HONG KONG (AP) — Chinese As its exporters adjust to U.S. President Donald Trump’s tariffs and geopolitical moves, Latin America is flooding its markets with low-priced exports, especially autos and e-commerce products.
world’s second largest economy It has become an important trading partner for many Latin American countries seeking access to abundant natural resources and growing markets as it expands its influence in the region that Trump sees as America’s Backyard.
chinese businesses We are facing slow demand at home. As the country increases production in many industries, they need new markets for their products. While exports to Latin America and other regions, where more than 600 million people live, increased, exports to the USA increased down 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. “These conditions make it one of the easiest places for China to offload its excess industrial production.”
influx chinese made carsclothing, electronics and home furnishings have outstripped countries trying to establish their own globally competitive industries. Some, such as Mexico, Chile and Brazil, have raised tariffs or taken other measures to protect their domestic industries.
Cheap e-commerce products gain market share
While cheap products from China are welcome news for many Latin American consumers, they are a headache for local businesses.
Chinese e-commerce platforms led by Temu and Sheinaccelerated this trend.
“I always use Temu to buy clothes or household goods. I find the same things at Temu that I find in branded stores or shopping malls, at a much lower price,” said Chilean restaurant manager Lady Mogollon.
Temu has an average of 114 million monthly active users Latin America Market intelligence company Sensor Tower predicts a 165% annual increase in the first half of 2025 compared to 2024. Shein’s monthly active users in the region increased by 18%.
It’s not just online shopping.
T-shirts, jackets, pants, toys, watches, furniture and many other products made in China fill the stalls of street vendors in downtown Mexico City.
Ángel Ramírez, manager of a lamp shop downtown, is having a hard time competing.
“The Chinese have invaded us in terms of goods,” said Ramírez, sitting behind the counter of his completely abandoned shop.
Over the past few years, the number of stores selling Chinese-made products has increased. mexico city Ramírez said downtown has more than tripled in size, with well-established Mexican stores going out of business in some cases.
Employment is lost due to imports
Argentina bears much of the brunt of increased Chinese imports due to local factories. close and laying off workers in a manufacturing sector that employs nearly a fifth of the workforce.
Argentine government statistics show that the volume of e-commerce imports, mostly from China, increased by 237% in October compared to the same month the previous year.
“We are operating at historically low capacity while imports are reaching record levels,” said Luciano Galfione, president of the Pro Tejer Foundation, a nonprofit that represents textile manufacturers. “We are under indiscriminate attack”
“The number of Chinese products coming to Argentina, this ultra-fast fashion, is extremely worrying,” said Claudio Drescher, president of the chamber of industry and owner of the Buenos Aires-born Jazmín Chebar clothing brand. “This is an international phenomenon, but now it’s starting to have really dramatic significance here.”
A Temu spokesperson said the marketplace offers local businesses in Latin America “access to a low-cost, scalable online channel that was previously inaccessible to many,” including opening up to domestic sellers in Mexico and Brazil in 2025.
Shein said in a statement that the company “respects the importance of local industries and fair competition.” He will not comment on broader trade policy discussions.
Chinese cars make headway in Brazil and Mexico
Mexico and Brazil, Latin America’s regional auto manufacturing hubs, are also under pressure from rising imports of low-priced Chinese cars.
Chinese automakers such as BYD and GWM see huge growth opportunities in Latin America. More than 80% of the 61,615 electric vehicles sold in 2024 will be in Brazil sixth largest automobile marketAccording to the Brazilian Electric Vehicles Association, they were Chinese brands.
Mexico imported 625,187 vehicles last year, making it the top destination for Chinese auto exports and surpassing Russia’s imports, according to the China Passenger Automobile Association.
Both Brazil and Mexico already have their own strong automotive industries.
As a base for major global manufacturers, Mexico is estimated to be the world’s seventh-largest automaker, but of the nearly 4 million vehicles it produced last year, about 3.4 million were exported. Brazil has produced approximately 2.6 million vehicles, including many EVs and hybrids. This compares with China’s production of 34.5 million vehicles, including more than 7 million was exported abroad.
