China Is Investing Billions in Latin America, Potentially Sidelining US Farmers for Decades to Come

December 24, 2025

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(News from the States) ... COSCO Shipping, a state-owned Chinese company, is investing at least $3.5 billion to construct 15 berths, logistics facilities, and a 1.1-mile tunnel, enabling cargo to be channelled directly from the port to nearby highways.

Once fully operational, Chancay will function as a regional redistribution hub for exports from Peru, Argentina, Brazil, Chile, Ecuador and Colombia: from copper and lithium to soybeans and other agricultural products. Upon completion around 2035, it is expected to become the region’s third-largest port.

These and other recent investments across the region have positioned China to source more agricultural products from Latin America as it pivots away from U.S. farmers in response to President Trump’s higher tariffs.

China first began that pivot in 2018, when Trump’s first-term tariff hikes ignited a global trade war. But since returning to office, the president has renewed that strategy, and China’s investments signal a generational shift that may not reverse if and when the trade war subsides.

“What are the signs that China’s here to stay [in Latin America]? Really, the infrastructure,” said Henry Ziemer, an associate fellow with the Americas program at the Center for Strategic and International Studies (CSIS), a U.S. nonprofit policy research organization that reports 23 ports across Latin America have some degree of Chinese investment.

“Ports, railways, roads, bridges, metro lines, energy, power plants are probably the best signs that China has a long-term commitment … These are long-term projects.”

Daniel Munch, an economist with the American Farm Bureau Federation, said that when a country gains control over ports that make trade faster, cheaper and more reliable, such as the Port of Chancay, trade flows tend to “lock in.” Reversing that trend, he warned, would require the United States to narrow its efficiency gap, noting that none of its container ports rank among the world’s top 50.

“It could entrench patterns,” Munch said.

This is bad news for American farmers, particularly soybean growers.

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But tensions between the United States and China have risen this year – Trump has increased tariffs and recently threatened a 157% tax on all Chinese imports, while China responded by reducing U.S. soybean imports to near zero for six months.

A trade deal announced in November ends the suspension and includes commitments for China to buy 12 million metric tons of U.S. soybeans in the final two months of 2025 and at least 25 million metric tons annually through 2028, according to Purdue University and farmdoc Daily.

Brazil has stepped in as China’s biggest supplier of soybeans, which are used to feed livestock to support protein demand.

China has become one of the two main export markets for at least 10 nations, most of them in South America, according to the International Trade Outlook for Latin America and the Caribbean 2023 report by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC).

From 2010 to 2022, the region accounted for nearly one-third of China’s food imports. Brazil alone supplied about 21% of those imports over the same period.

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“In recent years, there has been significant growth in telecommunications projects and across all areas of transportation – including airports, ports, roads, railways, and subways – as well as in sanitation and urban mobility. These sectors account for nearly 60% of the total number of projects,” said José Manuel Salazar-Xirinachs, executive secretary of ECLAC, who highlighted the scale of China’s involvement during the 2024 International Seminar on Contemporary China Studies in Costa Rica.

China has viewed Brazil as a strategic partner for several years, primarily because of its soybean supply, and has responded with infrastructure investments, according to Fernando Bastiani, a researcher with ESALQ-LOG, the Group of Research and Extension in Agroindustrial Logistics at the University of São Paulo.

“Today, COFCO has direct access to farmers, purchases soybeans, and oversees the entire commercialization chain, including storage and transport to China,” Bastiani said. “In recent years, [COFCO] has also realized it needs to control logistics systems and infrastructure, because that’s a key part.”

In Brazil, Bastiani explained, logistics costs account for 20% to 25% of the final soybean price, mainly due to the long distances between farms and ports and the high cost of trucking. “China understood that by investing in infrastructure, it could help make Brazil more competitive,” he said.

In May, the two countries signed new agreements to deepen their agricultural trade ties, granting Brazil authorization to export meat and ethanol byproducts.

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Before the first tariffs were introduced in 2018, China accounted for about 60% of the port’s business. Today, it’s closer to 40% and falling, as trade flows and sourcing shift toward countries such as Vietnam, Indonesia and Thailand.

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While China builds long-term infrastructure to secure its supply chains, Washington is still struggling to define its trade strategy and to contain the political fallout of renewed tariffs.

In mid-September, the Republican-controlled House of Representatives moved to block Congress from influencing Trump’s tariff policy, even as Senate Democrats prepared to force votes challenging his trade war, The New York Times reported. The maneuver effectively stripped lawmakers of the ability to advance measures to lift tariffs until March 31, 2026, extending a prohibition first imposed in the spring to spare members from taking a politically difficult vote.

“Tariffs not only cause farmers to pay more for their inputs, but they have also seen tariffs reduce markets for U.S. farm products,” said U.S. Sen. Chuck Grassley, a Republican from Iowa, during an October session.

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Some purchases have started rolling in. But April Hemmes, an Iowa soybean farmer who has promoted increased trade with China, said the agreement would be difficult to fulfill, noting that delivering 12 million metric tons of soybeans by early next year is “not very realistic.”

As China establishes new trade routes across Latin America, every new port or shipping lane makes a future recovery for U.S. farmers more challenging.

Despite the tensions, Hemmes still views China as an essential market.

“I don’t think our relationship with China has been damaged,” the Iowa soybean farmer said. “China is a low-cost buyer and will need soybeans from the U.S. for a long time. But we will never be their number one source.”

For her, the changing politics and policies have made the United States an “unreliable trading partner.”

“The only way that we become their top choice would be if our soybeans were far cheaper than South America’s.” READ MORE