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Americas for the Chinese? US should tend to its own ‘backyard’

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If the Trump administration is serious in counterbalancing Chinese influence in the world, it could begin in its own “backyard.”

Most Americans may not realize it, but U.S. primacy over the Western Hemisphere – taken for granted for nearly 200 years – has diminished.

In 1823, U.S. president James Monroe – concerned about the possibility that European powers could try to regain their lost colonies in the Americas – issued a message to Congress. He declared in the strongest possible terms that any attempt from Europe would be interpreted as “an unfriendly disposition toward the United States.”

What immediately became known as the “Monroe Doctrine” meant in practice a separation between the Americas and Europe, and it was the first explicit indication that the United States was willing to establish a sphere of influence in the Western Hemisphere. In Latin America, the doctrine has been summarized in the phrase “America for the Americans” – a double entendre since “Americans” in this case may refer to the whole continent or just to the United States.{mosads}

The Monroe Doctrine turned out to be a symbol of United States hegemony in the Western Hemisphere. In fact, during the 19th and 20th centuries, the United States was such an indisputable power in the region that many policymakers referred to it as a “backyard.” The 21st century, however, may be witnessing the era of “America for the Chinese.”

Since the beginning of the current century, Latin America has become the second largest destination of Chinese investment, behind only Asia. China has surpassed the United States to become the main trading partner of the largest economies in South America such as Brazil, Chile and Peru. In these three cases, the exports to China are about double as those to the United States.

Chinese influence is also evident in the development of infrastructure in the region, from the building of highways in Ecuador to hydroelectric plants in Argentina, port projects in Panama and even an underwater fiber optic cable that will connect Chile to China, due to be completed ahead of schedule in 2019.

According to the China-Latin America Finance Database there has been more than $150 billion in loans and credit lines for governments in Latin America since 2005. There are even projects for building a Nicaraguan Canal, which although it seems unlikely to be completed any time soon, its sheer scale demonstrates China’s ambitions in the region.

It is worth noticing that, contrary to Western institutions such as the World Bank and the IMF, the conditions for borrowing from the Chinese are not based on the traditional austerity measures and usually have very limited safeguards.

Closer economic relations with Latin America have been followed by stronger political ties.

During the first decade of the 21st century, President Hu Jintao traveled more to the region than President George W. Bush. Likewise, many Latin American leaders – such as Lula, Kirchner and Chavez – also visited Beijing more than Washington during the 2000s. China has signed many strategic partnership agreements with Latin American countries during this period including with Venezuela, Mexico, Argentina, Peru, Chile, Costa Rica and Ecuador. More countries in the region have recognized the PRC over Taiwan, in some cases based on incentives such as subsidies and economic concessions.

Finally, China has also become increasingly involved in multilateral fora in Latin America. It was accepted as a member of the Inter-American Development Bank in 2008 and it became a permanent observer in the Organization of American States in 2004. It is also a member of the Forum for East Asia-Latin America Cooperation, created in 2001, and has engaged in multiple dialogues with different regional organizations such as Mercosur and the Andean Community.

So far, the United States has done little to counterbalance China in the region. As a matter of fact, in spite of its rhetoric, the policies pursued by the Trump administration may end up increasing China’s standing in the Western Hemisphere.{mossecondads}

The US trade war with China opened up new market opportunities for Latin American exports, thus strengthening the trade flow between them. For example, one of the major moves the Chinese made to retaliate was a 25 percent tariff on US soybeans, which happens to be the top Brazilian export product. The Chinese intend to replace its soybean imports from the United States with Brazilian and Argentinian beans. One study by a Brazilian industrial association concluded that the US-China trade war may increase the country’s exports to China by $ 6.4 billion.

Likewise, the US withdrawal from the Trans-Pacific Partnership in 2017, which included Mexico, Chile, and Peru – some of the largest Latin American economies – and excluded China, has opened the possibility for China to fill the vacuum left by the United States in sectors other than commodities: value-added goods. Since 2015 China has invested in a program of industrial and technological transformation called “Made in China 2025” that includes the development of robots, artificial intelligence and big data. Ignoring the long-term potential of these changes could be a strategic mistake for the United States.

In the largest economy of Latin America, Brazilian president-elect Jair Bolsonaro is trying his best to imitate Donald Trump, which includes berating China. During the campaign he said that “China isn’t buying in Brazil. China is buying Brazil.”

President Trump has a historic opportunity in the region if he is willing to take advantage of the most US-friendly Brazilian government in decades to showcase to Latin Americans countries the advantages of trading Chinese influence for the old-fashioned US influence.

Maybe it’s time for Trump to consider making America for the Americans great again.

Carlos Gustavo Poggio Teixeira is a visiting scholar in the Department of Government at Georgetown University. He received a Ph.D. in International Studies from Old Dominion University in Virginia as a Fulbright Scholar and he is a currently a professor at the Pontifical Catholic University of Sao Paulo and FAAP in Brazil.

Fernanda Magnotta is a Ph.D candidate at the San Tiago Dantas Program in International Relations in Sao Paulo, Brazil. Her Ph.D research under progress aims to discuss the triangle between the US, China and Latin America in the 21st century. She is currently a professor and the coordinator of the International Relations course at FAAP University in Brazil.

Tags China China–United States trade war Donald Trump Latin America Monroe Doctrine South America

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