President Trump’s statements regarding the influence of the People’s Republic of China (PRC) over the Panama Canal, and the focus on the issue as part of Secretary of State Marco Rubio’s February 2025 trip to Central America and the Caribbean have focused U.S. and global attention on the strategic importance of the challenges posed by PRC in the region most closely connected to the United States by ties of geography, commerce and family. The nature of that threat is real, but broadly misunderstood. The objective of this article is to clarify them.
The PRC presence in Latin America is principally commercial, although it also includes important political, security, and other strategic dimensions. The PRC has become the major commercial partner of virtually every country in the Americas south of Panama, with bilateral trade with the region exceeding $500 billion in 2024 according to the PRC’s own data. Since 2000, PRC-based companies have invested over $193 billion in the region, in hundreds of projects. It’s two principal policy banks, China Development Bank and China Export-Import Bank, have loaned at least $120 billion to the region since 2005. While U.S investment is greater, and while the character of Chinese lending has shifted away from state-to-state loans in recent years, the perceived linkage between the PRC state and its companies magnify the effect of Chinese economic activities, including what political and commercial leaders are willing to do, or not say about the PRC, to not jeopardize access to the Chinese market or PRC-based business partners.
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