The Quiet Collapse: How Trump’s U.S. Is Driving Latin America Into the Arms of Its Rivals
President Trump showing a chart with reciprocal tariffs. Image credit: The White House via Flickr
In April 2025, the Trump administration launched its so-called “Liberation Day” tariffs, which were blanket levies of 10% to 50% on imports from dozens of countries, including major Latin American economies such as Brazil and Colombia. Simultaneously, a 60% tariff on Chinese goods was approved, which has ripple effects across Latin America’s own China-linked supply chains.
Branded as a move for “economic security”, this sharp return to economic nationalism has sent shock waves across a region still reeling from post-COVID-19 disruptions and the 2023 commodity downturn. For many, this message is familiar: Washington is putting itself first and everyone else last.
But this time, Latin America isn’t reacting with protest. It’s quietly realigning.
Trade flows are shifting. Diplomatic partnerships are evolving. Mexico has fired back with retaliatory tariffs. Brazil accelerated talks with China and the EU. Colombia and Argentina, which have long balanced relations between Washington and Beijing, are now leaning toward autonomy. The Trump White House may not tolerate neutrality, but the region is choosing independence.
Old Tactics, New Failures.
Trump’s second-term foreign policy is nothing if not predictable: isolate, sanction, and expect compliance. Chevron’s license was revoked in Venezuela, reinstating full oil sanctions and severing one of the last ties between Caracas and Washington. The result? Venezuela strengthened its ties with Russia and Iran, deepening cooperation in security, energy, and digital surveillance.
Meanwhile, Cuba was hit with new visa bans targeting officials involved in its overseas medical missions. Havana rejected the charges as cynical and accused the U.S. of trying to collapse its health diplomacy model.
These measures haven’t dismantled authoritarian networks. They’ve entrenched them. Sanctions have become accelerants, not leverage.
President Gustavo Petro of Colombia at an agreement signing ceremony in Beijing, People's Republic of China. Image Credit: República de Colombia via Flickr
The China Alternative
As the U.S. leans on punitive tools, China is playing a different game.
In 2024, trade between China and Latin America reached a record US$518.4 billion, marking a 6% year-on-year increase and doubling the volume from a decade earlier. Beijing’s economic diplomacy has grown more sophisticated, shifting away from hard power to focus on cultural and commercial bridges. Visa-free entry was granted to citizens of Argentina, Brazil, Chile, Peru, and Uruguay starting June 2025. Scholarships, media exchanges, and cultural forums followed.
In May 2025, Colombia officially joined the Belt and Road Initiative (BRI). President Gustavo Petro framed it as a move toward investment in infrastructure and technology, unshackled from the political conditions Washington often imposes.
Despite declaring that he wouldn't work with communists, Argentine President Javier Milei has continued to pursue lithium and rail deals with China. Economic pragmatism has overridden ideological posturing.
To be clear: Latin America isn’t racing toward authoritarianism. It’s racing toward whoever offers cash, credit, and calm. China’s strategy offers Latin American countries economic partnership without political conditions. As a result, nations in the region are increasingly turning to Beijing for investment and cooperation.
This shift has significant implications for U.S. strategic interests. As Latin American nations deepen ties with Beijing, it undermines Washington’s long standing ambitions under the neo-Monroe Doctrine, to maintain hemispheric influence, and complicates its broader efforts to contain China's global rise. In the pursuit of autonomy and development, Latin America may prove to be the unlikely front where the international balance of power quietly tilts eastward.
The President of Argentina, Javier Milei, together with the President of the People's Republic of China, Xi Jinping. Image Credit: Gobierno argentino via Wikimedia Commons
Losing the Narrative
Beyond sanctions and tariffs, the U.S. faces a far more dangerous erosion: credibility.
Gone is the moral authority Washington once wielded. Biden-era outreach is dismantled. Development funds have stalled. Climate cooperation is an afterthought. And rhetorical missteps abound. When Republicans in Congress threatened Brazil's Supreme Court justices over ideological disagreements, President Lula rebuked the move as unacceptable interference, a rare public reprimand from a democratic ally.
The U.S. talks about democracy, but its actions often undermine it. It offers punishment, not partnership. No long-term investment plans. No compelling vision. Just recycled slogans wrapped in coercive policy.
And so, the region looks elsewhere.
Presidenta Claudia Sheinbaum at the Hilton Hotel in Mexico City. Image Credit: J.O. Cano via Flickr
A Hemispheric Reordering
Once Washington’s “backyard,” Latin America is now a geopolitical arena, and the U.S. is losing not through conflict, but through complacency. China, the EU, and even Russia are engaging with energy, infrastructure, and investment while Washington offers little beyond ultimatums.
Countries across the region are pursuing strategic autonomy, choosing partnerships based on mutual interest rather than ideological alignment. Presidents Lula, Petro and Sheinbaum aren’t choosing China over the U.S., they’re choosing both. This is not anti-U.S. sentiment; it is post-U.S. strategy.
The old binary, you’re either with us or against us, no longer holds. Latin America is writing its own script, negotiating on its own terms, and no longer waiting for U.S. approval or IMF conditionalities. The new reality? Leverage trumps loyalty.
You Can’t Tariff Loyalty
Trump’s second-term strategy confirms what many in the region long suspected: the U.S. doesn’t want partners, it wants pawns. But pawns move too.
The sanctions? They’re consolidating authoritarian ties with Moscow and Tehran. The tariffs? They’re pushing democracies like Brazil and Mexico toward alternative trade blocs, such as BRICS+ and the EU. The rhetoric? It’s burning bridges that may never be rebuilt.
And what does the U.S. get? Alienation. Irrelevance. A seat at a table where fewer leaders are listening.
This isn’t an uprising. It’s a rebalancing. Latin America is no longer the U.S. to “lose,” it’s already moving on.
Brazilian President Luiz Inácio Lula da Silva meets with the Prime Minister of Australia, Anthony Albanese. This is the first bilateral meeting he holds while participating, as a guest, in the G7 Summit. Image Credit: Ricardo Stuckert via Flickr
Australia’s moment
As Latin America reconfigures its external relationships, one country remains largely overlooked in the scramble for new partners: Australia.
Despite strong complementarities, clean energy, critical minerals, agri-tech, and education, Australia has yet to make a serious push into the region. As the U.S. fumbles, China invests, and Europe hesitates, Australia has a rare opportunity to engage Latin America on fresh terms: partnership, not patronage.
The question is no longer if Latin America is moving beyond the U.S. It’s who is ready to meet it there.
BIO: Mikayla Weber is a fourth-year Law and International Relations student at the Australian National University (ANU) with a strong interest in Latin America, global diplomacy, and human rights. She is studying Spanish and is actively involved with the Latin American Students Association at both the University of Canberra and ANU.
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The views expressed in this article are those of the author and do not necessarily represent the views or opinions of the Australia Latam Emerging Leaders Dialogue.