Lessons from the Roosevelt Corollary: Combating China in Latin America 

In 1904, President Theodore Roosevelt responded to European meddling in Venezuela with a corollary to both parties: Rescind all foreign aggression from the Western Hemisphere or face American muscle. Roosevelt’s proposition was a spiritual successor to the Monroe Doctrine of 1823, which forbade undue European influence in the Western Hemisphere. In truth, the Monroe Doctrine was a political formality, as the fledgling United States lacked the strength to enforce it. Eighty years later, the Roosevelt Corollary changed this by arming America’s anti-colonialist decree with the ‘big stick’ of the American Navy, expanded under Roosevelt. The Roosevelt Corollary authorized the United States to solve regional crises in the Western Hemisphere; such as the Dominican Republic’s 1905 debt default, Cuba’s 1906 insurrection, and Haiti’s 1915 anarchy crisis. Over a century later, America must issue a new Roosevelt Corollary to defend itself from growing Chinese influence in Latin America, but this time must turn to the big stick of tariffs to enforce it. 

Trade

The People’s Republic of China has gained staggering ground in Latin America and the Caribbean (LAC). Chinese trade with LAC has grown by 3471.4% from 2000 to 2022 to surpass $500 billion in value. China is now South America’s largest trading partner and second to the United States for LAC proper. 

Chinese companies have gained leverage over many LAC supply chains by funding regional maritime infrastructure. Through its subsidiary companies, Beijing has significant investments in at least 40 LAC ports while controlling at least a dozen ports from the Port of Kingston, Jamaica’s largest port, to Paranaguá, Brazil’s second largest port. Additionally, China manages several leased ports, including at both ends of the Panama Canal, and has loaned millions to modernize port infrastructure in Cuba and Venezuela; both are fervent anti-American autocracies—Venezuela’s dictator, Nicolás Maduro, recently threatened to invade the American territory of Puerto Rico. Just three months ago, President Xi Jinping traveled to Peru to inaugurate the gargantuan Puerto Chancay. This $3.6 billion port will allow China to extract critical resources like lithium, copper, iron, and oil. Through these investments, China has transformed itself into a titan of maritime trade. China’s growing power at sea increases its military, political, and economic capabilities, foreshadowing a dangerous future of Chinese supremacy.

The United States can not allow China to dominate LAC mineral supply lines. Most concerningly, China risks monopolizing global lithium deposits; Latin America contains an estimated 60% of the remaining global lithium reserves. China already owns over ⅔ of all lithium refining centers in the world and has already made headway into Latin American reserves. In 2023, Chinese firms signed a deal with Bolivia to build mining infrastructure and extract its lithium reserves for an expected annual output of 25,000 tons

China’s debt-trap diplomacy is alive and well in Latin America and the Caribbean, allowing Beijing to economically influence local governments. In Retired General John Pettus’s SOUTHCOM analysis of China-LAC relations, he describes China’s diplomatic transition from an initial soft power approach—used to form debtor-creditor relationships—to hard power threats and pressures after gaining leverage in local economies. This includes successful pressure campaigns on LAC nations like Panama, El Salvador, and Honduras to switch their recognition of Taiwan as a country to a Chinese province. China’s growing investments give it greater influence over the economies, and therefore governments, of LAC nations, increasing the threat of a diplomatic realignment in the region to Beijing and its military demands.

Military

China can use several of its LAC ports stationed around key choke points for military action. Chancay’s terminals host the depth (16+ meters) and berth to dock large military vessels like oil tankers and aircraft carriers, securing Beijing a wartime foothold in the Western Hemisphere. This is not China’s only strategic foothold on the continent, as its ports in Jamaica and Brazil have similar dimensions for naval use. China has loaned millions to at least 6 other regional ports capable of military function, including in Mexico, Ecuador, and Honduras. If China were to successfully convince LAC governments to cede these ports, whether through economic or political pressure, the PLAN would gain strategic positions to attack U.S. naval units and resupply Chinese vessels in the East Pacific and Caribbean Ocean. 

Furthermore, in a flyby over Panama, U.S. Southern Command General Laura Richardson assessed Chinese ports on both ends of the Panama Canal to be capable of “dual use and… be[ing] quickly changed over to a military capability.” These ports could be used by China to establish a “choke point” and quickly seize control of the Panama Canal, shutting down American trade. In Marco Rubio’s Senate confirmation hearing for Secretary of State, he valued arguments that these ports already grant China de facto control of the Panama Canal.

Chinese maritime infrastructure also creates espionage risks for the United States. China’s National Intelligence Law mandates all Chinese companies to aid state intelligence, including port managers in foreign countries. This gives China surveillance capabilities near critical locations like the Panama Canal and Guantanamo Bay. China also hosts at least four listening posts in Cuba capable of intercepting signals from Florida and nearby Gulf of Mexico states. These posts can be used to spy on regional American military bases, including U.S. Central Command in Tampa, Florida, and Guantanamo Bay, Cuba, just 70 miles away.

All of China’s maritime developments in LAC threaten American national security. The United States must respond with haste.

