In an unexpected move that sent shockwaves through the Guatemalan export community, China has recently prohibited the import of Guatemalan coffee and other goods.
The ban came without an official explanation, but Guatemalan President Bernardo Arevalo suggested it might be linked to his country’s diplomatic ties with Taiwan. “We will take care of it,” Arevalo assured.
Guatemala, along with Paraguay, stands out as one of the few Latin American countries maintaining official relations with Taiwan. In contrast, nations like Honduras and Nicaragua have shifted their allegiance towards Beijing, recognizing China’s claim over the island nation.
Guatemalan coffee blockade
This import blockade of Guatemalan coffee and other goods is just one of several minor conflicts highlighting the increasingly complex relationship between China and Latin America. Vladimir Rouvinski, political studies associate professor at Icesi University in Colombia, told DW, “China is clearly using leverage against Taiwan, rather than directly targeting Guatemala.”
In Costa Rica, tensions with China escalated when the government pressured a manager from state-owned energy supplier ICE to resign. This followed a controversial party hosted by Chinese tech giant Huawei, attended by 70 high-ranking ICE employees. ICE president Mario Acuna emphasized the need for sensitivity amidst ongoing contracts and litigations, warning that the employees’ actions could tarnish the company’s reputation.
Further straining relations, Costa Rican President Rodrigo Chaves adopted the Budapest Convention on cybercrime, which China has not signed. Huawei’s Latin America chief criticized Costa Rica’s stance as “unprofessional,” with Rouvinski interpreting this as a message that “China has to play by the rules as well.”
Economic friction across the continent
Economic conflicts with China aren’t limited to Guatemala and Costa Rica. In Brazil, cheap Chinese steel imports have pressured local steel producers, while affordable Chinese textiles threaten small fashion boutiques. Environmental damage caused by Chinese operations has also ignited debates.
In response, Brazil has imposed a 20% tax on Chinese imports valued under $50, a move aimed at protecting local businesses. This decision surprised Chinese e-commerce giant AliExpress, which argued that the tax would primarily affect the poorest consumers and deter foreign investment.
Small Brazilian firms, particularly in the textile industry, resent Chinese suppliers like Shein, whose low-cost production methods undercut local businesses. There is a growing sentiment that China’s trade practices undermine local economies rather than supporting them.
Christian Hauser, a Latin America expert at the University of Applied Sciences in Switzerland, noted that the benefits of Latin American trade with China increasingly seem to favor Beijing. This has fueled criticism and could lead to more pronounced opposition to China’s trade practices.
Hauser also highlighted the geopolitical dimension, as Latin American countries navigate the rivalry between the US and China. He suggested that the current tensions with Guatemala and Costa Rica might be a prelude to more conflict-ridden relations in the region.
Interestingly, Nicaragua’s authoritarian government appears to have a stable relationship with China. Local media reported that Chinese companies received 13 mining concessions within a short period, indicating a favorable business environment for Beijing amid a crackdown on NGOs by Nicaragua’s government.
As Latin America grapples with these economic and diplomatic challenges, the region’s relationship with China remains a dynamic and contentious issue, likely to evolve with the shifting geopolitical landscape.
Cover Photo: Depositphotos
