Three signs that Latin America is no longer peripheral on the new map of value chains

For three decades the logic of global value chains was relatively simple: produce where cost is lowest, ship by the most efficient route, and trust that trade would flow without major interruption. That logic has not disappeared, but it is no longer sufficient. Pandemic, conflict, tariff disputes and the race for strategic technologies introduced new variables: proximity, predictability, security of supply and regulatory alignment.

The result is a rearrangement still under way, whose final shape nobody knows. What can already be observed, however, are consistent signs that Latin America occupies a different position on this new map than it did ten years ago. Three of those signs deserve particular attention, not in isolation, but for the way they connect.

First sign: geography has a price again

The first sign is the most visible and has a clear address: the border between Mexico and the United States. Mexico became the United States’ main trading partner in early 2023, and bilateral trade reached US$ 873 billion in 2025. That same year Mexico accounted for 15.6% of all goods exported and imported by the United States, while China’s share fell to 7.5%. In a few years, a relationship that looked structurally stable was reordered.

The movement, however, is more complex than the substitution narrative suggests. Alongside Mexico’s advance in the North American market, Chinese exports to Mexico grew to 21% of Mexican imports, producing a surplus of nearly US$ 120 billion for China in 2024. The rearrangement does not remove Asia from the chains; it redistributes the stages. Components still come from far away, while assembly, integration and delivery move closer to the end consumer. Mexico itself has signaled adjustments, with tariffs approved for 2026 on more than 1,400 products from countries with which it has no free trade agreement.

The scale of the regional opportunity was estimated back in 2022. According to the IDB, nearshoring could add US$ 78 billion a year in goods and services exports for Latin America and the Caribbean in the short and medium term, with quick openings in automotive, textiles, pharmaceuticals and renewable energy. The largest gains would go to Mexico and Brazil, with roughly US$ 35.7 billion and US$ 7.8 billion in additional goods exports respectively.

The estimate is not a guarantee; it is a ceiling. The distance between potential and realized depends on infrastructure, stable rules and installed productive capacity.

Second sign: the subsoil became a geopolitical asset

The second sign lies underground. The energy transition and the expansion of digital infrastructure depend on copper, lithium, graphite and rare earths, and Latin America holds a significant share of those reserves. ECLAC estimates the region holds 46% of the world’s lithium reserves, 35% of copper, 28% of graphite and 23% of rare earths. In a setting where the major economies are working to secure access to strategic raw materials, those resources gain economic and diplomatic weight.

That interest is already translating into capital. Citi estimates indicate the region received around US$ 3.2 billion in mineral exploration investment in 2025, equivalent to 26% of the global total, with Chile the leading destination.

The critical point sits in the next link of the chain. Latin America remains stronger in extraction than in refining and processing, while China controls between 60% and 80% of global refining capacity for lithium, cobalt, graphite and rare earths. One figure illustrates the gap: Chile refines about 1.7 million tonnes of copper; China processes roughly 14 million.

The question for the region, therefore, is not whether it will matter in critical mineral chains, but at which stage that relevance will be exercised. Extraction generates revenue; processing generates industrial capacity, skilled employment and bargaining power. That frontier decides how much of the value of the rearrangement stays in the region.

Third sign: capital is changing origin and destination

The third sign appears in investment flows. According to ECLAC, foreign direct investment in Latin America and the Caribbean grew 1.7% in 2025, reaching US$ 194.2 billion, equivalent to 14% of gross fixed capital formation and 2.8% of regional GDP. The modest growth conceals meaningful internal movement. Brazil received 40% of the total, with flows close to the highs of the 2010s, while Mexico, at 22%, recorded its third-largest amount since 1990.

The origin of capital also shifted. The United States remained the leading investor at 35% of the total, but flows from that origin fell 11% in 2025, while European investment rose to 32%. ECLAC itself notes that the impact of changes in US tariff policy on investment in the region is highly heterogeneous across countries and sectors.

In parallel, trade with Asia continued to expand. Data from China’s General Administration of Customs show exchange with Latin America reached around US$ 565 billion in 2025, growing 6.5%, above the pace of Chinese foreign trade as a whole. Meat, soy and minerals such as copper accounted for much of that expansion.

What the three signs say together

Read together, the three signs describe a region that no longer holds a single position in global chains but several at once. For North America, Latin America is a proximity platform. For Asia, a supplier of food and minerals. For Europe, a growing destination for capital.

That multiplicity is both an opportunity and a complication. ECLAC proposes a flexible strategy in the face of competition between large blocs: rather than aligning fully with one side, building different partnerships depending on the sector or the objective.

The rearrangement also does not benefit the region evenly. Mexico and Brazil concentrate most of the capital and the nearshoring potential; Chile, Peru and Argentina stand out in minerals; countries in Central America and the Caribbean compete for niches in services, medical devices and logistics. Each economy faces its own question about where to fit and how hard to push. According to ECLAC, the region continues to struggle to integrate trade, investment and productive development agendas coherently, which limits the transformative impact foreign investment could have.

For companies operating in the region, the new map demands finer reading. The question is no longer only “where do we produce most cheaply” but also “where do our inputs come from”, “which tariffs is each route exposed to”, “which rules of origin apply” and “which trading partner sustains demand in each category”. Chains that looked stable can be redrawn by a tariff decision; categories that looked marginal can become central through a strategic supply requirement.

The rearrangement of global chains is not a one-off event. It is a continuous process, with advances, reversals and adjustments. Latin America enters it with assets the world is looking for: proximity, resources, food, energy and productive capacity. What remains open is how much of that value will be turned into a durable position. And that answer will depend less on the map than on the ability to read the signals before they become consensus.

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