Tariff Argument

Tariffs tax imports at ports of entry, leading consumers to seek cheaper goods elsewhere and potentially protecting vulnerable domestic industries from foreign market competition. The Trump administration already intends to impose high tariffs on China to shield American manufacturers from the state-subsidized dumping of cheap Chinese goods in American markets. These tariffs can also be used to disrupt the economy of the imposed nation for national security purposes. In 2018, the United States imposed sanctions and tariffs on Iran’s oil exports, decreasing Iranian oil barrels sold per day from 2.5 million to 500,000. As a result, Iran’s economy contracted, currency weakened, unemployment increased, and fiscal deficit widened over the 2018-2021 period. These factors limited the amount Iran could invest in its proxy terror groups like Hezbollah and Hamas, weakening their military capabilities and Iranian influence in the Middle East. To similarly reduce China’s ability to invest abroad, the United States can institute blanket tariffs on China’s manufacturing, mineral, and financial sectors. President Trump should then extend his planned 60% tariffs on all Chinese goods to include all goods processed through ports owned or operated by China in LAC to incentivize host nations to retake control of their ports. 

Due to recent and unrelated events in China’s market, American tariffs may have a greater impact if leveled now. American tariffs would shock China’s vulnerable economy and paralyze private outward investment flows. A strong GDP saved Beijing from Trump’s 7.5%-25% tariffs in 2018; but now, China’s emerging property market crisis, debt explosion, and weak domestic demand have stagnated China’s economy. Increasing tariffs to 60% would inflict massive currency deflation, slashing Chinese export revenue and capital outflow. Currency deflation would make foreign goods more expensive for China to buy, forcing Beijing to buy fewer resources like lithium, nickel, and copper from LAC and to financially retreat from regional investment.  

Expanding these tariffs to include goods processed through Chinese-controlled ports would open a second economic front against China. Tariffs on goods from Chinese LAC ports would evaporate transshipment profits, or commerce conducted by Beijing through LAC middlemen to avoid American tariffs. Tariffs would also economically dissuade LAC nations from exporting through Chinese-controlled ports, as they would face pressure from local shippers and freighters charged with the tax at American ports. This, in turn, may even enable these nations to seize or force Chinese firms to auction off their ownership stakes, although this expropriation process would admittedly be complicated and an essay in of itself. Perhaps more realistically, these tariffs would also reduce port revenue for Chinese firms which, already in a contracting economy, may be forced to sell shares—and control—to non-Chinese companies organically. 

Tariffs+

Tariffs alone will not combat Chinese influence; Instead, the United States must see tariffs as the beginning of a multi-step plan to clear the way for alternate American trade and investment deals that strengthen ties with LAC nations. The United States should, and must, be able to host better trade, infrastructure, and private financing deals with LAC nations. 

Chinese corruption, overfishing, and pressure campaigns have politically and environmentally exploited South American nations, which mostly affect the citizens. In a process called geostrategic corruption, Chinese firms create corruption in weak LAC governments through the bribing of local officials. These firms will also ignore environmental regulations to increase their profit margins. For example, Chinese fishing fleets have reportedly overfished the Peruvian fishing ecosystem and negatively impacted the ability of local fishermen to earn living wages. Standing up to China does not just benefit American interests, it helps the people of Latin America fight political and environmental corruption in their local economies.

The United States is in a prime position to replace China as the hub of foreign direct investment in Latin American infrastructure and supply lines. Already, the U.S. dollar is expected to appreciate, as indicated by strong consumer confidence and expected interest rate cuts. President Trump’s proposed tariffs may also strengthen the dollar by decreasing American consumers’ demand for foreign goods and currencies. Increased/level exports and decreased Chinese imports would improve America’s trade balance, as China composes a stunning chunk of America’s trade deficit. Of America’s $78.2 billion trade deficit in November 2024, $25.4 billion (32.5%) of it came from trade with China. Removing such a large trade deficit from the American trade balance would greatly strengthen the dollar. American firms can then take advantage of this appreciation to invest in the now relatively cheaper and more profitable foreign assets, infrastructure, and supply lines in Latin America. In contrast, China’s yuan would depreciate as foreign exchange markets sell the currency to offset the dollar’s gains.

President Biden’s attempts to increase trade and investment with LAC have been unable to compete with China’s. However, with China economically destabilized, it would be easier for the United States to regain its regional footing. Already, Chinese banks have started prioritizing lending credit to stagnating domestic industries and have both reduced FDI to LAC and decreased China’s investments in maritime infrastructure. Levying tariffs would further burden Chinese banks as the weakened yuan decreases FDI influence. The United States can then seize on China’s capital vacuum in LAC by offering its own infrastructure investments. Smacking China with the big stick of tariffs will fight Chinese influence in Latin America and the Caribbean, securing America from a generational threat to its national security.

(Visited 158 times, 74 visits today)

About Rob Gioia

Rob Gioia is Co-President of The Michigan Review. He is an incoming Defense + Security Studies Fellow at The Fund for American Studies.