Latin American economy could benefit from U.S.-China trade dispute

The U.S. and China represent the world's two biggest economies, in that order, and factors affecting one or both of them often cause reverberations felt by economic systems of other nations. Such effects aren't always negative, however. For example, the current trade dispute between the two nations could notably benefit various Latin American countries. 

According to Bonds & Loans, the alternating American and Chinese tariffs offer the most potential to Mexico, but other nations in the region stand to see some economic wins as well.

  • Brazil and Argentina are exempt from duties on steel imports and can take advantage of material surplus and a devalued peso, respectively. The latter nation also benefits from tariffs on Chinese electrical importers, while the former may see progress in its aerospace vertical.
  • Colombia, as a major motorbike manufacturer, may gain advantages from U.S. tariffs on Chinese machines.
  • Costa Rica develops certain specialized medical equipment that now won't see competition from China's comparable products.
  • There's no doubt Mexico is the biggest winner here. Aircraft manufacturing (including necessary parts), heating and refrigeration products, electrical equipment, numerous vehicles and medical devices are all made in Central America's biggest nation, and they won't have to worry about Chinese manufacturers of these items cutting into their market share until the trade dispute comes to an end. 

When it comes to Chinese tariffs on U.S. products, the possible advantages apply to a much broader spectrum of nations, Bonds & Loans reported. Chile's already massive seafood business is likely to see gains, as are Peru's and Ecuador's. Paraguay and Uruguay, major beef exporters, will see more orders from America. Soybean, sorghum, horticulture products and wine tariffs from China are good news for Brazil, Argentina, Mexico, Chile and Paraguay.

Free trade was the prominent topic at the Pacific Alliance summit, a major Latin American economic conference in late July. According to The Business Times, representatives of Mexico, Colombia, Chile and Peru expressed a collective desire to collaborate instead of falling into protectionist debates.

Latin American economy could benefit from US-China trade dispute