Latin America

Tariffs Won’t Stop Chinese Influence in Latin America


Senator Rick Scott’s (R-FL) June 11, 2019, op-ed claims that China’s growing influence in Latin America represents a threat to the American way of life and highlights the growing presence of Chinese firms, Beijing’s financial and political support for the Maduro Regime in Venezuela, and the expansion of Chinese financial agreements as problems for the United States. He goes on to suggest that this is a geopolitical challenge that the United States must win. While the United States should seek to maintain its influence in Latin America, Senator Scott’s assessment of the situation and his policy proposal—continued tariffs on China—misdiagnose how the United States can influence the region and propose a dangerous prescription to the problem.

The Confucius Institute in the Chinese district. Havana, Cuba.
Image courtesy of RG72 © 2017

As this author has argued on multiple occasions, the United States and Latin American nations need to pay real attention to and develop better policies to address growing Chinese influence in the Western Hemisphere. The Trump administration’s rhetoric and efforts to cut foreign aid only increase China’s regional appeal. Likewise, rather than helping the situation, tariffs may actually increase Chinese influence in the Americas. Tariffs would limit Chinese exports to the United States but not to Latin America. In fact, U.S. tariffs would cause Chinese companies to actively seek alternative nations to sell their goods. Furthermore, with Chinese retaliatory tariffs against the United States, Latin American companies that compete with U.S. companies in China are likely to expand their market share in China. Tariffs won’t help at home either; tariffs are unlikely to create the manufacturing jobs Senator Scott believes they would, and even if they did, these goods are unlikely to be able to compete with China in Latin America if they already face challenges in competing within the United States.

In order to effectively limit Chinese influence in the Americas, Senator Scott should support policies that revive and promote U.S. engagement in Latin America, such as what Admiral Craig Faller, the head of U.S. Southern Command, proposed in testimony to the Senate Armed Services Committee two days before Senator Scott’s op-ed. Admiral Faller emphasized the need for high-level professional exchanges, particularly between high ranking military officials, that allow the United States to influence Latin America by highlighting the advantages of U.S. thinking vis-à-vis closed societies like that of China. Expanded lower level exchanges between individuals, students, and companies can further integrate the peoples of the Americas and generate goodwill that can increase the soft power of the United States in the future. For example, certain Obama-era policies, such as the 100,000 Strong in the Americas student exchange initiative, could be expanded to counter Chinese influence.

The United States should also increase foreign aid and finance to Latin America. With the Trump administration cutting aid to the region, it should come as little surprise that Latin American nations have sought alternative purveyors of aid and finance. Quantitative studies have shown that Chinese financial support has been greatest in countries where U.S. foreign aid has been lowest. This suggests two different possibilities. Either China is actively seeking to reduce U.S. influence in the region, or Latin American countries are seeking financial support from any source possible and believe China is the most readily available source. This is particularly crucial given that U.S. foreign aid is more beneficial to recipient countries than Chinese “aid.” The United States and European nations often condition aid on environmental regulations and good governance provisions, creating positive spillovers that can benefit recipient country development in the long term. Some countries may view these stipulations as costly in the short term and Chinese financial support often lacks these conditions. However, China instead ties its foreign aid and financing to the use of Chinese labor and goods. This limits the developmental impact of Chinese aid. If the United States is going to compete with Chinese financial influence in the Americas, the nation needs to provide aid and financial support across the Americas and make the benefits of U.S. foreign aid clear to Latin American states.

Senator Scott should not use Chinese influence in the Americas as the basis for promoting tariffs against China. U.S. efforts to compete with China in the Americas should be undertaken through policies that promote Pan-American values and goodwill in the Americas. The United States has much to offer the hemisphere, but protectionism and strong-arm policies will not improve relations between the nations of the Americas.

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