As competition between the United States and China intensifies, Latin American countries face a consequential question: Align with one global power or try to work with both? The region has longstanding economic, political and cultural ties to the U.S., while China has become an increasingly important trading partner and investor.
The question became the focus of an online debate organized by the Strategic Management Society’s Global Strategy Interest Group in April 2025. FIU Business professor Sumit Kundu, then program chair of the group, saw an opportunity to examine what growing geopolitical divisions could mean for economic development in Latin America.
“Geopolitical fragmentation has been happening around the world, and Latin America is no exception,” said Kundu, professor of international business and James K. Batten Eminent Scholar Chair in International Business. “Politics and economics are the flip side of the same coin.”
Kundu and William Newburry, professor of international business and Ryder Eminent Scholar of Global Business at FIU Business, are among eight scholars from universities in the United States and Latin America who contributed to the resulting perspective article, “Debating political alignment and economic development in Latin America during the new geopolitical era,” published in the International Business Review in July 2026.
The debate centered on two competing views. One argues that Latin American countries should preserve their strategic autonomy, strengthening their economies while maintaining relationships with multiple global powers. The other contends that closer alignment with the United States can provide greater stability, investment and access to markets.
Newburry sees advantages to closer U.S. alignment, particularly given the longstanding economic and cultural connections between the United States and Latin America. Those ties, he said, make true neutrality difficult even as countries expand trade with China.
“It’s a different relationship,” said Newburry. "There is a highly ingrained interconnection between the U.S. and Latin America."
China, meanwhile, has invested in infrastructure across the region and become a major buyer of commodities and natural resources. While those relationships bring economic benefits, Newburry said the longer-term question is whether countries can continue building more advanced capabilities rather than remain primarily suppliers of raw materials.
“Does trading with China hold them back? It’s an unknown factor,” he said.
Kundu sees another complication: Latin America is often discussed as a single region, but its countries have their own political and economic dynamics. Brazil and Mexico, the region’s largest economies, face different considerations than smaller countries that depend more heavily on foreign markets, investment and trade.
Those differences are playing out as both the U.S. and China seek greater influence in the region. Kundu pointed to Chile’s copper and the lithium reserves of Argentina and Bolivia as examples of resources attracting global interest, as well as China’s growing investment in Latin American infrastructure.
“Small markets have to rely on foreign countries,” Kundu said. “Both China and the U.S. are very interested in Latin America. Some small countries couldn’t appease both.”
That tension ultimately led the scholars beyond the two positions presented in the original debate. As they developed the article, another idea emerged: betweenness, or operating between competing geopolitical systems.
“Both arguments are very solid and stand on their own ground,” Kundu said. “Where the new thinking wasn’t in the debate — it came out much later — is betweenness.”
Newburry describes the dilemma in practical terms.
“Is it good to be between two superpowers, or does it cause problems?” he said. “Can you take advantage of connections between the two — more options, more access to different markets, be a bridge between them? Or does it create more tension, more political rifts?”
Businesses face a similar trade-off. Operating across competing systems can bring political and regulatory challenges, but also access to different markets, resources and opportunities.
Kundu sees the potential for countries as well. Rather than treating relationships with the U.S. and China as an either-or decision, they may be able to engage with both while protecting their own economic interests.
“Both have pluses and minuses,” Kundu said. “A person proactively thinking should find a common ground to engage in both systems.”
Ultimately, he described the challenge in simpler terms: “It’s a balancing act.”