Managing bilateral relations with China has long been a topic of intense discussion and debate among top U.S. officials. From the beginning of the 21st century until the mid-2010s, the dominant approach favored a policy of “shared responsibility” for handling international affairs. However, over the last decade, an approach of strategic competition or great power competition has prevailed, across the tenures of both Presidents Donald Trump (2017–2021 and 2025–2029) and Joe Biden (2021–2025).

Strategic competition is not new in the history of U.S. foreign policy, as it was the dominant approach during the Cold War. Back then, Washington considered it a matter of national security to exert control over those zones considered part of its sphere of influence and, at the same time, to expel the Soviet Union, its former enemy, from the same regions. 

Now, the United States believes that China’s growth has led Beijing to become a similar threat. Washington sees this threat in a variety of Chinese tactics, including the use of trade bullying practices, the deployment of advanced weapons, the theft of intellectual property, and last but not least, the strengthening of its control over economic zones and critical infrastructure, especially those which could be used for dual military and economic purposes. 

Trump returned to the presidency with renewed determination to mitigate Chinese influence worldwide, giving particular interest to the Western Hemisphere. The 2025 National Security Strategy (NSS) stated that China’s presence in Latin America and the Caribbean poses a challenge to U.S. hegemony not only in the region, but also around the world. The main arguments relate to Beijing’s control of raw materials in the region and its increasing participation in regional supply chains – sometimes flooding countries with its products – but also the elevated number of foreign direct investment transactions registered within the last decade, the building of several infrastructure projects, and financial cooperation with regional countries through loans-for-oil and, more recently, swap deals. 

U.S. concerns about China are not merely economic in scope, but political. If, before, the Chinese government acted as a diplomatic power whose engagement with Latin America and the Caribbean (LAC) was not oriented publicly toward targeting third countries (a sly reference to the U.S.), China no longer hides its intentions to counterbalance U.S. power in the region. China now presents itself as the biggest and most relevant power from the Global South and one trying to integrate more regional countries into its sphere of influence. 

In the democratic arena, despite China’s pragmatic approach of maintaining relations with both left and right parties, its closeness with governments that have expressed anti-American rhetoric and its silence in condemning some actions that have eroded institutional democratic frameworks (i.e., Nicaragua, Venezuela, Bolivia, and Cuba) positions Beijing as, arguably, posing a fundamental threat to the maintenance of the liberal democratic model in the region. It is important to remark that during the past century, spreading this political model was one of the bases on which American power was cemented in the Western Hemisphere. 

For a variety of reasons – political, economic, military, and strategic – the United States desires a reduction in Chinese influence. To advance this goal, Washington has presented a strategy based on three main aspects: a revamped version of the Monroe Doctrine, the concept of Greater North America – which includes countries around the Caribbean Sea, and into the northern Atlantic to encompass Greenland, and Iceland – and the formation of a new security coalition called the Shield of the Americas.

China and the U.S. are engaged in strategic competition primarily in the LAC. This region, which the U.S. considers part of its first ring of security, has seen significant economic engagement with China over that quarter-century. China is now the region’s second-largest trading partner, its biggest lender, and a major source of financing for hundreds of infrastructure projects.

The U.S. government has primarily focused on reducing or eliminating China’s involvement in these economic activities. The most notable action has been to oust CK Hutchison, a Hong Kong-based company, from managing the ports of Balboa and Cristóbal, on either side of the Panama Canal. Initially, the Trump administration pressured the Panamanian government to expel CK Hutchison from the country, citing certain clauses in the 1979 bilateral treaty that returned the canal to Panama. Subsequently, the BlackRock hedge fund attempted to purchase the rights from CK Hutchison, but the Chinese government refused. Finally, a Panamanian judge ruled against CK Hutchison, and the final decision is pending new demands at the international arbitration courts. 

Other ports of interest to the U.S. are located in Mexico, such as Manzanillo (Pacific) and Veracruz (Atlantic), both of which are partially managed by CK Hutchison. The Pacific Ocean port of Chancay in Peru, operated by Chinese shipping giant Cosco, has also been the subject of controversy. Peruvian courts have ruled that activities inside the port must be inspected by local authorities. The Chinese side appealed that decision, claiming that the port is private, but without success. Furthermore, the U.S. government has announced $1.5 billion in funding to modernize the Peruvian military base in El Callao, near Chancay Port. 

The regional oil industry is also a top priority sector in the U.S. competition with China. Currently, the Trump administration’s control over the Venezuelan oil industry has prevented China from being awarded new oil projects, particularly in the Orinoco Oil Belt (OOB), the world’s largest oil reserve. In Argentina, Washington has also put enough pressure on the government to ban Huawei from participating in fiber optic and connectivity projects around the Vaca Muerta oil deposits. 

Similar paths have been taken in the lithium industries of Bolivia and Mexico. After President Rodrigo Paz issued an edict, Bolivia ordered a halt to, and review of, contracts signed by his predecessor with China to exploit the lithium reservoirs in the Uyuni Salt Flat. Mexico, for its part, saw former President López Obrador withdraw the Bacanora project and nationalize its operations in 2022 to reduce potential conflicts with its northern neighbor. 

