German media: Trump is pushing South America into China's arms

The Frankfurter Allgemeine Zeitung commented that under Trump's tariff threats, more and more South American countries are strengthening their trade and economic relations with China. The Neue Zürcher Zeitung pointed out in a commentary that from a geopolitical perspective, the US tariff policy is counterproductive.

The Frankfurter Allgemeine Zeitung published a commentary stating that South America was once seen as the United States' "backyard," and President Trump repeatedly claimed that he would not allow China to enter this "backyard" of the United States. However, things have not gone as planned. Under Trump's tariff threats, China's economic and political influence in South America is increasing day by day. This commentary, titled "Trump's Vacancy in South America," wrote:

In South America, China is no longer just a buyer of raw materials, but also an important sales market and strategic investment destination. The Chinese electric vehicles seen on the streets of Brazil are a clear sign of this shift. In July this year, BYD's factory in Camaçari, Bahia, Brazil, has already started production. The medium-term goal of this factory is to produce 300,000 electric vehicles per year. This place used to be a Ford factory, but Americans gave up this factory in 2021. In addition, China is very active in South America in building new ports, railways or mining lithium. These kinds of investments create dependencies that go far beyond short-term profit motives.

Trump tried to stop China's rapid rise in South America and the gradual decline of US influence. But for this purpose, Trump did not increase investments or strengthen trade relations, but raised the tariff baton. In Latin America, the self-contradictory nature of Trump's tariff policy is most obvious. Although he only imposes a basic tariff of 10% on South American countries, each percentage point of the tariff has become a boomerang against himself. Except for Mexico, the US has about $10 billion in trade surplus with South America every year. Yet these countries, which are extremely beneficial to the US economy, have become the target of Trump's tariff baton. However, the South American economy has shown considerable resilience. The International Monetary Fund expects the region to achieve a growth of 2.2% this year after a brief decline in April.

For Mexico and other South American countries that are highly dependent on the US market, Trump's tariffs may have short-term effects. But in the long run, the effect of tariffs is counterproductive: South American countries are further pushed towards China, which has nothing to do with likes or dislikes, but is dictated by market logic. Tariffs on copper ore exports to the US have increased exports to China for Chile and Peru. Similarly, in the agricultural products, China has replaced US soybeans with Brazilian, Argentine and Paraguayan soybeans, and opened the market for Brazilian sorghum. Even in the coffee market, China is taking advantage of the current opportunity to benefit, continuously facilitating market access for Brazilian suppliers. After Trump announced a 50% tariff on Brazilian products, China immediately invited 183 Brazilian coffee companies to expand exports to China.

The Frankfurter Allgemeine Zeitung commented that while Trump is swinging his tariff baton at South American countries, China is encouraging these countries to develop trade with China through infrastructure projects and preferential loans. Although Beijing's approach is certainly not a selfless act, both sides can at least benefit from it.

"In fact, Europe could and should have become a partner like South America. If there are any positive effects from Trump's trade protectionism, it is that the whole of Europe, including France, has resolved to quickly conclude a free trade agreement with the Southern Common Market (Mercosur). Once the agreement is signed, a free trade zone will be created, covering 800 million consumers and one-quarter of the global economy, making it the world's largest free trade area. For the EU, this will be an opportunity to fill the gap left by Trump in South America, while for South America, they desperately need an alternative outside of China and the US."

The Neue Zürcher Zeitung published a guest commentary stating that it may be too early to make a final economic assessment of Trump's tariff policy, but the negative geopolitical impact of these tariffs is already very evident:

"One of the reasons why international institutions regulating commodity trade and capital flows are showing signs of decline is that neither the WTO nor the IMF have effective sanction tools to prevent persistent high trade surpluses. In 2024, China's trade surplus reached $99.2 billion, while the US had to work hard to fill a huge $120 billion trade deficit. Long-term trade deficit economies accumulate increasing external debt, while surplus countries like China can continue to accumulate debts. The US's high level of external debt has already posed a major risk of financial crisis."

Although Trump's tariff policy may bring economic benefits to the US, it may cause damage to the US geopolitically. The reason is that the US has not developed a set of geopolitical economic strategies. This is most obvious in the India issue. Starting from August 27, Indian products exported to the US began to be subject to a 50% high tariff. It is said that this is to make India pay a price for its import of Russian oil. However, Indian observers pointed out that the US itself is still importing Russian fertilizers. The reason why Trump wants to punish India is simply because India refused the unequal demands made by the US negotiators. Offending important diplomatic partners may be the biggest negative impact of the US high tariff policy.

Original: www.toutiao.com/article/1844103665720651/

Statement: The article represents the views of the author.