HONG KONG (AP) — China has flooded Latin American markets with low-priced exports, particularly cars and e-commerce goods, as its exporters adjust to tariffs and geopolitical moves by U.S. President Donald Trump.
The world’s second-largest economy has become an important trading partner for many Latin American nations, seeking access to their abundant natural resources and growing markets while expanding their influence in a region that Trump considers America’s backyard.
Chinese businesses are facing sluggish demand at home. They need new markets for their products as the country increases production in many industries. Exports to Latin America, a market of more than 600 million people, and other regions rose, while exports to the US fell 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. “These conditions make China one of the easiest places to offload its excess industrial production.”
The influx of Chinese-made cars, clothing, electronics and home furnishings has unsettled countries trying 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 are gaining market share
Cheap goods from China are welcome news to many Latin American consumers, but a headache for local businesses.
Chinese e-commerce platforms led by Temu and Shein have accelerated this trend.
“I use Temu all the time, whether it’s to buy clothes or household items. The same things that I would find in branded stores or malls, I find on Temu at a much lower price,” said Chilean restaurant manager Lady Mogollon.
Temu averaged 114 million monthly active users in Latin America in the first half of 2025, up 165% from 2024, market intelligence company Sensor Tower estimates. Monthly active users of Shein in the region increased by 18%.
It’s not just about online shopping.
T-shirts, jackets, pants, toys, watches and furniture and more products made in China fill the stalls of street vendors in downtown Mexico City.
Ángel Ramírez, manager of a downtown lamp store, struggles to compete.
“The Chinese have invaded us in terms of goods,” said Ramírez, standing behind the counter of his completely deserted store.
In the past few years, the number of stores selling Chinese-made goods in downtown Mexico City has more than tripled, Ramírez said, in some cases putting long-standing Mexican stores out of business.
Jobs are being lost due to imports
Argentina is bearing the brunt of rising imports from China as local factories close and lay off workers in a manufacturing sector that employs nearly a fifth of the workforce.
The volume of e-commerce imports — mainly from China — rose 237 percent in October from the same month last year, Argentine government statistics show.
“We are operating at historically low capacity because imports are exceeding record levels,” said Luciano Galfione, president of the nonprofit foundation Pro Tejer, which represents textile manufacturers. “We are under indiscriminate attack.”
“The number of Chinese products arriving in Argentina, this ultra-fast fashion, is deeply worrying,” said Claudio Drescher, head of the chamber of industry and owner of Buenos Aires-born clothing brand Jazmín Chebar. “It’s an international phenomenon, but now it’s really starting to have dramatic importance here.”
A spokesperson for Temu said it gave local Latin American businesses “access to a low-cost, scalable online channel that was previously out of reach for many of them,” including opening its marketplace to domestic sellers in Mexico and Brazil in 2025.
Shein said in a statement that the company “respects the importance of local industries and fair competition.” He would not comment on the broader trade policy debate.
Chinese cars are making inroads into Brazil and Mexico
Mexico and Brazil — the regional hubs of Latin American auto production — are also under pressure from growing imports of low-priced Chinese cars.
Chinese automakers such as BYD and GWM see huge growth opportunities in Latin America. More than 80 percent of the 61,615 electric vehicles sold in 2024 in Brazil, the world’s sixth-largest auto market, were Chinese brands, according to the Brazilian Electric Vehicle Association.
Mexico has become the largest destination for China’s auto exports, importing 625,187 vehicles last year, according to the China Automobile Association, surpassing Russian imports.
Both Brazil and Mexico already have their own robust auto industries.
Mexico, a home base for major global manufacturers, is estimated to be the world’s seventh-largest auto producer, although about 3.4 million of the nearly 4 million vehicles produced last year were exported. Brazil produced about 2.6 million vehicles, including many electric vehicles and hybrids. This compared to China’s production of 34.5 million vehicles, including more than 7 million exported abroad.
In an industry where scale is vital, “China has a comparative advantage in electric vehicles,” with affordable prices and massive government support, said Jorge Guajardo, a partner at consulting firm DGA Group and a former Mexican ambassador to China.
Affordable Chinese cars are attracting many drivers and will continue to make inroads in Latin America, said Paul Gong, head of China Autos Research for Swiss bank UBS.
Chinese automakers 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. However, last year Brazilian prosecutors sued BYD over allegations of poor working conditions for workers, which the company has denied.
Commodity-rich Latin America has limited influence over China
China needs Latin America’s vast natural resources for its hungry industries, from lithium in Brazil to copper in Chile and fishmeal in Peru. But trade deficits with China are growing across the region.
For some nations, “China is only selling, not buying,” Guajardo said.
Mexico’s deficit with China, its second-largest trading partner after the US, reached $120 billion in 2024, with exports including raw materials such as copper and its concentrates, electrical and electronic equipment and agricultural goods totaling only about $9 billion.
Argentina’s trade deficit with China has grown to nearly $8.2 billion in 2025, fueled by imports of more items such as machinery and electrical equipment and manufactured goods than its exports, including raw materials such as soybeans and meat.
Brazil posted a trade surplus of about $29 billion with China last year, according to official Brazilian data. This is partly due to increased soybean exports after Beijing cut off purchases of US-grown soybeans. Chile runs a surplus with China thanks to its 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 these basics.
China provided about $153 billion in loans and grants to Latin American and Caribbean countries in 2014-2023 — the region’s largest source of official financing — compared with about $50.7 billion that the U.S. provided, according to AidData, a research lab at William & Mary, a public university in Virginia.
That means that for every dollar donated or lent by Washington, Beijing gives $3.
Latin America is a pillar of China’s “Global South” strategy to counter Western influence, said Andy Mok, a senior fellow at the Center for China and Globalization.
China has financed a $1.3 billion megaport in Peru’s Chancay, set to open in 2024, which could eventually be linked by a planned railway to Brazil’s Atlantic coast.
State-backed Chinese companies have also made massive investments in dams, mines and other infrastructure in the region.
“There may be a deep concern about competitiveness, but politically many countries don’t feel they have the room to resist China’s export growth,” said Meyers of the Inter-American Dialogue think tank. “The relationship has become too important economically.”
However, some countries oppose imports from China
Mexico has long sought to protect local industries by imposing tariffs of up to 50 percent on Chinese imports, including autos, appliances and clothing.
Brazil is among countries eliminating or phasing out “de minimis” import duty exemptions for overseas parcels costing less than $50, in part to target cheap imports from China. It also raises tariffs on electric vehicle imports. Other countries could follow suit, as some analysts expect more protectionist measures, including tariffs and stiffer regulations from Latin America.
Chile increased tariffs and imposed a 19% value-added tax on low-value packages.
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 in kind,” he said. “So their leverage has a limit.”
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Dere reported from Buenos Aires, Argentina. Batschke Reported from Santiago, Chile. Sánchez reported from Mexico City. AP Washington reporters Gabriela Sá Pessoa and Tatiana Pollastri in Sabao Paul, Brazil, and Megan Janetsky in Mexico City also contributed.
