“One thing is geopolitics, another is trade,” said Milei. “I’m not going to break commercial ties with China”.
In recent years, one of the US’ main policy goals toward Latin America has been to halt China’s growing economic influence there. This policy began in earnest during the Biden Administration, as senior US officials started pressuring Mexico to reduce its trade with China. Mexico’s AMLO government eventually buckled under that pressure in April 2024, and imposed hundreds of new tariffs on Chinese goods.
As we reported in our article, “Mexican Economy Faces Its ‘With U.S. Or Against U.S.’ Moment“, the growing deployment of protectionist measures in Mexico, primarily at the behest of the US, was eliciting rare criticism in the Mexican business press. One editorial likened Mexico’s relationship with the US to a marriage, in which “there is no room for a Chinese lover.” It also warned that Mexico’s main trading partner is becoming “increasingly possessive”.
At around the same time, then-SOUTHCOM commander, General Laura Richardson, was doing the rounds of neo-con think tanks like the Atlantic Council and the Aspen Institute, talking about the need to shut out China and Russia from Latin America’s vast treasure trove of mineral and energy resources, using “aggressive means” if necessary.
Now, the Trump administration is taking this approach to a whole new level that involves trying to strong-arm Venezuela into cutting all ties with China, its biggest trade partner, Russia and Iran, and in so doing destroy what remains of its shrunken economy. It is also proposing to control the sale of Venezuela’s oil, having the proceeds deposited in US banks, and then forcing Venezuela to use what remain of those funds after the US has taken its cut, to buy US goods.
“Plata o Plomo?”
This is actually worse than the “plata o plomo” (silver or lead) deal Latin American drug cartels are famed for offering in their shakedowns of government officials, since the US is not even offering Venezuela any silver, just lead. Put simply, if the Venezuelan government doesn’t allow the Trump administration to seize control of all its oil, the US will keep seizing its ships, attacking the country, and kidnapping, or even killing top Venezuelan government officials.
Trump’s new National Security Strategy (NSS) may assert a Trump Corollary to the Monroe Doctrine, which seeks to “restore American preeminence in the Western Hemisphere” and keep the Hemisphere “free of hostile foreign incursion or ownership of key assets.” But nowhere in that document does it mention anything about forcing countries in the region at gunpoint to cut ties with any and all US adversaries or give up control of their resources to Washington.
Instead, it talks about (emphasis my own):
- Accelerating efforts to “roll back outside influence in the Western Hemisphere by demonstrating, with specificity, how many hidden costs — in espionage, cybersecurity, debt-traps, and other ways — are embedded in allegedly ‘low cost’ foreign assistance,… including by utilizing U.S. leverage in finance and technology to induce countries to reject such assistance.”
- “Mak[ing] clear that American goods, services, and technologies are a far better
buy in the long run, because they are higher quality and do not come with the same
kind of strings as other countries’ assistance… The choice all countries should face is whether they want to live in an American-led world of sovereign countries and free economies or in a parallel one in which they are influenced by countries on the other side of the world.”
Venezuela, and by extension, all countries, are now being shown what it means to be living as a “sovereign country” and “a free economy in an American-led world” — by being attacked, having their head of state kidnapped, their resources plundered, and then being told to cut all ties with their other trade partners, and then spend all their remaining funds on “higher quality” US goods — all at the barrel of a gun.
“A Wise Choice”
In the words of Donald J Trump, “Venezuela must commit to doing business with the United States of America as their principal partner — A wise choice, and a very good thing for the people of Venezuela, and the United States.”
Media outlets are already suggesting that the Trump administration’s militarised shakedown of Venezuela will impose serious limits on China’s influence in Latin America. From the Wall Street Journal article, “Maduro’s Capture Threatens China’s Ambitions in Latin America”
The takedown of Maduro throws a wrench into Xi’s regional political calculus, raising questions about the next direction for Venezuela as an oil supplier—and as a reliable needle in Washington’s side. It could weaken the underpinnings of Beijing’s other regional philosophical bedfellows, including Cuba and Nicaragua, and make China more cautious about throwing around its economic and diplomatic heft.
“Recent events in Venezuela are likely to weigh heavily on how regional leaders think about next steps and external partnerships,” said Margaret Myers, director of the Asia & Latin America Program at the Inter-American Dialogue, referring to both China and the U.S. Beijing might have trouble capitalizing on regional concerns about U.S. overreach, she said, because China is “no longer viewed across parts of the region as an economic lifeline or stabilizing external partner.”
This is apparently news, however, to the US’ most servile vassal state in the region, Argentina. As readers may recall, its government was bailed out by the US Treasury with tens of billions of dollars in credit swaps just a few months ago — all to ensure that the Milei government did not suffer a humiliating defeat in Argentina’s mid-term elections.
In an interview on Tuesday, President Javier Milei gushed about Trump’s removal of Maduro, saying that Trump is “redesigning the world order” and advancing against what he described as “murderous socialism.” However, when asked about China, Milei said his government was not prepared to break ties with the Asian giant. From Buenos Aires Herald:
[T]he libertarian leader clarified that, despite Argentina’s geopolitical alignment with the United States, his government will not break its trade ties with China.
“Trump is redesigning the world order, no longer thinking in terms of globalisation to pass onto geopolitical terms and part of that discussion is to end murderous socialism, whether it calls itself Venezuela, Cuba or Nicaragua,” said Milei in an interview with streaming channel Neura.
Argentina’s President highlighted the strength of the bilateral relationship between Buenos Aires and Washington and said that his government’s stance had been defined before he took office.
“There is a reordering and it is clear that some players are better positioned than others. We adopted a clear stance before being elected; our geopolitical alliance was part of our electoral platform,” he affirmed.
He has “always” spoken of a “geopolitical alliance because commercial questions run parallel,” argued Milei.
One of the reasons Milei gave for not breaking ties with China was that the US itself has very deep trade ties with the Asian giant. The money quote from the interview: “One thing is geopolitics, another is commerce”.
These words clearly betray Milei’s rather flawed understanding of how the world works, especially when it comes to geopolitics. One need only ask Europe’s energy-starved households whether geopolitics and commerce exist in separate realms, as Milei seems to believe.
So, on the one hand, Milei just a few months ago begged Trump for a bailout, which he duly received, while on the other he expects Trump to have no problem whatsoever with Argentina continuing, or even expanding, its trade with China, even as Trump himself is telling Venezuela to sever all ties with China, Russia and Iran, or else.
Milei’s magical thinking is truly something to behold. He seems to believe he is in a geopolitical alliance with Trump — an alliance that will be beneficial to both him and his government, if not Argentina as a whole. Nothing could be further from the truth…
Nick Corbishley 