Why Chile is the latest LATAM country to be caught in a U.S.-China power struggle

In this articleChile is the latest Latin American country to have become embroiled in a U.S.-China power struggle.The country, which counts Washington as its top foreign investor and Beijing as its largest trading partner, is facing pressure from the White House over a subsea cable project with links to China. In a surprise move, U.S. Secretary of State Marco Rubio said late last week that the Trump administration would impose visa restrictions on three Chilean officials tied to a digital cable project proposed by Chinese firms, alleging a security threat.

Chilean President Gabriel Boric, who will leave office on March 11, condemned the visa sanctions and rejected the notion that the country "promotes any action that threatens our security or that of the region." Chile's outgoing left-wing government later said one of the sanctioned officials was the country's Minister of Transport and Telecommunications Juan Carlos Muñoz, without commenting on the identities of the other two.The U.S. ambassador to Chile, Brandon Judd, defended the visa restrictions on Monday, telling reporters that it is Washington's "sovereign right to take actions when we feel that the region's security is being threatened," according to The Associated Press.The spat comes just days before a Latin American leader's summit in Miami, Florida — and two weeks before Chile's incoming right-wing government takes over in Santiago. It also represents a major test for José Antonio Kast's administration, following the right-wing candidate's election victory late last year.Analysts say U.S.

President Donald Trump, who is seeking to counter China's strategic influence in the region, is sending an unequivocal message to Latin American countries. The U.S.-Chile tensions were, above all, "a calibrated warning" to the Kast administration that strategic infrastructure decisions will be treated as geopolitical alignment choices — rather than neutral tenders, according to Mariano Machado, Americas principal analyst at risk intelligence company Verisk Maplecroft.To be sure, digital undersea cables are the backbone of the world's internet and telecommunications infrastructure, enabling everything from international phone calls to financial transactions. By some estimates, as much as 95% of international traffic passes through these largely unseen data super-highways."The near-term external consequence is that Kast's upcoming Washington engagements – chief among them, in the Shield of the Americas summit – will become early tests of how Chile balances partners under pressure," Machado said."As US-China competition intensifies in the region, Chile's 'digital hub' ambition becomes investable only if geopolitical concerns are addressed upfront, not retrofitted after a crisis," he continued. "Winning deals will be those that lock in clear governance and credible security assurances early enough to preserve bankability." China's embassy in Chile has reportedly accused Washington of "obvious contempt for the sovereignty, dignity, and national interests of Chile" following the Trump administration's visa restrictions against Chilean officials.China's strategic and economic influence in Latin America is well established, although it is thought to be the target of Trump's so-called "Donroe Doctrine" — a portmanteau of Donald Trump and the Monroe Doctrine, which refers to a 19th century foreign policy position that asserted Washington's influence over the Western Hemisphere.In just the last few weeks, for example, Panama's top court ruled against Hong Kong-based CK Hutchison, saying a concession held by a subsidiary of the firm to operate ports at either end of the Panama Canal was unconstitutional. The outcome was widely seen as a victory for Trump's regional security ambitions. The U.S. has also ratcheted up pressure on Cuba's communist-run government, threatening to impose tariffs on any country that provides oil to Havana, and recently conducted an extraordinary military operation to depose Venezuelan President Nicolás Maduro.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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