Flooded by cheap Chinese goods, Latin America trying to protect its industries

Hybrid and electric vehicles shipped from China are unloaded from the BYD Changzhou car carrier docked at Terminal Zarate, in Buenos Aires province [AP Photo]

China has been flooding Latin American markets with low-priced exports, especially 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 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 U.S. fell by 20% 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.”

The influx of made-in-China cars, clothing, electronics and home furnishings has rankled 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 gain share

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% increase year-on-year from 2024, market intelligence company Sensor Tower estimates. Shein’s monthly active users in the region grew 18%.

It’s not just 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 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 are being 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% 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.”

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.

Chinese autos make inroads

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% 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.

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.

Commodity-rich countries have limited leverage

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.

Mexico’s deficit with China, its second largest trading partner after the U.S., reached $120 billion in 2024, with exports of those 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 rose to nearly $8.2 billion in 2025, fueled by imports of more items such as electrical machinery and equipment and manufactured goods than its exports including of raw materials such as soybean and meat.

Brazil recorded an about $29 billion trade surplus with China last year, according to Brazilian official data. That’s partly due to surging exports of soybeans after Beijing paused its purchases of U.S.-grown soy. Chile runs a surplus with China thanks to its exports of copper, lithium, fruits and wine.

In most cases, China exports mostly manufactured goods and imports raw materials. But the relationship goes far beyond those basics.

China provided loans and grants to countries in Latin America and the Caribbean in 2014-2023 worth roughly $153 billion – the largest source of official sector financing for the region – compared to approximately $50.7 billion that the U.S. provided, according to AidData, a research lab at William & Mary, a public university in Virginia.

That means for every dollar donated or lent by Washington, Beijing provides $3.

Latin America is a pillar of China’s “Global South” strategy of countering Western influence, said Andy Mok, a senior research fellow at the Center for China and Globalization.

China financed a $1.3 billion megaport in Peru’s Chancay, which opened in 2024 that may eventually connect by a planned railway with Brazil’s coasts on the Atlantic.

State-backed Chinese companies also have made massive investments in dams, mines and other infrastructure across the region.

“There may be deep concern about competitiveness, but politically, many countries don’t feel they have the space to resist China’s export surge,” said Meyers from the Inter-American Dialogue think tank. “The relationship has become too important economically.” CHAN HO-HIM, HONG KONG, MDT/AP