US can't decide Latin America's trade policies

Speaking at the 8th Summit of the Americas in Lima recently, US Secretary of Commerce Wilbur Ross said Latin America should look to the United States, not China, to promote economic development. To support his claim he said Latin America has a trade surplus with the US while it has a trade deficit with China. He also said Latin America exports manufactured products to the US but only raw materials to China. But what he said is not true, at best it is a half truth (even a lie).

Ross said Latin America has a trade surplus of $117 billion with the US and a deficit of $67 billion with China, but did not disclose the year the figures were from. Although Latin America as a region had a trade surplus of $125.87 billion with the US and a trade deficit of $63.31 billion with China last year, the figures are distorted by the large trade surplus that Mexico has with the US and the large trade deficit that Mexico has with China.

Mexico had a trade surplus of $132.41 billion with the US and a trade deficit of $67.43 billion with China last year. But many other Latin American countries, such as Argentina, Chile, Colombia, Guatemala, Honduras, Panama, Peru, Uruguay and Paraguay, had a trade deficit with the US. And several of them, such as Brazil ($20.16 billion), Chile, Peru and Venezuela had a trade surplus with China. So if Mexico is excluded from equation, the trade balance of China and the US with Latin America would be quite different - the region would have a large trade deficit with the US and a small one with China. The trade deficit of Latin America with the US (excluding Mexico) was $12.96 billion, while the figure with China was $4.2 billion last year.