How is China responding to the Orange Drift?
The reality of the Trump Corollary doesn't make for an easy map narrative
Imagine a parallel universe with a simple narrative for the Trump Corollary. The US president demands that external powers leave the hemisphere. Countries are forced to choose sides between the US and China. I publish a map with various countries labeled from pro-US to pro-China (with Uruguay somehow off to the side, friendly with everyone). It would be a similar image to the Orange Drift map I published a few weeks ago, with labels mirroring how countries are responding to Trump’s pressures more generally. There would be two clear sides, with perhaps a few countries in the middle ground and up for grabs in the geopolitical great game.
That’s not how the Trump Corollary is playing out in our reality. China’s response and the hemisphere’s are far from a clear narrative. Trump allies are negotiating huge deals with Beijing. Meanwhile, countries that have struggled to manage Trump are also distancing themselves from China. And China is using a range of sticks and carrots to counter the US pressure, making its own mistakes along the way.
Panama - This is the one country where the US vs China battle plays out visibly and in the way that would be expected in that clear-cut parallel universe. And everyone else is watching and adjusting their own responses accordingly. As I wrote in World Politics Review last month, “Though countries are nervous about China’s tough economic response to Panama’s port actions, that doesn’t mean they are thrilled with the Trump administration’s pressure tactics, either. By threatening Panama, the United States is not acting as a reliable partner against Chinese overreach. Both Washington and Beijing are engaging in coercion, meaning small countries get squeezed regardless of which great power they choose during these disputes.”
The biggest Trump Corollary failures come from deep inside his alliance. Three presidents who are emblematic of the pro-Trump Orange Drift - Bukele, Milei, and Noboa - are also working directly with Beijing and receiving economic assistance. All three have cut major deals with China. Bukele continues to invite Chinese investment and imports, negotiating some deals through his family networks. Argentina renewed its Yuan currency swap earlier this year despite a $20 billion swap line provided by the US Treasury and Argentina’s agricultural exports to China have given Beijing the leverage it needs in its trade fight with Trump. Ecuador awarded a big mining contract to a Chinese company this past week. If Trump can’t get these three Trumpian leaders on board with his Corollary, the entire policy will fail.
Mexico is anti-China because of and despite Trump - In contrast to those three allies, Sheinbaum seems quite happy to antagonize China, even as her relationship with Trump has struggled. Mexico’s president is implementing punishing tariffs on Chinese goods. Some of that may be a negotiation strategy as part of USMCA. However, largely separate from US pressure, it also reflects an ongoing sense in Mexico that China is bad for Mexico’s economy. China dumps cheap goods in Mexico that undermine domestic manufacturing, even as the country also competes against Mexico for US offshore supply chains. Despite all that, Mexico remains a top foreign market for China, particularly for electric vehicles.
Honduras still hasn’t flipped - In contrast to pre-election discussion about Asfura potentially flipping the country back to recognizing Taipei, Asfura has yet to move on the issue since he took office. A recent article in the Diplomat describes how various telecom, energy, and trade deals between the PRC and Honduras make any effort to move away from China more difficult. Asfura is almost certainly watching China’s recent clash with Panama and wondering what sort of punishment China may be able to inflict upon Honduras’s economy if he turns against them. Asfura wants to be allied with Trump, but has reasons to fear China’s response if he makes the move.
Peru is chaos - The last interim president was ousted over corrupt business deals negotiated at a Chinese restaurant. The current interim president has found himself cornered into signing a deal for F-16s that forced out two cabinet ministers. The future of the port at Chancay is likely the biggest US vs China influence battle outside of the Panama Canal. I’ve written that the ongoing second round presidential election will be a US vs China proxy battle. Yet, given how quickly governments change, both sides should have little reason to believe they can consolidate their position for a long duration.
Venezuela is an ugly Trump victory - Under Maduro, most Venezuelan oil flowed to China priced at a discount through networks that evaded sanctions. Now the oil money flows through US government-controlled bank accounts. China can buy some of it, but at market rates. Chinese investments in Venezuela have largely halted, and some Chinese oil projects have been canceled under the Rodriguez regime’s new rules. Outside of Panama, this may be the Trump Corollary’s biggest victory, but at what cost? It relies on the US manipulating and controlling the oil market of a dictatorial regime, not exactly the return to democracy and capitalism that Venezuelans wanted.
Nicaragua is a consolidated Chinese foothold - It’s shocking how much China has expanded its presence in Central America under the Ortega-Murillo regime. While Trump has lightly sanctioned Nicaragua, he has not moved anywhere near as aggressively here as he has against Venezuela or Cuba or Colombia or even Panama or Brazil. It’s a blind spot in the Corollary.
Bolivia is up for grabs - Rodrigo Paz has turned Bolivia away from Beijing and toward the US, but his government faces an immediate economic crisis. If the US fails to bail out Paz, at best, he will go the way of Milei: a rhetorically strong US ally who maintains his economic relationship with Beijing. China has been far less aggressive in its response to Bolivia than it has in Panama, perhaps hoping a lighter touch helps it regain influence in the coming months.
Chile leans pro-Trump, but is also uncertain - Trump moved aggressively late in Boric’s term to sanction Chilean cabinet members who approved of a Chinese fiber-optic cable. The issue created tension during the transition, with President Kast traveling to South Florida to meet with Trump even as Boric dealt with the backlash. So a victory for Trump and a loss for China? While that seems likely, similar to Bolivia, Chile’s new government could find itself more aligned with China in the coming months as Kast inherited significant dependence on Chinese markets and needs the Asian market to maintain its economy amid global conditions.
Colombia remains a US ally despite everything - Petro signed the BRI and has clashed loudly with Trump. Yet, beyond the presidential fight, no country in the hemisphere remains quite as allied with the US as Colombia, where decades of military cooperation mean deep connections that have so far outlasted political disputes. It’s possible that a Cepeda victory and four years of his government could crack the US relationship more or bring Beijing closer, but this is a harder lift for China than in other countries in the region. And the environment turns more pro-US if Valencia wins. The biggest US risk is shooting our own foot, cutting off military assistance or trade to an ally that should largely be classified as pro-US despite whatever rhetoric comes from its presidency.
Taiwan allies (Paraguay, Guatemala, Belize) - There was a good NYT article this week on China’s efforts to influence Paraguay, emblematic of how they treat this group of countries. Recognition isn’t changing under President Peña, but Beijing’s quiet, long-game diplomacy may be ironically strongest in the countries where it lacks formal relations.
Brazil strategically plays both sides, regardless of its president - Lula is meeting with Trump this week. There will likely be a critical minerals deal on the table that plays directly into the Trump policies to counter China. While Brazil is polarized on a lot of things, the election this year probably won’t move Brazil at all on the China issue. Just a few years ago, Bolsonaro broke his anti-Beijing rhetoric during the campaign and turned to China for economic cooperation.
Uruguay - President Yamandú Orsi has actively deepened China ties. And because there is no map in today’s newsletter, here is a photo from this past week of Orsi on a US aircraft carrier. He’s balancing this issue.
