Potential Growth Spots in Latin American Exports

We provide a scenario analysis aimed at identifying the potential size of the US market that could be more readily served by products from the top four Latin American countries, given China's higher import tariffs. 

The substantial declines in Chinese exports across various sectors reveal significant opportunities for Latin American economies to enhance their export capabilities. However, the coincident sectors identified in this analysis are not exclusive, and the extent to which these countries can leverage this opportunity will depend heavily on their respective production capacities and their ability to meet US market demands, considering volume and price. It is also important to consider that China is unlikely to be completely displaced from these markets.

China's share of US imports has significantly decreased, dropping from approximately 20% at the beginning of the 2010s to 13.4% in 2024. This decline is particularly pronounced in specific sectors, such as leather goods and accessories, which have seen a reduction of 42 percentage points (pps), as well as baskets and straw products, which have lost 34 pps. Other notable sectors include headgear and parts, along with footwear and parts. These substantial losses indicate new spaces for competition for other countries to fill the void left by China in the US market.

China's retreat from the US market can be partially attributed to its strategic redirection of exports toward other regions, coupled with an ongoing supply chain diversification strategy. This approach not only enables China to mitigate risks associated with US trade policies, but also allows it to enhance its competitive edge in emerging markets. While China has been losing market share in the US, it has concurrently increased its share in the global market overall.

A new trade landscape has emerged due to the tariffs imposed by the new US administration. These tariffs have created a complex and uncertain environment characterized by increased restrictions on international trade — yet they have also opened new potential opportunities. Notably, Latin America benefits from a general tariff rate of 10%, significantly lower than the tariffs imposed on China. This disparity presents opportunities for the four largest economies in the region to explore new markets.

Brazil 

The US ranks as the second-largest destination for Brazilian exports, accounting for 12% of the total. US imports from Brazil totaled US$42.3 billion, with significant contributions from oil (20%) and iron and steel (11%), sectors where China has limited participation.

A set of 2,645 products exported by both China and Brazil to the US has been identified. This coincident product set accounts for 62% of Brazil’s exports to the US, totaling US$26.1 billion.

While Brazil has made promising gains in exporting animal products, its export profile to the US is quite diversified, encompassing both basic goods and manufactured products, which increases the number of coincident products. These coincident products correspond to US$408.9 billion in Chinese exports, representing the size of the opportunities that can be explored if Chinese exports become less competitive.

Colombia

The US is Colombia's primary trading partner, accounting for 29% of the country's total exports. Colombia has enjoyed a favorable trade position as a result of a free trade agreement (FTA) with the US, which has exempted most Colombian products from base tariffs.

Although these products are now subject to a new 10% tariff, Colombia benefits from the advantage of having already established a presence in the US market. This established foothold allows Colombian exporters to navigate the competitive landscape more effectively, leveraging their existing relationships and market knowledge. The main products imported by the US from Colombia include oil, gold, coffee and flowers, sectors that are minimally represented in Chinese exports.

A set of 1,677 products exported by both China and Colombia to the US has been identified. This coincident product set accounts for 48% of Colombia’s exports to the US, totaling US$8.5 billion. These coincident products correspond to US$367.9 billion in Chinese exports, representing the size potential.

Argentina

The US ranks as the second-largest destination for Argentine exports, accounting for 8% of the total (US$7.1 billion), with important representation from oil, precious stones and metals, and organic chemicals — sectors with minimal participation in Chinese exports.

A set of 1,083 products exported by both China and Argentina to the US has been identified. This coincident product set accounts for 57% of Argentina’s exports to the US, totaling US$4.1 billion.

These coincident products correspond to US$305.4 billion in Chinese exports, representing the size of the opportunities that can be explored as long as Chinese shipments lose competitiveness. 

—By Rafael Amiel and Joao Machado

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.