WASHINGTON – Latin America could be the potential and unexpected winner in the ongoing, and so far rhetorical, trade war between the United States and China, economic experts say.

Brazil, Argentina, Chile and Mexico are among the top Latin American economies that already have extensive trade agreements with China and the United States, primarily trading soybeans, iron ore, crude oil and copper into China and manufacturing products into the U.S.

Former United States Secretary of Defense William Cohen said during a panel on the topic at the Atlantic Council Wednesday that if President Donald Trump’s economic advisors do not navigate current trade negotiations carefully, China could utilize its newfound confidence as a growing economy to move into Latin America and fill the gaps the U.S. tariffs will create.

“They’ll look where they can hurt the United States and do minimum damage to [China],” Cohen said. “If they hit the agricultural sector, for example, they’ll look to Brazil or Chile or other Latina American countries to come in and fill their needs.”

Brazil’s raw soybeans comprise $14.4 billion of the total $18 billion of the vegetable that is exported from Latin America each year into China and could therefore benefit from President Xi Jinping’s threat to impose tariffs on important U.S. exports like soybeans and passenger airplanes. The U.S. currently exports $14.2 billion in soybeans to China each year.

The Latin America-China trade relationship has grown drastically in the past decade, with Latin American countries expanding its exports into the Chinese market to nearly $100 billion in products annually. This is evidence of what Cohen argued is China’s growing globalization efforts and pursuit of multilateral trade relations, a philosophy which could undermine the United States in the Trump administration’s “America First” era.

“When we ignore our neighbors to the south, we create a vacuum,” Cohen said. “We ignore Latin America to our peril.”

But Barbara Kotschwar, a private sector specialist for World Bank Group, cautioned that there would ultimately be no winners in the U.S.-China spat, even Latin America.

“I think when you look at the impact of trade tensions on these Latin America countries, the obvious gain is in the commodities,” Kotschwar said. “But the impact of volatility on investor perceptions, we have to look at that as well.”

Even if some Latin American countries can look forward to new trade opportunities, Kotschwar explained, the volatility of such a high-stakes trade brinkmanship will compromise the economic opportunities and fortunes of international companies.

“This kind of uncertainty isn’t great for inward investment in Latin America and the fortune of companies invested across the world,” she said.

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