Washington’s Flawed Policy Toward Latin America

Washington has elevated the Western Hemisphere in its strategic vocabulary. The Trump administration’s 2025 National Security Strategy prioritizes the region and calls for a “Trump Corollary” to the Monroe Doctrine. In March, Defense Secretary Pete Hegseth gave the approach a blunter name: the “Donroe Doctrine”. The developments do not mark necessarily an American return to a region it had left, but it signals that Washington, still the hemisphere’s preeminent power, no longer intends to take its inherited advantages for granted as China competes for influence.

Beijing does not need to displace the United States from the Western Hemisphere. Two decades of Chinese trade, investment, finance, infrastructure, and diplomacy have made its presence substantial enough to constrain any strategy built on restoring exclusive American predominance. The relevant test is whether Washington can distinguish genuine security risks from ordinary commercial competition and combine targeted safeguards with an economic offer that addresses Latin American priorities. Critical-mineral value chains and digital infrastructure provide two places to start.

Peru’s port of Chancay captures both sides of the challenge. Inaugurated in November 2024 after an initial Chinese investment of about $1.3 billion, the terminal is controlled by COSCO Shipping Ports, part of the eponymous Chinese state-owned group. It can handle the Pacific coast’s largest vessels and create a more direct corridor to Asia for South American metals, agricultural goods, and other commodities. For Peru, that means lower logistics costs, jobs, and a plausible bid to become a regional hub. For Washington, the concern is not that those gains are illusory. It is that a Chinese state-owned operator controls a data-rich logistics node that can redirect trade and may acquire dual-use value. US officials have warned about Chancay’s possible intelligence or military uses, concerns sharpened by recent claims that COSCO vessels collected signals intelligence for Beijing. China denied the allegations.

Sectors of Interest

Trade establishes the scale of the relationship, but its composition is more revealing. China accounted for 13% of Latin American and Caribbean exports and 22% of imports in 2024. Raw materials dominate the region’s sales to China, with unrefined copper ores gaining ground while refined copper products lose share. At the same time, Chinese outbound investment is moving toward sectors that will shape the next economic cycle. Between 2020 and 2024, compared with the previous five years, investment in minerals used for clean-energy technologies more than doubled, while wind and solar investment grew by more than half. Most Chinese automotive investment supported electric-vehicle production.

This pattern gives the critical-minerals relationship an extractive bias, but that outcome is not inevitable. Latin America produces about 40% of the world’s mined copper and roughly one-quarter of its lithium. Copper is indispensable to grids and electrification, while lithium is central to batteries. Yet most extracted material still leaves the region for processing elsewhere. The International Energy Agency estimates that expanding local refining could raise the region’s economic benefit from critical minerals in 2035 from about $185 billion to $220 billion. The strategic contest is therefore not simply about who obtains the ore. It is about who finances processing, supplies technology, sets standards, and captures value along the chain.

Digital infrastructure creates a different form of dependence. Huawei and ZTE have participated in 5G networks, data centers, fiber-optic systems, and other infrastructure across Latin America. As GMF research on technology stacks in other regions shows, layered dependencies can create leverage, disruption risks, and influence over governance norms. Latin American governments nevertheless have rational reasons to accept Chinese offers: competitive prices, bundled finance, rapid delivery, and a willingness to operate in markets Western firms sometimes neglect. Treating those choices as evidence of political alignment misreads the development calculation behind them.

China’s regional presence is changing in addition to expanding. Sovereign lending reached $2.8 billion in 2024, its highest level in five years but still well below the peak years of a decade earlier, and recent financing has largely flowed through national development banks. This mirrors the broader restructuring of the Belt and Road Initiative toward smaller projects, equity stakes, and compatible technical standards. The result is a footprint that is more selective, more corporate, and more deeply embedded in ordinary economic activity.

Reaching Out

Latin American governments are not generally seeking equidistance between Washington and Beijing. They are pursuing a multi-vector strategy to preserve deep ties with the United States while diversifying partners to increase room for maneuver. American pressure, especially with the Trump administration’s penchant for coercive tools, can alter decisions on individual ports, technologies, or assets, but it cannot substitute for an economic proposition. Applied too broadly, coercion may strengthen the very impulse to diversify that Washington hopes to contain.

A competitive US strategy should therefore be selective about risk and concrete about development. In critical minerals, Washington and its European partners should support local processing rather than merely seek privileged access to raw materials. Long-term purchase agreements, political-risk insurance, development finance, and partnerships for power, logistics, technology, and workforce training could make projects bankable while allowing more value to remain in the region. That would offer Latin American governments something China’s current model often does not: a credible route from extraction to industrial upgrading.

In digital infrastructure, the objective should be resilience rather than blanket exclusion. The United States and Europe can help finance secure and interoperable networks, promote open standards such as Open RAN, and expand technical exchanges on cybersecurity, transparent procurement, and the screening of foreign investment in critical assets. Governments should retain the authority to choose suppliers but make those choices with a clearer understanding of concentration, data, and governance risks. A credible alternative must compete on price, finance, and speed, not only on security claims.

This is the central contradiction confronting the Donroe Doctrine. Washington is elevating hemispheric primacy at a moment when exclusivity is harder to sustain. China is already embedded, and Latin American countries have more options than they did two decades ago. US influence depends on a combination of disciplined risk management and the capacity to offer, not simply to exclude.

The views expressed herein are those solely of the author(s). GMF as an institution does not take positions.