Latin America fights back against cheap Chinese goods
HONG KONG — China has been flooding Latin American markets with low-priced exports, especially autos and e-commerce goods, as its exporters adjust to US President Donald Trump’s tariffs and geopolitical moves.
The world’s second-largest economy has become a major trading partner for many Latin American nations, seeking access to their abundant natural resources and growing markets while expanding its influence in a region Trump views as America’s Backyard.
Chinese businesses face slow demand at home. They need new markets for their products as the country ramps up production in many industries. Exports to Latin America, a market of more than 600 million people, and other regions have climbed 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 for China to offload its excess industrial production.”
Pushback
The influx of made-in-China cars, clothing, electronics and home furnishings has rankled countries trying to build their own globally competitive industries. Some, including Mexico, Chile and Brazil, have raised tariffs or taken other measures to protect their local industries.
Still, some countries are pushing back against Chinese imports.
Mexico has long sought to protect local industries, imposing tariffs of up to 50 percent on imports from China, including automotive products, appliances and clothing.
Brazil is among the countries eliminating or phasing out “de minimis” import tax exemptions for overseas parcels costing less than $50, in part to target cheap imports from China. It’s also increasing tariffs on EV imports. Other countries may follow suit, as some analysts expect more protectionist measures including tariffs and stiffer regulations coming out of Latin America.
Chile has raised tariffs and imposed a 19 percent value-added tax on low-value parcels.
Given China’s growing leverage, though, 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 may retaliate in kind,” he said. “So, their leverage has a limit.”
Headache for business
Cheap goods from China are welcome news for many Latin American consumers, but they’re a headache for local businesses.
Chinese e-commerce platforms, led by Temu and Shein, have accelerated that trend.
“I use Temu all the time, whether to buy clothes or household items. The same things I would find in brand-name stores or shopping 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, a 165 percent increase year-on-year from 2024, market intelligence company Sensor Tower estimates. Shein’s monthly active users in the region grew 18 percent.
It’s not just online shopping.
Invasion from China
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 shop, is struggling to compete.
“The Chinese have invaded us in terms of merchandise,” said Ramírez, sitting behind the counter of his completely deserted store.
Over the past few years the number of shops selling Chinese-made goods in Mexico City ’s downtown has more than tripled, Ramírez said, in some cases putting long-established Mexican stores out of business.
Jobs lost to imports
Argentina is bearing much of the brunt of rising Chinese imports, as local factories shut down and lay off workers in a manufacturing sector that employs almost a fifth of its workforce.
The volume of e-commerce imports — mostly from China — soared 237 percent in October from the same month a year earlier, Argentine government statistics show.
“We’re operating at historically low capacity as imports break record highs,” said Luciano Galfione, president of the nonprofit Pro Tejer Foundation, which represents textile manufactures. “We’re 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 the Buenos Aires-born Jazmín Chebar clothing brand. “It’s an international phenomenon but it’s now really beginning to have dramatic importance here.”
‘Low-cost online channel’
A Temu spokesperson said it has been giving Latin America local businesses “access to a low-cost, scalable online channel that was previously out of reach for many of them,” including the opening of 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.” It would not comment on broader trade policy debates.
Inroads by Chinese cars
Mexico and Brazil — Latin America’s regional auto manufacturing centers — also are 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 percent 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 Chinese auto exports, importing 625,187 vehicles last year, according to the China Passenger Car Association, surpassing Russia’s imports.
Both Brazil and Mexico already have their own robust auto industries.
Mexico, as a base for major global manufacturers, is estimated to be the world’s seventh-largest auto producer, though about 3.4 million of the nearly 4 million vehicles it made last year were exported. Brazil turned out about 2.6 million vehicles, including many EVs and hybrids. That compared with China’s output of 34.5 million vehicles, including more than 7 million exported overseas.
Comparative edge on EVs
In an industry where scale is vital, “China does have a comparative advantage on EVs,” with affordable prices and massive government support, said Jorge Guajardo, a partner at the consultancy DGA Group and a former Mexican ambassador to China.
Affordable Chinese cars appeal to many drivers and will continue to make inroads in Latin America, said Paul Gong, head of China Autos Research for the Swiss bank UBS.
Chinese automakers also are 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 denied.
Limited leverage on 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 just sells, they don’t buy,” said Guajardo.
******
Get real-time news updates: inqnews.net/inqviber
