties with South America in pursuit of “strategic autonomy” or avoiding overreliance on any single global power. And South America welcomes India’s push for diverse trading partnerships, as it wants the same thing.
During the 20th century, Latin American governments often viewed European or American capital with suspicion. There were ideological reasons for that position, but it also had to do with the lack of options.
In a multipolar world, trade and capital investments are no longer essentially Western, which makes for a far more balanced economic outlook.
To be sure, some things haven’t changed. South America is still reliant on commodity exports and foreign capital continues to raise issues related to national sovereignty (as it does anywhere else).
But it’s an era that looks remarkably different from the late 19th century when British capital prevailed or the mid-20th century when American capital predominated.
As the US-China trade war unfolds, South America’s economies seem destined to emerge more diversified and balanced. US tariffs have increased the impetus for EU countries to ratify their deal with Mercosur. Brazil’s exports of meat and grain to China have already surged in the wake of the new US tariffs.
Amid the current unpredictability of US trade policy, one thing seems clear: South America will continue to diversify its trade relationships and there are many new options for navigating the future.
Dr John R Bawden teaches Latin American history at Oregon State University. He is the author of “The Pinochet Generation: The Chilean Military during the Twentieth Century.”
“Strong Chinese demand raised prices for South America’s commodities and that boom helped pull millions out of poverty. Between 2000 and 2014, Latin America’s poverty rate decreased from 27% to 12%..” Just imagine what the poverty rate is today in 2025. Isn’t that a good reason to lean towards China?
China is a communist authoritarian police state. No amount of money can justify slavery.
No. Small people, small weapons.
You would think that South America would be proud to be part of North America, but the world knows that if South America didn’t have the name America attached to it Russia, China every country trying to add land to their conquest would have attacked South America ! We know this as a fact ! The only reason they haven’t attacked and taken south America is because Russia and China Know America would not let them steal the body from the head , North America is the head and South America is the body , without each other they are not whole , North America may not get in South America’s business, but that is because America is wants South America to do their own thing , America is don’t want to stifle part of themselves . The whole country knows that China and Russia will not do anything to help anyone until they give up either land or oil or minerals , something , not just money . Look at the world we live in today , China has already taken so much from so many , most of these countries have helped China survive during their hardest times, China was a starving nation <America and many other nations helped China, taught them how to survive , and China has stolen what they couldn't buy . At this very moment they are trying to steal the South China sea , Why because map makers decided to call it the South China sea ? I guess now you know why Trump decided to change the name of the Gulf of Mexico ! Realize that there is a real reason that South America is still free today , my belief is that the world knows if China and Russia were to Attack South America America and try to take over , the head would protect the body , we have to also remember that Canada is also part of North America, we have Canada as the head , America as the Heart , and South America as the powerful legs , all parts must work together to survive.
China and Russia are the most non-transparent countries in the world, no country should ever truly trust them , they have stolen trillions of dollars in technology from the US and if it were not for them stealing stealth technology from America they would not have this technology today , that is a fact . I have a question to ask ? If China already had stealth technology why did they have to steal it from a country that has helped China survive long before world war ll ? . America trusted China at one point , but how can one trust another who has been stealing everything you have ? America has given China technology in manufacturing, China had no such thing until America began building companies in China to help them industrialize , realize that before this they were a starving nation, after all the deception America is now helping in India to revolutionize the country, China at the moment is doing everything they can to make India look unstable , this is why China has tricked Pakistan into attacking India ! Pay attention, America has always done it’s best to stop larger more powerful countries from taking over smaller weaker countries, many American soldiers have died because of this , but their beliefs were if they didn’t try to help smaller weaker countries , other countries would take the over , either by loaning them a large amount of money that they could never pay back , they often double interest rates so the country could not pay it . Stop patting yourself on the back for stealing from the people of the world. Pay attention.
“immigration and drug cartels or flamboyant leaders like Jair Bolsonaro and Nayib Bukele dominated headlines. But sometimes impersonal, transformative processes are the real story”
Always.
Indeed.
Well S America does have a stray dog problem, they need a few more Ch takeaways