“China has a comparative advantage over electric vehicles,” with affordable prices and major government support in an industry where scale is crucial, said Jorge Guajardo, partner at consultancy DGA Group and former Mexican ambassador to China.
Affordable Chinese cars appeal to many drivers and will continue to do so to go forward in Latin America, said Paul Gong, head of China Auto Research at Swiss bank UBS.
Chinese automakers are also investing in local production. BYD and GWM building factories In Brazil, increasing capacity in the region and potentially creating hundreds, if not thousands, of jobs. But last year Brazilian prosecutors A lawsuit was filed against BYD On allegations of poor working conditions for workers, which the company denies.
Commodity-rich Latin America has limited influence on China
China needs Latin America’s vast natural resources for its hungry industries, from lithium in Brazil to copper in Chile and fishmeal in Peru. However, trade deficits with China are increasing across the region.
For some countries, Guajardo said, “China only sells, not buys.”
Mexico’s deficit with China, its second largest trading partner after the United States, reached $120 billion in 2024; The total of exports, which included raw materials such as copper and its concentrates, electrical and electronic equipment and agricultural goods, amounted to only 9 billion dollars.
Argentina’s trade deficit with China rises to approximately $8.2 billion in 2025; This was triggered by increased imports of items such as electrical machinery and equipment and manufactured goods than exports, including raw materials such as soybeans and meat.
Brazil recorded a trade surplus of approximately $29 billion with China last year, according to official Brazilian data. This is partly due to rising soybean exports after Beijing halted purchases of U.S.-grown soybeans. Chile has a surplus against China thanks to its copper, lithium, fruit and wine exports.
In most cases, China exports mostly processed goods and imports raw materials. But the relationship goes far beyond these basics.
China provided nearly $153 billion in loans and grants to countries in Latin America and the Caribbean in 2014-2023, according to AidData, a research laboratory at William & Mary, a public university in Virginia; this was the largest source of official sector financing in the region. This figure was approximately 50.7 billion dollars provided by the USA.
This means that for every dollar Washington donates or lends, Beijing provides $3.
Latin America is a key pillar of China’s “Global South” strategy to counter Western influence, said Andy Mok, senior research fellow at the Center on China and Globalization.
China financed a $1.3 billion megaport in Chancay, Peru. Opened in 2024 This could eventually be connected to Brazil’s Atlantic coast by a planned railway.
State-backed Chinese companies have also invested heavily in dams, mines and other infrastructure across the region.
“There may be deep concerns about competitiveness, but politically many countries do not think they have the space to resist China’s export growth,” said Meyers, of the Inter-American Dialogue think tank. “The relationship has become very important economically.”
Still some countries oppose Chinese imports
Mexico has long sought to protect local industries. set tariffs Taxes of up to 50% are imposed on imports from China, including automotive products, household appliances and clothing.
Brazil is among countries that are eliminating or phasing out “de minimis” import duty exemptions for overseas packages costing less than $50, partly to target cheap imports from China. It also increases tariffs on EV imports. Other countries may follow suit, as some analysts expect more protectionist measures, including tariffs and stricter regulations, to come from Latin America.
Chile increased customs duties and imposed a 19 percent value-added tax on low-value parcels.
Given China’s growing influence, countries “face a balancing act when it comes to protectionist policies,” said Leland Lazarus, founder of Lazarus Consulting, which focuses on China-Latin American relations.
“They can’t go too far, otherwise China could retaliate in kind,” he said. “So there is a limit to their leverage.”
___
DeBre reported from Buenos Aires, Argentina. Batschke reported from Santiago, Chile. Sánchez reported from Mexico City. AP journalists Didi Tang in Washington, Gabriela Sá Pessoa and Tatiana Pollastri in Sao Paulo, Brazil, and Megan Janetsky in Mexico City also contributed.
