In an effort to counterbalance tensions created by the ongoing U.S.-China trade conflict, China is fortifying its alliances with international partners. This includes presenting a united front alongside Latin American leaders shortly after reaching a temporary agreement with the U.S. to pause their tariff disputes for 90 days. Chinaโs leadership continues to position the nation as a dependable trade and development ally, contrasting with the uncertain outcomes stemming from U.S. tariff increases and other policies under former President Donald Trump.
On Monday, both Beijing and Washington disclosed their progress on resolving tariff issues following discussions in Geneva, Switzerland over the weekend. They decided to ease steep import duties for three months to open a window for further negotiations. Despite this, Chinaโs displeasure regarding the trade war remains evident. In an address to officials from both China and Latin America, President Xi Jinping emphasized that trade conflicts yield no winners, labeling protectionist measures as self-isolating.
Following the de-escalation of tensions with the U.S., Xi declared Chinaโs willingness to collaborate with Latin American countries amid persistent global political and trade challenges. Stressing that no party benefits from imposed tariffs, Xi repeated a familiar message criticizing Trumpโs policies. In response to U.S. tariff hikes initiated during Trumpโs first term, China broadened its agricultural product procurements, shifting some focus away from U.S. sources. This move has benefited countries like Brazil and other Latin American nations.
In related developments, the leader of the World Trade Organization (WTO) sought Japanโs support in countering the disruptions caused by U.S. tariffs and rapidly changing trade policies. During her Tokyo visit, WTO Director-General Ngozi Okonjo-Iweala urged Japan to uphold, reinforce, and reform the multilateral trading system by working with the WTO, as cited by Japanโs Foreign Ministry. Japan has yet to settle tariff issues with the U.S., including those on automobiles, steel, and aluminum.
Historical context reveals the WTOโs significant role in promoting freer markets and the expansion of global supply networks, with China serving as a key manufacturing hub. Contrary to previous efforts to dismantle protectionist trade barriers, Trumpโs administration embraced higher tariffs as a strategy to reduce U.S. imports and encourage domestic manufacturing.
The initial optimism surrounding the U.S.-China truce failed to sustain investor confidence, as stock and oil rallies waned by Tuesday. At a forum with the Community of Latin American and Caribbean States (CELAC), Xi announced initiatives to fortify ties with the region via political, economic, academic, and security collaborations. He pledged to increase imports, motivate Chinese investments, and foster cooperation in clean energy, 5G telecommunications, and artificial intelligence. Additionally, he revealed a new 66 billion yuan ($9.2 billion) credit line to support Latin American and Caribbean financing.
Chinaโs trade value with Latin America surpassed $500 billion last year, with its imports of agricultural products, energy resources, and essential minerals steadily rising. Investments in the region, spearheaded by the Belt and Road Initiative, encompass the development of 5G networks and infrastructure such as ports and hydropower plants. Colombiaโs announcement to formally join the BRI exemplifies growing Latin American confidence despite challenges to prior Chinese projects.
In further commitments, China plans to invite 300 Latin American political figures to China annually over the next three years, offer 3,500 government scholarships, and facilitate other exchanges. Moreover, five Latin American countries will soon enjoy visa-free travel to China, with more countries expected to follow suit, although the specific nations were not immediately disclosed.