Biden and the U.S.-China-Latin America Triangle

</p> <p>But foreign policy experts do not expect any major changes toward China, believing that Mr. Biden will maintain outgoing President Donald Trump’s hardline policy toward the Asian giant.</p> <p>“The principle that China is a strategic rival to the U.S. has bipartisan support, and this also includes the role of China in Latin America,” said Bruno Binetti, an analyst with Washington-based think tank The Dialogue. “What might change, as in all foreign policy, is the instruments rather than the goals or the understanding of the problem.”&nbsp;</p> <p>Under the Trump administration, the U.S. ignited a trade war by imposing tariffs on more than USD 550 billion worth of Chinese products. It proceeded to threaten governments that aligned with Beijing and launched its own plans to compete with Chinese investment through President Xi Jinping’s signature Belt and Road Initiative (BRI).</p> <p>Hostility towards <a href="https://brazilian.report/power/2020/11/11/bolsonaro-tantrums-a-known-but-effective-diversionary-tactic/">Chinese engagement</a> in Latin America and around the world underpinned U.S. foreign policy under Mr. Trump ever since he took office in January 2017. These long-standing concerns have been echoed by Mr. Biden and the Democratic Party platform.</p> <p>&#8220;Democrats will be clear, strong, and consistent in pushing back where we have profound economic, security, and human rights concerns about the actions of China&#8217;s government,&#8221; read the 2020 party platform.&nbsp;</p> <p>Throughout the campaign, both the president-elect and Mr. Trump stated their intentions to play hardball with Beijing.&nbsp;</p> <iframe src="https://open.spotify.com/embed-podcast/episode/3ulkklC6bRRy1yXQvDqUjH" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Chinese influence in Latin America</h2> <p>After years of rapid economic growth and a surplus of capital, China became the largest development lender in <a href="https://brazilian.report/latin-america/2020/12/01/argentina-brazil-try-to-amend-fractured-relationship/">Latin America</a>. While in the past few years financial flows have been reoriented towards more investment at the company level, China had already gained a foothold by financing several infrastructure projects. Along the way, it became the leading trading partner to Chile, Brazil, Peru, and Uruguay, challenging the U.S.&#8217; historic presence in the region.&nbsp;&nbsp;</p> <p>“China has sought markets and investment opportunities to extend financial debt and loans that can then fund Chinese <a href="https://brazilian.report/podcast/2019/04/24/brazil-deal-china-relations/">infrastructure projects</a> in regions such as Latin America,” said Aaron Schneider, a professor of International Studies at the University of Denver. “It has meant billions in Chinese investment, loans, and increased trade between China and Latin America.”&nbsp;&nbsp;</p> <p>In the last decade, the U.S. has sought to curb Chinese influence in the region through a series of programs, threats, and foreign policy maneuvers. Former U.S. President Barack Obama launched the Trans-Pacific Partnership (<a href="https://valor.globo.com/mundo/noticia/2020/12/09/presidente-da-coreia-do-sul-considera-adeso-ao-tpp-e-aproximao-com-amrica-latina.ghtml">TPP</a>) in 2015, an initiative that sought to liberalize trade between 12 Pacific rim countries and challenge increased Chinese influence. But the TPP was scrapped by the Trump administration in 2017.&nbsp;</p> <p>In the meantime, China pushed ahead with its own proposal. In November of this year, 15 countries from the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (<a href="https://thediplomat.com/2020/12/rcep-the-future-of-trade-in-asia/">RCEP</a>), forming the world’s largest trade bloc in terms of combined GDP. The signing came as the result of eight years of negotiations and marked “a victory of multilateralism and free trade,” according to Chinese Premier Li Keqiang. Critics — including Mr. Obama himself — said that a China-led bloc threatened to lower environmental standards in trade.&nbsp;&nbsp;</p> <iframe src="https://open.spotify.com/embed-podcast/episode/3abhAzs9KwPJTAcRlufBzT" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <p>In terms of bilateral relations, the Trump administration has pressured governments across Latin America to eschew Beijing’s overtures. In 2018, Republicans in Congress threatened to remove El Salvador from an Obama-era Central American development plan — the Alliance for Prosperity — after it accepted an unconditional USD 150 million ‘gift’ from China for infrastructure projects.