Another sensitive issue for Washington is the development of 5G networks. For example, the Panamanian government announced that it would dismantle 13 telecommunications towers operated by Huawei in 2025 and replace them with American technology. Meanwhile, the Chilean government stopped the implementation of a new transoceanic optical fiber cable connecting Chile to China after facing strong pressure from the U.S. government. A few years ago, the Biden administration pressured the former Costa Rican president not to grant Huawei a concession to develop the country’s 5G network.

Last but not least, the Trump administration has focused on mitigating Chinese influence in Mexico, its main trading partner, which is sensitive to U.S. national security and economic development. Since taking office again, Trump has urged President Claudia Sheinbaum to impose tariffs on Chinese auto parts, electric vehicles, shoes, home appliances, and textiles. The Trump administration has also focused on mitigating China’s reexporting practices in Mexico, a country that, according to the White House, has served as a backdoor to introduce Chinese products into the North American Free Trade Zone. 

To prevent distortion and ensure the fulfillment of its hemispheric policy, Washington has developed a new security alliance with 19 regional countries called the Shield of the Americas (SoA). In this initial phase, the alliance aims to reduce drug trafficking and attack organized criminal organizations. It will also provide American military assistance to allied countries that request it, in order to prevent internal destabilization.

However, given present realist U.S. foreign policy, it is likely that the SoA will soon focus on preventing any military incursions or deployments by the People’s Liberation Army (PLA) in the region. From an American perspective, this is understandable when considering that one of the main U.S. concerns about China in the region is the potential dual use of critical infrastructure for military and economic purposes. 

These actions, which are part of an updated version of the Monroe Doctrine, send a clear message to the region. Latin American and Caribbean countries must decide whether to prioritize their economic, military, and political relations with the United States or China. If they choose the U.S., the country will integrate them into its sphere of influence. Conversely, if they adopt a pro-China approach, they could eventually face different kinds of economic, political, and military coercion. One thing seems clear: the U.S. is willing to use all aspects of its national power to reduce China’s presence in Latin America and the Caribbean. 

This approach has been generally well-received in the region. Most countries in the greater North American region, excluding Greenland, Canada, and Iceland, have adopted a hedging strategy in favor of the U.S., reducing their political contacts with Beijing in anticipation of a possible deterioration of their bilateral relationship with Washington.

Other countries with relevant economic ties to China, such as Ecuador, Chile, Argentina, and Peru, have presidents who are politically aligned with Washington, but they remain economically engaged with Beijing. This opens the possibility of developing a new triangular relationship between China, the U.S., and Latin America. This strategy seems to be a form of buffering.

Brazil, a global partner of China in the BRICS bloc, and anti-American dictatorships such as Nicaragua and Cuba have expressed their opposition to the current U.S. approach to foreign policy in the region. These countries are keeping their political and economic links with China and refusing any kind of collaboration with Washington. The U.S. is targeting this group, which has chosen a confrontational strategy, in an attempt to change their foreign policy stances.

Finally, there is a group of countries that, despite their relative importance in their respective subregions, act more like free riders – these include some Caribbean countries, as well as Paraguay, Uruguay, and Guatemala. They align with either China or the U.S. depending on changes in the political, economic, and military contexts. 

Although the U.S. rejects the idea that its current policy against China in the region is a 21st-century version of the Cold War, its realist approach focuses on national interests and securing the LAC as its primary zone of influence (or “backyard,” as some officials have called it). In practice, this means that the Trump administration is not hesitating to use coercive tools to secure its position and influence in the region. This includes considering the possibility of military action, as seen with Venezuela, and economic sanctions, such as against Cuba.

Conversely, China, which has also avoided direct confrontation with the U.S., recognizes that the current era demands robust responses to U.S. challenges to its presence in Latin America and the Caribbean. Until now, Beijing has employed two strategies simultaneously. The first is rhetorical and aims to show that Washington’s bullying tactics do not align with the rules-based international system or good diplomatic practice; rather, they resemble Cold War ideology. The second strategy is legal and attempts to counter the coercive measures taken against its companies in Latin America according to international law. Recently, to protect itself and reduce its vulnerability, China has signed various agreements on the reciprocal promotion and protection of investments with its partners in the LAC. 

Additionally, China is employing other strategies. The most relevant is strategic patience. Beijing believes that the current U.S. coercive measures and counterbalancing policies will expire in 2028 when Trump’s second term ends and that the U.S. government hasn’t established a long-term strategy. 

Whether U.S. policies remain on the current track beyond 2028, at present Washington is willing to continue to do whatever it takes to mitigate Chinese influence in the region. This means that Xi Jinping’s government will most likely face increased pressure in the region until at least 2028 and possibly beyond. 

Importantly, during the last Democratic administration, Biden also implemented a foreign policy aimed at reducing Chinese influence in the region. And there are currently bipartisan efforts in the U.S. to develop a long-term approach beyond 2028 to address the challenges posed by Chinese influence in the region.

Undoubtedly, this panorama puts China in a dilemma. It must decide whether to confront U.S. measures against its interests in the region with stronger, more powerful tools, including deeper cooperation with its regional allies. Or, it could act passively, waiting for the end of Trump’s administration – and risk misjudging the solidity of wider Washington’s sentiments about China. 

No matter what option China chooses, it seems almost certain that the U.S., led by Trump or any other future president, will continue to implement a strategy aimed at reducing Chinese influence in Latin America and the Caribbean for at least the next decade. Great power competition is here to stay. Ultimately, Beijing is realizing that its previously touted peaceful rise is presenting new challenges, at least in the LAC, the historic zone of American influence.