China declared that there will be "the greatest commercial war in economic history." For Latin America, the conflict would be an excellent opportunity
Recently the government administration of Donald Trump announced that at least 800 Chinese products will have a tariff of 25% for a value of 34,000 million dollars to be imported into the United States. For its part, China responded by saying that it will take measures of the same scale, which supposes the beginning of the feared commercial war between the two powers. "The War" implies economic and commercial changes not only for the two participants in the conflict, but also for countries around the world.
According to CNBC, China exports more than $ 2 trillion dollars of products a year, of which only $ 400 to $ 500 trillion goes to the United States. "While the United States is certainly China's largest trading partner, China has many other markets to sell in," as in Latin American countries. Recently, China has implemented a strategy to create links with the countries of the South American continent; an example of this is the Chinese space station that was built in Patagonia, Argentina.
The strategy goes much further: according to data from the Economic Commission for Latin America and the Caribbean (ECLAC), during 2017, China was the country in which exports of Latin America grew the most. The New York Times assures that the growing relationship between China and Latin America "has rescued governments, built huge infrastructure projects, strengthened military ties, and secured immense amounts of resources, thus, it has linked its destiny to that of several countries in the region and vice versa".
China's trade strategy in Latin American countries is a move that the United States had not contemplated, since in the last decade with Obama's government plan all attention was focused on strengthening commercial ties with Asian countries.
This means a great disadvantage for the US, since while the Trump administration has reversed several commercial alliances, damaging the country's economy and its international relations, China has been expanding its commercial ties more and more. At this moment, many believe that for the United States not to be left behind, it is essential that it promotes free trade and economic relations with Latin America.
On the other hand, the trade war between the two powers could open opportunities in Latin America, first due to the exports of some products with which they compete with US producers, and second because of the investments and the expansion that China is having in the region.
Different sectors consider that trade relations with China imply an economic opening that can bring great benefits. "Latin America won the Chinese lottery," said Kevin P. Gallagher, an economist at Boston University. "It helped the region to have its most important accelerated growth since the 1970s." However, there are also those who believe that alliances with the Asian country can create a long-term detrimental dependence, and, in general terms, that a commercial war cannot really benefit anyone.
LatinAmerican Post | María Fernanda Barinas
Translated from “Latinoamérica se ganó la lotería con la guerra comercial entre EE.UU y China”