Treasury Secretary Janet Yellen wants Latin America to trade more with the United States as part of an initiative that has so far failed to alter China’s dominance in global manufacturing.
Still, U.S. efforts to diversify supply chains with “trusted partners and allies,” including select South American nations, have “enormous potential benefits for driving growth in Latin America and the Caribbean,” Yellen said in a speech this week. Thursday.
Yellen opened an Inter-American Development Bank (IDB) investment event on the sidelines of the inaugural Americas Partnership for Economic Prosperity Leaders Summit, to be held at the White House on Friday.
The presidents of Peru, Chile, Ecuador, Uruguay, the Dominican Republic and Costa Rica attended.
Yellen, who regularly speaks about her friendship strategy to increase supply chain resilience by working primarily with friendly nations rather than geopolitical rivals like China, laid out her vision for new US investments in South America.
Latin American companies “will increasingly have opportunities to lead new areas of clean energy, for example, helping to create vertical supply chains by using locally mined lithium in local battery production,” Yellen said.
“Pharmaceutical and medical equipment companies can grow and innovate to meet increased demand,” he added, and skilled workers can produce the automotive chips needed for electric vehicles.
The IDB, which is Latin America’s largest multilateral lender, would support new projects through grants, loans and new programs. The United States is the bank’s largest shareholder, with 30% of the voting rights.
Increasingly, US political leaders have expressed concern about China’s influence at the IDB. While the Asian superpower owns less than 0.1% of voting rights, it has large economic stakes in some of the bank’s 48 member countries.
In 2022, Latin America and the Caribbean trade with China increased to record levels, exporting approximately $184 billion in goods to China and importing an estimated $265 billion, according to an analysis by the Center for Global Development Policy. Boston University.
And diplomatic relations between Latin America and China have also increased. In March, Honduras cut diplomatic relations with Taiwan in favor of China, following in the footsteps of El Salvador, Nicaragua, Panama and the Dominican Republic.
Latin America will be a region of greater attention next year, when Brazil assumes the presidency of the international forum of the Group of 20.
A Treasury official said Yellen will travel frequently to South America and Latin America next year due to Brazil’s presidency of the G20.