China has been flooding Latin American markets with low-priced exports, especially autos and e-commerce goods, as its exporters adjust to U.S. President Donald Trump’s tariffs and geopolitical moves.
The world’s second-largest economy has become a major trading partner for many Latin American nations, seeking access to their abundant natural resources and growing markets while expanding its influence in a region Trump views as America’s Backyard.
Chinese businesses face slow demand at home. They need new markets for their products as the country ramps up production in many industries. Exports to Latin America, a market of more than 600 million people, and other regions have climbed while exports to the U.S. fell by 20% last year.
“Latin America has a solid middle class, relatively high purchasing power and real demand,” said Margaret Myers, director of the Asia and Latin America program at the Inter-American Dialogue think tank in Washington. “Those conditions make it one of the easiest places for China to offload its excess industrial production.”
The influx of made-in-China cars, clothing, electronics and home furnishings has rankled countries trying to build their own globally competitive industries. Some, such as Mexico, Chile and Brazil, have raised tariffs or taken other measures to protect their local industries.
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Source: Fortune