</p> <p>Under Mr. Trump, the U.S. has also used its leverage to challenge Chinese tech firms in Latin America. In June 2020, President Trump began talks with Brazil&#8217;s President Jair Bolsonaro to fund the purchase of <a href="https://brazilian.report/newsletters/brazil-daily/2020/11/24/5g-could-brazil-jair-bolsonaro-flip-flop-on-huawei/">5G technology</a> from European telecom companies Nokia and Ericsson — rather than Chinese firm Huawei, which had already installed a 4G system in the country. Any such project would require the complete reinstallation of telecommunication technology, according to Mr. Schneider.&nbsp;</p> <p>He believes Mr. Biden will continue with the same <a href="https://brazilian.report/power/2020/11/22/after-donald-trump-loss-bolsonaro-sidles-up-to-putin/">strategy</a> of pressure. “Joe Biden might be a bit more diplomatic, and the State Department might be a little less strong-armed in its tactics, but that basic conflict remains.”</p> <h2>The Trade War</h2> <p>Donald Trump believed that by increasing tariffs on Chinese imports, the trade deficit between the two nations would shrink and manufacturing jobs would return to the U.S.</p> <p>However, U.S. economic growth faltered, business investment froze, and companies did not hire as many staff as expected. Across the nation, farmers went bankrupt and the manufacturing and freight transportation sectors hit lows not seen since the last recession. Mr. Trump’s actions amounted to one of the largest tax increases in years, according to Heather Long of The Washington Post.</p> <p>Some Latin American countries benefited from the <a href="https://brazilian.report/power/2020/11/07/what-to-expect-for-us-brazil-relations-with-a-biden-white-house/">trade war</a>, notably Brazil and Argentina, which <a href="https://brazilian.report/business/2020/08/03/trade-pandemic-makes-brazil-even-more-reliant-on-china/">increased exports</a> of agricultural products to China in the wake of the Asian giant importing less soy from the U.S.&nbsp;</p> <p>Mexico was dubbed by some as ‘the winner of the trade war’, as Chinese and American manufacturing companies relocated to northern Mexico to circumvent tariffs and facilitate access to the U.S. market.</p> <p>However, economic experts such as Otaviano Canuto, principal of the Center for Macroeconomics and Development, argue that any short-term wins for Latin America were only temporary and will be outweighed by the long-term negative impacts of the trade war.</p> <p>“My guess is that Mr. Biden will try to de-escalate the trade war, but it won’t happen suddenly,” Mr. Binetti said. “There are business investment decisions that have been made based on those tariffs. I don’t see those tariffs disappearing from one day to the next — it would be costly for Mr. Biden.”</p> <p>According to Mr. Binetti, the Biden administration will likely try to contain China by way of multilateral forums.</p> <h2>A shift in tactics?</h2> <p>After dishing out slaps on the wrists to the ambassadors of Panama, El Salvador, and the Dominican Republic for shifting their countries’ diplomatic allegiances from Taiwan to China, the U.S. realized it needed to offer an alternative to Chinese investment.&nbsp;</p> <p>This shift was demonstrated in December 2019, as the Trump administration launched the “Growth in the Americas” initiative, or America Crece, in conjunction with the U.S. Chamber of Commerce. The program seeks to provide billions of dollars of government-subsidized investment to U.S. companies for <a href="https://brazilian.report/business/2017/10/17/china-influence-brazils-economy/">key infrastructure projects</a> across the hemisphere, to rival Belt and Road investment in highways, ports, and energy projects in Latin America.</p> <p>One of the key architects of the initiative was Mauricio Claver-Carone, the new head of the Inter-American Development Bank and a close ally of Mr. Trump.&nbsp;</p> <p>These efforts are likely to be continued by the administration of President-elect Biden, suggests Mr. Binetti, as despite being less well-known than the Belt and Road Initiative, America Crece has broad cross-party support in the U.S. Mr. Biden himself has called for USD 4 billion to be invested through private-public partnerships in Central America to catalyze growth and reduce poverty.&nbsp;</p> <p>“The architecture of the way in which [money] will be delivered will look much like the way it did under the Obama administration and the Trump administration&#8217;s America Créce initiative,” Mr. Schneider said.</p> <hr class="wp-block-separator"/> <p class="has-text-align-center"><em>This article was originally published by <a href="http://dialogochino.net">Dialogo Chino</a> and republished under the Creative Commons license</em>.</p> <p>