Globalization, as it was designed by the major Western powers after the fall of the Berlin Wall, is about to come to an end with the emergence of an alternative power that is gradually vying for power in all areas: the People’s Republic of China. With a political system led by the Communist Party that accepted the rules of global capitalism, China managed to escape the pitfalls of the path of development and present itself today as a nation on the way to becoming the world’s greatest power.
This familiar framework has sparked a series of reactions in the United States, first with the regional mega-treaties that the Obama administration sought to limit Chinese influence in the East and West but never came into force. None of this worked and would not work as the Asian giant became the main industrial power and benefited from the offshoring process of European and American global value chains to reduce labor costs. While Europe began to talk about the “end of work,” China’s industrial employment continued to increase in its growing cities. Apple had been moving its factories to Asia since 2004, leaving only the knowledge and marketing parts in the United States.
Trump rightly pointed to the deindustrialization his country experienced to win the 2016 election. Since then there has been a profound change in the international economy, with a return to open protectionism, with very strict policies that included increases in tariffs and import quotas and paralyzed the World Trade Organization. There was talk of relocation (onshoring) or localization to neighboring countries (nearshoring) in order to achieve reindustrialization of the USA. All of this ended in a very critical way with the US-China trade war in 2018, which was diluted by the pandemic. After Biden’s term as president, it is a resurgent Trump who takes office in early 2025 with further tariff increases, leading to growing conflicts with the financial world and the Fed.
It seems that the White House’s attention this year has been focused on the region, a topic that doesn’t know whether to celebrate or fear. The back and forth with progressive presidents like the Mexican Claudia Sheinbaum, the Colombian Gustavo Petro and the Brazilian Lula himself, if not the war threats against Maduro in Venezuela, contrast with the explicit and official support for right-wing candidates like Nasri Asfura in Honduras. The trade that the US Treasury Department gave to a troubled Milei in the midterm elections is another example of gestures that have not been seen in a long time and that are still difficult to interpret.
Will this have positive economic consequences for countries joining their northern neighbor? We are asking ourselves this question at a time when Argentina is signing a free trade agreement that appears to benefit only a few sectors and harm many. Is Open AI’s investment in Patagonia credible? Will we move to a further stage in the development of nuclear energy with the support of the United States?
These questions animate the debate about international relations today. Greater United States involvement in the region and the search for ideological allies for economic support would be an important novelty in the relationship. The guess that one has is that this is only due to the presence of Trump as President of the United States, and that this might not have been the case with another President, Democrat or Republican, and we will have to see to what extent the support for Argentina goes beyond that of the two Presidents currently in office. To understand our region today, we could talk about Trumpshoring: a regional approach unprecedented since the end of the FTAA in 2005, in which there is strong support for the continent’s ideological allies, whether they are president or not, and an economic key: promoting Chinese investment and trade in Latin America. Could the United States propose a longer-term productive project for the region? This is the doubt that fuels all skepticism.
* Economist.
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