Latin America's Trade Dilemma: Chinese EVs and E-commerce Goods Reshape Markets, Prompting Protectionist Pushback

HONG KONG (AP) — From the showrooms of São Paulo to the ports of Veracruz, a wave of affordable Chinese products, led by electric vehicles and e-commerce parcels, is redrawing the commercial landscape of Latin America. This accelerating trend is fueling both consumer adoption and growing alarm among regional governments and industrial groups, setting the stage for a complex trade reckoning.

For Beijing, Latin America represents a strategic frontier—a constellation of fast-growing economies and vital resource suppliers. As China deepens ties with partners like Brazil and Chile, its manufacturers, facing a domestic slowdown, are aggressively pursuing overseas customers. The response has been a series of defensive measures from Mexico, Brazil, and Chile aimed at curbing certain imports and protecting local businesses.

An Influx Reshaping Markets

Bolstered by state support and efficient production, Chinese automakers are making significant inroads. In Brazil, over 80% of the more than 61,000 EVs sold in 2024 bore Chinese marques, with BYD and GWM leading the charge. In Mexico, Chinese-made vehicles captured roughly 15% of the market last year—a stark contrast to the high-tariff walls they face in the United States.

BYD, the world's leading EV maker, recently underscored this push by offloading over 5,800 electric and hybrid vehicles in Argentina, capitalizing on a temporary tariff exemption. Parallel to the auto surge, low-cost goods from e-commerce giants Temu and Shein are flooding consumer markets.

"The narrative has shifted," noted José Manuel Salazar-Xirinachs, executive secretary of the U.N.'s Economic Commission for Latin America and the Caribbean. "China is no longer just an exporter of basic goods. It's a formidable competitor in technology and innovation, particularly in sectors like electric vehicles."

Mounting Deficits Spur Protectionist Measures

The trade dynamic is increasingly lopsided. While China covets the region's lithium, copper, and other raw materials, Latin America's trade deficits with Beijing have swelled, mirroring China's record global surplus. Mexico's deficit with China hit $101 billion in the first ten months of 2025 alone.

In reaction, tariffs are rising. Mexico has imposed duties of up to 50% on a range of Chinese imports, including vehicles and textiles. Brazil is scrapping tax exemptions for low-value international parcels—a move directly targeting Chinese e-commerce—and hiking levies on EV imports. Chile has similarly increased tariffs and applied a value-added tax on small parcels.

A Relationship of Asymmetric Interdependence

Latin America's leverage is limited. Beyond trade, China has become the region's largest official creditor, providing roughly $153 billion in loans and grants from 2014-2023, triple the U.S. contribution during that period, according to AidData at William & Mary. State-backed Chinese firms are also entrenched in critical infrastructure projects across the continent.

"There's profound concern about industrial competitiveness, but politically, many countries feel they have little room to forcefully resist China's export surge," said Margaret Myers of the Inter-American Dialogue. "The economic relationship has become too significant to jeopardize."

Voices from the Ground

Carlos Mendez, an auto parts manufacturer in Monterrey, Mexico: "We're being undercut on price at every turn. These tariffs are a necessary first step, but we need long-term industrial strategy, not just temporary barriers. Our own governments must help us innovate to compete."

Ana Silva, a small business owner in Rio de Janeiro: "It's a double-edged sword. As a consumer, I love the affordable options. But as someone who employs local people, I see the factories struggling. We need fair competition, not a flood that drowns our productive base."

Professor Liam Chen, trade analyst at a Santiago-based think tank: "The data shows a fundamental restructuring of supply chains. Latin America is not just a resource backyard for China anymore; it's a pivotal consumer market. The protectionist response is understandable but risks missing the larger picture of integration and needed productivity reforms."

Eduardo Rojas, union leader in São Paulo (sharper tone): "This is economic colonization, dressed up as 'trade.' They dump subsidized goods, hollow out our industries, and then hold the debt leash. Our leaders are selling our economic sovereignty for short-term gain and cheap consumer trinkets. It's a disaster in slow motion."

___

Reporting by AP journalists across Latin America. Sá Pessoa reported from Sao Paulo, Brazil. Janetsky reported from Mexico City. AP journalists Isabel DeBre in Buenos Aires, Argentina, Nayara Batschke in Santiago, Chile, Tatiana Pollastri in Sao Paulo, Brazil and Fabiola Sánchez in Mexico City also contributed.