HONG KONG (AP) — China has been flooding Latin American markets with low-cost exports, especially cars and e-commerce goods, as its exporters adjust to tariffs and the geopolitical moves of U.S. President Donald Trump.
The world’s second-largest economy has become a key trading partner for many Latin American nations, which are seeking access to their abundant natural resources and growing markets while expanding its influence in a region that Trump views as America’s Byard.
Chinese businesses face slow demand at home. They need new markets for their products as the country increases production in many industries. Exports to Latin America, a market of more than 600 million people, and other regions rose while exports to the United States 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. “These conditions make it one of the easiest places for China to unload its excess industrial production.”
The influx of cars, clothes, electronics and home furnishings made in China has sparked 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.
Cheap e-commerce products gain market share
Cheap goods from China are welcome news for many Latin American consumers, but they are a headache for local businesses.
Chinese e-commerce platforms, led by Temu and Shein, accelerated that trend.
“I use Temu all the time, whether I buy clothes or household items. The same things I used to find in brand name stores or shopping malls, I find on Temu at a much lower price,” said Chilean restaurant manager Lady Mogollon.
Temu had an average of 114 million monthly active users in Latin America in the first half of 2025, an increase of 165% year on year from 2024, estimates the market intelligence company Sensor Tower. Shein’s monthly active users in the region grew 18%.
It’s not just online shopping.
T-shirts, jackets, pants, toys, watches and furniture and more products made in China fill the stalls of street vendors in downtown Mexico City.
Ángel Ramírez, manager of a lamp shop in the city center, is struggling to compete.
“The Chinese invaded us in terms of goods,” said Ramírez, sitting behind the counter of his completely abandoned store.
Over the past few years the number of stores selling Chinese-made goods in downtown Mexico City has more than tripled, Ramírez said, in some cases putting long-established Mexican stores out of business.
Jobs are being lost to imports
Argentina is bearing much of the brunt of the surge in Chinese imports, as local factories close and lay off workers in a manufacturing sector that employs nearly a fifth of its workforce.
The volume of e-commerce imports – mostly from China – increased by 237% in October from the same month a year earlier, Argentine government statistics show.
“We are operating at historically low capacity as imports break records,” said Luciano Galfione, president of the non-profit Pro Tejer Foundation, which represents textile manufacturers. “We are under indiscriminate attack.”
“The number of Chinese products arriving in Argentina, this ultra-fast fashion, is very worrying,” said Claudio Drescher, head of the chamber of industry and owner of the clothing brand Jazmín Chebar born in Buenos Aires. “It’s an international phenomenon but now it’s really starting to have dramatic importance here.”
A Temu spokesman said it is giving local Latin American businesses “access to a low-cost and scalable online channel previously out of reach for many of them”, including opening its market 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.” It does not comment on wider trade policy debates.
Chinese autos make inroads in Brazil and Mexico
Mexico and Brazil — regional hubs of Latin American auto manufacturing — are also under pressure from increasing imports of low-priced Chinese cars.
Chinese car manufacturers such as BYD and GWM see huge growth opportunities in Latin America. More than 80% of the 61,615 EVs sold in 2024 in Brazil, the world’s sixth-largest car market, were Chinese brands, according to the Brazilian Electric Vehicle Association.
Mexico has become the largest destination for Chinese car exports, importing 625,187 vehicles last year, according to the China Passenger Car Association, surpassing Russia’s imports.
Both Brazil and Mexico already have their own robust automotive industries.
Mexico, as a base for major global manufacturers, is estimated to be the seventh largest car producer in the world, although about 3.4 million of the nearly 4 million vehicles it made last year were exported. Brazil turned out about 2.6 million vehicles, including many EVs and hybrids. That compared to China’s production of 34.5 million vehicles, including more than 7 million exported abroad.
In an industry where scale is vital, “China has a comparative advantage on EVs,” with affordable prices and massive government support, 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 make inroads in Latin America, said Paul Gong, head of China Autos Research for Swiss bank UBS.
Chinese automakers are also investing in local production. BYD and GWM are building factories in Brazil to expand capacity in the region, potentially creating hundreds if not thousands of jobs. Last year, however, Brazilian prosecutors sued BYD over allegations of poor working conditions for workers, which the company has denied.
Commodity-rich Latin America has limited leverage over 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. But trade deficits with China are growing across the region.
For some nations, “China only sells, they don’t buy,” Guajardo said.
Mexico’s deficit with China, its second largest trading partner after the United States, reached $120 billion in 2024, with exports of those including raw materials such as copper and its concentrates, electrical and electronic equipment and agricultural products amounting to only about $9 billion.
Argentina’s trade deficit with China has increased to almost $8.2 billion in 2025, fueled by imports of more goods such as machinery and electrical equipment and manufactured goods from its exports including raw materials such as soybeans and meat.
Brazil recorded a trade surplus of about $29 billion with China last year, according to official Brazilian data. This is partly due to the increase in soybean exports after Beijing stopped its purchases of soybeans grown in the United States. Chile has a favorable balance with China thanks to its exports of copper, lithium, fruit and wine.
In most cases, China exports mostly manufactured goods and imports raw materials. But the relationship goes far beyond the basics.
China provided loans and grants to countries in Latin America and the Caribbean in 2014-2023 worth about $153 billion — the largest source of official sector financing for the region — compared to about $50.7 billion that the United States provided, according to AidData, a research lab at William & Mary, a public university in Virginia.
This means for every dollar given or borrowed by Washington, Beijing provides $3.
Latin America is a pillar of China’s “Global South” strategy to counter Western influence, said Andy Mok, a senior research fellow at the Center for China and Globalization.
China has funded a $1.3 billion megaport in Peru’s Chancay, opening in 2024 that could eventually connect via a planned railway to Brazil’s Atlantic coast.
State-backed Chinese companies have also made major investments in dams, mines and other infrastructure across the region.
“There may be great concerns about competitiveness, but politically, many countries do not feel they have the space to resist China’s export increase,” said Meyers from the Inter-American Dialogue think tank. “The relationship has become too important economically.”
Still, some countries are pushing back against Chinese imports
Mexico has sought to protect local industries, imposing tariffs of up to 50% on imports from China, including automotive products, appliances and clothing.
Brazil is among the countries to eliminate or phase out “de minimis” import tax exemptions for foreign packages worth less than $50, in part to target cheaper imports from China. It is also increasing tariffs on EV imports. Other countries may follow suit, as some analysts expect more protectionist measures including tougher tariffs and regulations to come out of Latin America.
Chile raised tariffs and imposed a value added tax of 19% on low value packages.
Given China’s growing leverage, however, 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, or China might retaliate in kind,” he said. “So, their leverage has a limit.”
___
Dere Reported From Buenos Aires, Argentina. Batschke Reported from Santiago, Chile. Sánchez Reported From Mexico City. AP reporters then tang in Washington, Gabriela Sá Pessoa and Tatiana Pollastri in Sabao Paul, Brazil and Megan Janetsky in Mexico City also contributed.
