EE.UU. vs. China: Who Dominates the Global Economy?

EE.UU. vs. China: Who Dominates the Global Economy?

Trump and the New Economic Isolation of the United States

The protectionist shift and its immediate consequences

Since taking office in 2025, Donald Trump has pursued an economic agenda centered on protectionism and economic nationalism. His “America First” slogan translated into a set of policies that broke with decades of U.S.-led trade liberalization. Among the most notable measures were tariffs of up to 25% on key imports like steel, aluminum, and auto parts from major trade partners—including the European Union, Mexico, Canada, and China. In China’s case, tariffs reached 145% before being temporarily reduced after a trade truce.

The immediate result of this shift was greater global trade tension and mounting uncertainty for companies and investors. The U.S. went from being a champion of liberal global order to a power reluctant to embrace multilateralism, weakening its leadership within global economic institutions and creating friction even with its traditional allies.

International responses to a unilateral approach

In response, many countries began to rethink their trade relations with the United States. Some sought to diversify their markets, while others sped up bilateral or multilateral agreements without U.S. involvement. Ironically, this transformation opened new doors for China, which positioned itself as a more stable and trade-friendly actor.

Countries such as Germany, France, Canada, and Mexico have shown increased willingness to engage with Beijing. Even in Latin America, a region long dominated by U.S. influence, a progressive reorientation toward Asia is evident—partly as a direct reaction to Trump’s isolationist policies.

China’s Relentless Rise on the Global Stage

Advances in technology, infrastructure, and strategic resources

While the United States retreated behind trade barriers, China seized the geopolitical vacuum to project itself as an emerging global leader. Its growth has been both steady and strategic: in just 24 years, China’s share of global GDP rose from 3% to 17%, and when measured by purchasing power parity (PPP), it now surpasses the U.S. in both production and consumption.

Nominal GDP of the US vs. China in trillions of dollars. Source: IMF

One of the cornerstones of China’s ascent has been technological development. According to the Australian Strategic Policy Institute, 57 out of 64 critical global technologies are currently led by Chinese companies, including breakthroughs in artificial intelligence, proprietary chips, and operating systems. This evolution not only positions China as an innovation hub but also reduces its technological dependence on the West, strengthening its industrial sovereignty.

China also dominates strategic mineral processing, accounting for 70% of global capacity, a crucial advantage for sectors like aerospace, electric vehicles, and advanced electronics. This gives China significant geo-economic leverage over the global supply chain.

Leadership in key industries: EVs, batteries, and manufacturing

China’s dominance extends to key industrial sectors shaping the future. In the electric vehicle (EV) industry, it leads the global market in both production and innovation. Companies like BYD and NIO are outperforming Western rivals in volume and efficiency. Simultaneously, China tops the global production of lithium batteries and solar panels, both of which are essential to the global energy transition.

Moreover, China’s strength in advanced manufacturing has often displaced the U.S. as a primary supplier of industrial goods. This leadership, solidified amid global economic turbulence, positions China not just as the world’s factory, but increasingly as its strategic brain.

Trade Relations: Latin America Caught Between Two Giants

China’s growing footprint in the region

Over the past two decades, China has significantly increased its economic presence in Latin America, doing so with strategic intensity. Trade between China and the CELAC countries (Community of Latin American and Caribbean States) has multiplied by a factor of 40, with projections surpassing $750 billion by 2035. China has overtaken the United States as the main trading partner of Brazil, Chile, and Peru, cementing its economic influence in key sectors such as energy, mining, infrastructure, and technology.

Unlike the U.S. model, China offers financial assistance without explicit political conditions, an approach welcomed by several Latin American governments. However, it requires guaranteed export repayment terms, which can lead to structural economic dependency on Beijing.

Key cases: Mexico, Argentina, Peru, and Ecuador

Mexico, traditionally tied to the U.S. economy, presents a noteworthy shift: although 84% of its exports still go to the United States, for the first time in 2024, over 20% of its imports came from China—a milestone in supplier diversification.

Argentina has renewed its currency swap agreement with China, enabling trade in yuan instead of dollars, thereby reducing its exposure to the U.S. financial system. Meanwhile, Ecuador is seeking funding directly from Chinese banks for strategic projects. In Peru, the Chancay megaport—60% owned and built by China Cosco—shortens shipping time to Asia by 11 days, positioning the country as a key node in trans-Pacific trade.

These examples demonstrate that China’s influence in Latin America goes far beyond trade—it encompasses infrastructure, investment, logistics, and even an alternative financial order to the U.S. dollar.

A New Multipolar Era? Reshaping the Global Order

Belt and Road, no-strings financing, and global expansion

China’s global strategy blends commerce, diplomacy, and infrastructure investment. Its most ambitious initiative, the Belt and Road Initiative (BRI), now includes over 150 countries across Africa, Eastern Europe, and Central Asia. Through this vast network, China aims to embed itself deeply into global supply chains, offering financing for ports, highways, railroads, and telecommunications.

In contrast to the U.S. approach, China avoids imposing political or democratic conditions. This tactic has proven attractive to governments seeking development without external interference. In return, Beijing demands export guarantees as collateral, which helps secure strategic resources and long-term market access.

The result is a global expansion visible through energy partnerships in the Middle East, development financing in Africa, construction in Eastern Europe, and a tight alliance with Russia to undermine U.S. dollar dominance. China no longer follows the international system—it now acts as an architect of a multipolar alternative.

U.S. vs. China: Zero-sum rivalry or inevitable coexistence?

The clash between the United States and China is not merely economic—it is structural. The two powers represent competing models of development and visions of global order. Yet, China’s rise does not imply the immediate decline of the U.S.: both nations remain deeply interlinked and exert complementary influence in many regions.

In Latin America, for instance, it’s difficult to envision an exclusive alignment with either side. Countries are increasingly looking to benefit from both poles: the volume and financing from China, alongside the cultural, institutional, and financial stability represented by the U.S.

The paradox is clear: while Trump attempts to contain China through tariffs, his policies may in fact be accelerating the rise of his chief rival, prompting nations to strengthen ties with Beijing. In this evolving context, the world is not shifting toward a single new leader, but rather entering an era of strategic competition in a complex, multipolar system.

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Ignacio N. Ayago CEO Whale Analytics & Mentes Brillantes

Permíteme presentarme: soy Ignacio N. Ayago, un emprendedor consolidado 🚀, papá con poderes 🦄, un apasionado de la tecnología y la inteligencia artificial 🤖 y el fundador de esta plataforma 💡. Estoy aquí para ser tu guía en este emocionante viaje hacia el crecimiento personal 🌱 y el éxito financiero 💰.

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