Key Takeaways:
The 2024 APEC summit in Peru focused on inclusive trade, supply chain resilience, digital innovation, and sustainable development.
China is leveraging its Belt and Road Initiative (BRI) and projects like the Chancay Port to strengthen its trade dominance in South America and secure critical mineral supplies.
The Trump administration’s protectionist policies are expected to drive South America closer to China, while the Biden administration’s strategy to enhance partnerships in the region is likely to lose momentum.
South American agribusiness and mining sectors are poised for accelerated growth, driven by rising Chinese demand for foodstuffs and critical minerals.
Overview
The 2024 Asia-Pacific Economic Cooperation (APEC) summit in Peru focused on fostering economic collaboration and innovation. The agenda focuses on inclusive trade, sustainability, and digital transformation, alongside critical topics such as energy transition, financial inclusion, and the role of critical minerals.
With a new U.S. administration on the horizon, many attendees anticipated reduced U.S. engagement in South America. Biden sought to reassure attendees by highlighting America’s recent investments in infrastructure, technology, and green energy under his leadership as well as efforts to strengthen regional alliances. However, the forthcoming change in U.S. leadership meant that U.S. officials were unable to make full use of the conference to advance a long-term agenda in the region.
Chinese President Xi Jinping positioned China as a staunch advocate of globalisation, contrasting it with forecasted U.S. protectionism. Xi reaffirmed China’s dedication to free trade, multilateralism, and pledged that China would remain a driver of global economic growth. At the summit, the inauguration of the $3.6 billion Chancay Port — constructed under China’s Belt and Road Initiative (BRI) in Peru — underscored Beijing’s increasing influence in South America. The port is set to transform Peru into a key trade hub, linking South America to Asia, and is expected to drive growth and investment opportunities.
Critical Minerals
Peru’s vast mineral wealth positions it as a pivotal player in the global energy transition. As the world’s second-largest copper producer and home to significant lithium reserves, Peru is well-suited to support renewable energy storage, electric vehicles, and electronics. Meanwhile, the proximity of Peru to the “Lithium Triangle” between Argentina, Bolivia, and Chile, further enhances its strategic role in supplying critical minerals to global markets.
Forward Look
Geopolitical Influence in Latin America
KSG assesses that the Chancay Port and other BRI projects are likely to continue deepening China’s economic integration with South America, securing supply chains and enhancing its geopolitical influence out to 2030. As the U.S. grapples with domestic challenges, South American nations are expected to strengthen their partnerships with China, particularly in mining and agribusiness. KSG assesses that this shift now positions China as the dominant economic partner in the region, outpacing U.S. influence and creating new opportunities for growth and collaboration.
KSG finds it highly likely that the American presence in the region will recede in the coming year following the Trump administration's protectionist agenda, and the willingness of the Chinese government to fill the gap. The 2024 signing of a memorandum of understanding between Peru and the U.S. did establish a framework for sector governance and improved mineral access, however, the incoming administration’s economic foreign policy agenda has created an impetus for South American governments to protect themselves by strengthening their relationship with China.
KSG does not assess the Trump strategy of protectionism as wholly negative, however, this receding position will likely be an outcome.
KSG assesses that China’s strengthened economic position in Peru may compromise the U.S. military industry’s access to copper. The war in the Ukraine has highlighted the issue of munitions output, putting into question the sufficiency of American stockpiles. Copper is a key metal in military munitions, and given Chile and Peru’s key position in the world’s copper production, increased Chinese influence will likely undermine the U.S.’s ability to augment its own supply with South American copper in the event of another live conflict.
South American Industries
KSG assesses that China will prioritise securing reliable mineral supplies, with Peru's proximity to South America's lithium triangle and its vast copper reserves presenting significant opportunities for partnerships and investment.
KSG assesses that higher value-added Chinese professional industries are likely to grow in the region going forward. Hong Kong and Peru have formalised a free trade agreement at the APEC Summit. The agreement offers Hong Kong businesses access to over 150 sectors in Peru, reducing tariffs, streamlining trade, and providing the Peruvian economy with access to one of the world’s major reservoirs of capital and professional expertise.
KSG assesses that South America’s agribusiness sector stands to benefit significantly from enhanced trade relations with China. Nearly half of Brazil’s exports are agricultural goods, with China as the leading destination. Argentina, Paraguay, and Uruguay are also all major exporters of beef and soybeans, well-positioned to benefit from improved access to Asian markets. China’s food imports have more than doubled in value in the past decade, driven by declining arable land and growing demand for staples like soybeans, corn, and beef.
Most Likely Scenario in 12 months (November 2025)
The incoming Trump administration will have imposed wide ranging import tariffs, with negative effects for South American economies starting to be seen. Lowered competitiveness for South American goods on the American market will soon reduce exports, devaluing South American currencies, and placing added strain on Central Banks.
To make up for lower exports to the U.S., many South American economies will be looking to China for willing buyers. This pivot will be well facilitated by this point, given the recently established free trade agreements, infrastructure, and weakened Latin American currencies.
With a greater reliance on the Chinese market to absorb South American output, the Chinese government will be in a strong position to negotiate for still greater access to the South American market for Chinese manufacturing, which will also need to find new markets to clear its supply of goods not sold in America.
American mining companies will be finding it harder to outbid Chinese companies for new mining rights, strengthening the Chinese hold on rare earth minerals in a key territory and setting back the U.S. energy security agenda.