Over the past few years, foreign direct investment (FDI) projects from China to Latin America have mostly been in the automotive sector. Between 2021 and 2025, GlobalData’s FDI database recorded 20 projects from China-headquartered companies. Nearly matching this sector is logistics, where ports, airports and warehouses in the region have greatly benefitted from Chinese investment.
Both of these sectors have been points of contention between Western partners and China. As the US looks to pursue the goals set out in its National Security Strategic Review (NSS), these investments will likely be scrutinised, as the US’ neighbours balance investment attraction with geopolitical caution.
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Canadian Prime Minister Mark Carney’s latest deal with China points towards this diplomatic balancing act. While Canada joined the US in enacting export controls and restrictions on Chinese businesses over the past year, Carney’s new deal with China signals a change in strategy.
Canada will lift the 100% duty that was imposed on Chinese electric vehicles (EVs) with the US in 2024, allowing 49,000 cars to enter the Canadian market annually at a 6.1% tariff rate, in exchange for China dropping its tariffs on canola seed from 84% to 15%. Carney said Beijing would also remove tariffs on canola meal, lobster, crabs and peas until at least the end of the year.
Explaining this shift, Carney said “the world has changed”, and that the relationship with China had become “more predictable” than the one with the US.
Auto: Chinese EVs are everywhere
On the automotive front, the aggressive expansion of Chinese EV companies globally has caused friction in Europe and the US, where domestic manufacturers have complained of unfair subsidies that allow companies like Xiaomi and BYD to undercut local prices.
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By GlobalDataHowever, Latin America has largely welcomed this influx as European and US multinationals already dominated the region’s auto sector.
According to a note from economic consultancy TS Lombard, Brazil President Luiz Inacio Lula da Silva’s “top priority is to attract new industrial investment to Brazil in order to provide high-paying jobs for the country’s workforce”. This has made for a convenient partnership with China. EVs from Chinese companies dominated 80% of EV sales in early 2025, according to Brazil’s Electric Vehicle Association. Last summer, BYD inaugurated the first EV plant on the continent in Camaçari, Brazil, on the site of a former Ford plant. The affordability of Chinese EVs has also been key to their success, as they are significantly cheaper than comparable models from Western competitors.
Mexico – which had also been a top recipient of Chinese investment and exports in the auto industry – is now establishing more trade barriers as it seeks to carefully balance US concerns.
According to BloombergNEF, BYD accounts for seven out of every ten EVs and hybrid cars sold in Mexico. Last year, President Claudia Sheinbaum proposed tariffs of up to 50% on certain products coming from countries without a free trade deal with Mexico, which would include Chinese vehicles. While the tariffs were approved by lawmakers and went into force on 1 January, their expected impact is unclear as some observers expect companies to absorb the cost.
Logistics: Chinese ports unnerve Washington
Logistics is the sector with the second-highest number of Chinese investments in Latin America over the past five-year period. According to the Centre for Strategic and International Studies, there are 37 port projects with Chinese ties in Latin America and the Caribbean. While many of these ports have connections with China via factors such as financing or equipment supply, only ten are fully operated or owned by Chinese companies.
Out of these, seven are operated by CK Hutchinson, a Hong Kong-based multinational. While the company had previously been seen as acting separately from Beijing, this perception has shifted in the past few years as China has tightened its grip on Hong Kong. The company is at the centre of a closely watched case in Panama, where the Supreme Court is deliberating whether Hutchinson should be allowed to run two ports in the Panama Canal. US President Donald Trump has said he wants the US to take control of the Panama Canal, which the US built in the 20th century and handed over to Panama in 1999.
The Chancay port in Peru, a joint venture between Chinese state-owned shipping company Cosco Shipping and Peruvian mining operator Volcan, has also raised concerns in Washington as it enables new trade routes that can completely bypass North America.
In September 2025, Reuters reported that the US is launching a mission targeting China’s control over global ports, which could include US or Western companies offering to buy stakes in Chinese-owned or affiliated ports. This tactic is currently being pursued in the Panama Canal case, where US investment firm BlackRock agreed to buy the two ports from Hutchinson nearly a year ago.
NSS goals
The White House lays out its goal for the Western Hemisphere in the NSS very clearly: “make every effort to push out foreign companies that build infrastructure in the region”. However, Chinese investments are deeply entrenched in the continent, making a reversal of this influence particularly difficult. While buying stakes or full projects back from Chinese companies could be an option, the Panama case is already showing how complicated questions of ownership can get – and how countries are finding themselves in the centre of the US-China power struggle.
