Fergus Hodgson on the trade war between the US and China for dominance in Latin America

US-China Trade War in Latin America: Is Washington Finally Waking Up?

For decades, Latin America was seen as the natural sphere of influence for the United States—not just due to geography, but because of deep historical, diplomatic, and commercial ties that anchored the region to the Western hemisphere. Yet over the past twenty years, a silent but strategic threat has been gaining ground with surgical precision: Communist China.

China's presence in Latin America is no longer hypothetical. It is a strategic reality. From port infrastructure in Argentina to telecommunications in Mexico, and from conditional lending to opaque diplomacy, the Chinese Communist Party (CCP) has methodically worked to erode American influence. Perhaps most troubling is China’s deepening grip on the Panama Canal—a geopolitical artery essential to U.S. maritime strength.

According to analyst Fergus Hodgson, this shift has gone dangerously under the radar, ignored by a U.S. political class distracted by foreign wars and internal ideological battles. But there are signs of a long-overdue awakening.

One such sign is Senator Marco Rubio’s recent visit to Mexico, where he addressed the growing presence of Chinese, Russian, and even Iranian influence in the region. Rubio’s visit sent a loud message: the United States is prepared to sanction or outright block foreign companies doing business with geopolitical rivals—if that business undermines American security.

However, Hodgson is clear: while the “stick” approach of sanctions is necessary, it must be matched by the “carrot” of opportunity. Economic incentives like updated trade agreements and nearshoring initiatives can help countries like El Salvador, Guatemala, and Honduras pivot away from authoritarian temptations. These nations still share a cultural and historical alignment with the U.S.—one that can be revived with the right policies.

Nowhere is the challenge more urgent than in Panama. China’s stake in critical parts of the Panama Canal is not just a commercial issue—it is a national security threat. With nearly 6% of global maritime trade passing through the canal, Chinese control could limit America’s ability to project naval power and respond to global crises. It's not just about trade—it’s about strategic dominance.

The trade war, then, has evolved beyond tariffs and spreadsheets. It’s an existential clash over the future of the Western Hemisphere. Latin America stands at a crossroads between two visions: the American model of economic freedom and transparency, and the Chinese model of autocracy and manipulation.

It is imperative that the United States act swiftly and assertively. Lip service at the OAS is no longer enough. A full-spectrum strategy—economic, diplomatic, and security-based—is essential to regaining lost ground and protecting America’s backyard.

The key question remains: will this administration rise to the challenge, or will it allow a communist regime to fill the vacuum left by decades of American inaction?

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