HONG KONG (AP) — China has been flooding Latin American markets with low-value exports, particularly autos and e-commerce goods, as its exporters adjust to U.S. President Donald Trump’s tariffs and geopolitical moves.
The world’s second-largest economy has become a key trading partner for many Latin American nations, seeking access to their abundant natural resources and growing markets, expanding its influence in what Trump sees as America’s backyard.
Chinese businesses are facing sluggish demand at home. As the country increased production in many industries, they needed new markets for their products. Exports to Latin America, a market of more than 600 million people, and other regions have increased, while exports to the US fell by 20 percent 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. “Those conditions make it one of the easiest places to offload China’s excess industrial production.”
The influx of made-in-China cars, clothing, electronics and home goods has rankled countries looking 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 goods 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 Shen, have accelerated that trend.
“I always use Temu, whether it’s to buy clothes or household items. The same things I get at brand-name stores or shopping malls, I find at Temu at much cheaper prices,” said Lady Mogollon, manager of Chili Restaurant.
Temu averaged 114 million monthly active users in Latin America in the first half of 2025, a 165% year-over-year increase from 2024, market intelligence company Sensor Tower estimates. Shane’s monthly active users in the region grew by 18%.
It’s not just about online shopping.
Made in China T-shirts, jackets, pants, toys, watches and furniture and more fill the stalls of street vendors in downtown Mexico City.
Downtown lamp store manager Angel Ramirez is struggling to compete.
“The Chinese have encroached on us business-wise,” Ramirez said, sitting behind the counter of his completely deserted store.
The number of stores selling Chinese-made goods in downtown Mexico City has tripled in the past few years, Ramirez said, in some cases putting long-established Mexican stores out of business.
Jobs have been lost due to imports
Argentina is bearing the brunt of rising Chinese imports, as local factories close and lay off workers in the manufacturing sector that employs a fifth of its workforce.
The volume of e-commerce imports — mostly from China — rose 237% in October from the same month last year, Argentine government data showed.
“We’re operating at historically low capacity because imports are at record highs,” said Luciano Galfion, president of the nonprofit Pro Tesar Foundation, which represents garment manufacturers. “We are on an indiscriminate attack.”
“The number of Chinese products coming into Argentina, this ultra-fast fashion, is deeply worrying,” said Claudio Drescher, head of the Chamber of Industry and owner of the Buenos Aires-born Jazmin Chaber clothing brand. “It’s an international phenomenon but now it’s starting to take on dramatic significance here.”
A Temu spokesperson said it is giving local businesses in Latin America access to “a low-cost, scalable online channel that was previously out of reach for many of them”, including opening its markets to domestic sellers in Mexico and Brazil in 2025.
Shane said in a statement that the company “respects the importance of local industry and fair competition.” It does not comment on the broader trade policy debate.
Chinese autos enter Brazil and Mexico
Mexico and Brazil – Latin America’s regional auto production hubs – are also under pressure from rising imports of low-priced Chinese cars.
Chinese automakers 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 auto market, were Chinese brands, according to the Brazilian Association of Electric Vehicles.
Mexico has become the largest destination for China’s auto exports, importing 625,187 vehicles last year, surpassing imports from Russia, according to the China Passenger Car Association.
Both Brazil and Mexico already have strong auto industries of their own.
Mexico, as a base for major global manufacturers, is estimated to be the world’s seventh-largest auto producer, although 3.4 million of the nearly 4 million vehicles it made last year were exported. Brazil produced about 2.6 million vehicles, including many EVs and hybrids. That compares to China’s production of 34.5 million vehicles, of which more than 7 million are exported overseas.
In an industry where scale is vital, “China has a comparative advantage in EVs,” with affordable prices and large government support, said Jorge Guajardo, a partner at consultancy DGA Group and Mexico’s former ambassador to China.
Affordable Chinese cars appeal to many drivers and will continue to make inroads into Latin America, said Paul Gong, head of China auto research for Swiss bank UBS.
Chinese car makers 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 labor conditions for workers, which the company denies.
Commodity-rich Latin America has made limited gains in China
From lithium in Brazil to copper in Chile and fish meat in Peru, China needs Latin America’s vast natural resources for its hungry industries. But the trade deficit with China is increasing in the region.
For some nations, “China only sells, not buys,” Guajardo said.
Mexico’s deficit with China, its second-largest trading partner after the US, will reach $120 billion in 2024, with exports of copper and its core raw materials, electrical and electronic equipment, and agricultural goods alone reaching about $9 billion.
Argentina’s trade deficit with China is projected to reach nearly $8.2 billion in 2025, with imports of goods such as electrical machinery and equipment and manufactured goods increasing compared to exports of raw materials such as soybeans and meat.
According to official Brazilian statistics, last year Brazil had trade savings of about 29 billion dollars with China. That’s partly because soybean exports surged after Beijing halted purchases of U.S.-grown soybeans. Chile runs a surplus with China due to exports of copper, lithium, fruit and wine.
In most cases, China mostly exports manufactured goods and imports raw materials. But the relationship goes far beyond those basics.
China provided about $153 billion in loans and grants to countries in Latin America and the Caribbean in 2014-2023 — the region’s largest source of official sector financing — compared with about $50.7 billion provided by the U.S., according to EdData, a research lab at William & Mary Public University in Virginia.
This means that for every dollar that Washington donates or borrows, Beijing provides $3.
Latin America is a pillar of China’s “Global South” strategy to counter Western influence, said Andy Mok, senior research fellow at the Center for China and Globalization.
China financed a $1.3 billion megaport in Chanque, Peru, set to open in 2024 that could eventually be connected to Brazil’s coasts across the Atlantic by a planned railroad.
State-backed Chinese companies have also invested heavily in dams, mines and other infrastructure in the region.
“There may be deep concerns about competition, but politically, many countries don’t feel they have the space to counter China’s export growth,” said Meyers of the Inter-American Dialogue think tank. “The relationship has become very important economically.”
Still, some countries are pushing back against Chinese imports
Mexico has long sought to protect local industries, imposing tariffs of up to 50% on imports from China, including automotive products, appliances and textiles.
Brazil is among the countries to eliminate or phase out “de minimis” import tax exemptions for foreign parcels valued at less than $50 to target cheaper imports from China. It has also raised tariffs on EV imports. Other countries may follow suit, as some analysts expect more protectionist measures, including tariffs and tougher regulations, to come out of Latin America.
Chile has increased tariffs and imposed a 19% value-added tax on low-value parcels.
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 America relations.
“They can’t go too far, or China might retaliate,” he said. “So, their leverage is limited.”
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Dere reported from Buenos Aires, Argentina. Batschke reported from Santiago, Chile. Sanchez reported from Mexico City. Then AP reporters Sabao Paul in Washington, Gabriela Sa Pessoa and Tatiana Polastri in Brazil and Megan Janetsky in Mexico City also contributed.
