Latin America Urged to Build Strategic Autonomy as U.S.-China Rivalry Intensifies

The recommendations form part of “Ruptures and Opportunities,” a report released on August 4 by an independent commission co-chaired by former Chilean president Michelle Bachelet and former Colombian president Iván Duque. The 13-member body was convened by ECLAC Executive Secretary José Manuel Salazar-Xirinachs and worked with the support of UN Secretary-General António Guterres. It identifies eight major disruptions to the international order, including the weaponization of economic relations, declining multilateralism, asymmetric multipolar competition, technological fragmentation and the weakening of the global climate consensus. Its central argument is that Latin American governments should develop their own geopolitical strategies instead of allowing competition between Washington and Beijing to determine their policies.

The difficulty is that the region’s economic relationships are highly uneven. South America has become increasingly connected to China through exports of copper, iron ore, lithium, soybeans, oil and other commodities. In 2023, China received 27% of South American exports, compared with 13% sent to the United States. Mexico and Central America, by contrast, remain much more closely integrated with the U.S. economy through manufacturing supply chains, trade agreements, migration, remittances and investment. The United States also remains the overwhelmingly dominant external security power and retains substantial influence over finance, advanced technology and critical infrastructure. Consequently, the room for cooperation with China will differ considerably by country and sector.

ECLAC’s proposal is best understood as flexible alignment rather than equidistance. A government could maintain security cooperation with the United States, trade extensively with China, seek European environmental technology and work with other developing economies on food security or climate finance. This approach preserves options and reduces dependence on any single partner. It also reflects the reality that both major powers provide assets the region cannot easily replace. China offers a large market for commodities, industrial equipment, infrastructure financing and increasingly competitive technologies in electric vehicles and renewable energy. The United States remains central to regional exports, investment, financial markets, technology and security. A binary choice could therefore impose substantial economic costs without guaranteeing meaningful strategic benefits.

The region’s natural resources give it leverage, but only if governments avoid repeating a model based primarily on extraction. Latin America and the Caribbean holds an estimated 46% of global lithium reserves, 35% of copper reserves, 28% of graphite reserves and 23% of rare-earth reserves. It is also the world’s largest net food-exporting region, contains nearly half of global terrestrial biodiversity and around one-third of freshwater resources, and has a comparatively clean electricity system. These assets are increasingly valuable to the energy transition, digital infrastructure and global food security. However, competition for minerals can reinforce commodity dependence if foreign investment is limited to mines and ports. Governments will need to negotiate local processing, technology transfer, workforce development, environmental safeguards and reliable public revenue if they want geopolitical competition to support industrial development.

Regional fragmentation is the main obstacle to that ambition. Latin America and the Caribbean has a combined market of more than 660 million people, yet intraregional trade accounts for only about 14% of total goods exports. Weak transport connections, incompatible regulations and repeated political changes prevent the region from using its collective scale. The commission consequently favors practical coalitions among willing countries rather than waiting for unanimous regional agreements. Cooperation on electricity grids, critical-mineral standards, logistics, digital infrastructure, development finance and joint procurement could increase bargaining power while allowing governments with different political orientations to participate.

For investors and policymakers, the report presents U.S.-China rivalry as both an opportunity and a risk. Competition can widen access to capital, technology and export markets, but it can also divide infrastructure into incompatible systems, expose projects to sanctions or export controls and encourage governments to accept poorly designed investments for short-term political reasons. Strategic autonomy will therefore depend less on diplomatic rhetoric than on transparent procurement, stable regulation, fiscal capacity and credible institutions. Latin America will gain from great-power competition only if it can use external partnerships to raise productivity, diversify exports and retain more value domestically. Otherwise, the region may attract greater attention from Washington and Beijing without securing a corresponding improvement in its long-term development.