Latin American nations are implementing protective economic measures as competitively priced Chinese manufactured goods, particularly electric vehicles, rapidly capture market share across the region. This development comes amid China’s strategic expansion into emerging markets while facing domestic economic headwinds.
Brazil has witnessed remarkable penetration of Chinese electric vehicles, with industry data revealing that over 80% of the 61,000 EVs sold during 2024 originated from Chinese manufacturers, primarily BYD and GWM. Meanwhile, Mexico reported approximately 15% market saturation by Chinese automotive brands last year, signaling a significant shift in regional automotive dynamics.
The competitive pricing of Chinese exports, enabled by substantial government subsidies and cost-efficient production capabilities, has prompted defensive responses from several Latin American governments. Mexico has imposed tariffs reaching 50% on various Chinese imports including automobiles, appliances, and clothing. Brazil has moved to eliminate tax exemptions for low-value international parcels and increased levies on electric vehicle imports. Chile similarly implemented tariff adjustments and introduced a 19% value-added tax on low-value parcels beginning October.
This economic tension exists within a complex bilateral relationship framework. China provided approximately $153 billion in loans and grants to Latin American and Caribbean nations between 2014-2023, substantially exceeding United States’ contributions of roughly $50.7 billion during the same period. This financial influence, coupled with China’s extensive investments in regional infrastructure projects including dams and mining operations, creates a multifaceted economic interdependence.
Trade imbalances have become increasingly pronounced, with Mexico recording a $101 billion trade deficit with China in the first ten months of 2025 alone. Argentina’s trade deficit with China reached $8.2 billion last year, reflecting broader regional trends as China’s global trade surplus hit a record $1.2 trillion in 2024.
Experts note that China’s export profile has evolved significantly beyond basic manufactured goods. José Manuel Salazar-Xirinachs of the Economic Commission for Latin America and the Caribbean observed that China now demonstrates advanced technological capabilities, particularly in innovative sectors like electric vehicle production. This technological advancement, combined with competitive pricing, presents both opportunities and challenges for Latin American economies seeking to balance economic cooperation with domestic industrial protection.