The New Cold War of Trade, Tech and Minerals

Rio Times · Analysis

Key Facts

—The New Cold War Frame Scholars and policymakers increasingly describe current geopolitics as a ‘new Cold War’ where the US and its allies compete with China and Russia, forcing smaller states to hedge their bets.

—Latin America as Swing Region A Peruvian defence study concludes Latin America now plays an essential role in the global strategic competition, becoming a theatre for influence operations, investment deals and military positioning.

—The BRI Factor Twenty-one Latin American nations have signed up to China’s Belt and Road Initiative, with Chile, Costa Rica, Ecuador and Peru also holding formal free-trade agreements with Beijing.

—Commodity Superpower Potential CSIS argues Latin America could become ‘this century’s commodity superpower’ given its reserves of lithium, copper, food and renewable energy, assets that every bloc now covets.

—Triple Circulation Strategy A regional economic framework envisions combining domestic market expansion, deeper regional integration and global diversification to escape old centre-periphery dependency patterns.

—The Venezuela Wildcard US intelligence assessments warn of continued violent instability in Venezuela, with the country serving as a flashpoint where great-power competition and regional fragility intersect dangerously.

Latin America is no longer a distant observer of big-power rivalries—it is the main stage where Washington, Beijing and Moscow are converging over lithium, food, trade routes and strategic allegiance, forcing the region to choose between keeping all doors open, picking a side, or forging its own united path.

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The ‘New Cold War’ Is Not a Metaphor: It Is a Structuring Reality

The phrase ‘new Cold War’ has moved from academic journals and think-tank panels into the daily work of foreign ministries around the world. It describes a world where the US-led alliance system and a China-Russia axis compete across trade, technology, military power and information all at once.

SIPRI’s 2026 Yearbook is blunt: 2025 was shaped across all regions by escalating armed conflict, great-power competition, a fragmenting world order and climate-driven insecurity, a cocktail that leaves no corner of the planet untouched.

Unlike the original Cold War, this contest is not a simple two-sided standoff. Middle powers from India to Brazil to South Africa are manoeuvring in the gaps, keeping loyalties flexible and alliances ambiguous to avoid being trapped in a patron’s fight or left alone without a protector.

An international affairs conference scheduled for 2026 explicitly frames the moment around this ‘new Cold War’ idea, noting that smaller and middle states now routinely spread their bets, playing blocs off against each other to maximise autonomy.

In the Americas, the US has attempted to reassert regional hegemony against Chinese competition through economic and political pressure and even military intervention in Venezuela, signalling that Washington still views the hemisphere as its strategic backyard.

Latin America thus enters this contest not as a passive prize but as a region whose resources, markets and diplomatic votes have suddenly become items of intense competition.

The Lithium Triangle and the Great-Power Mineral Scramble

There is a reason why the salt flats of northern Chile, Argentina and Bolivia are attracting more geopolitical attention than at any time in history: together they hold between 50 and 60 percent of the world’s known lithium reserves, the irreplaceable input for electric-vehicle batteries and grid storage.

Add Latin America’s dominance in copper—Chile and Peru alone supply a massive share of global production—plus nickel in Brazil, and you have a concentration of critical minerals that makes the Middle East’s oil geography look almost casual.

China has moved aggressively to secure access, with state-backed companies investing across the Lithium Triangle and integrating extraction into its Belt and Road network, a strategy that alarms Washington and Brussels in equal measure.

The US and European Union are scrambling to respond with their own investment frameworks and partnership agreements, but they arrive with higher environmental and labour standards that, while admirable, move more slowly than Beijing’s cheque-writing.

This is not just about mining; it is about who controls the supply chains for the technologies that will define the next century—electric vehicles, AI data centres, renewable-energy storage—and Latin America sits at the bottleneck.

The region’s challenge is to avoid being reduced to a quarry for competing blocs, instead building its own refining, processing and manufacturing capabilities that capture value beyond the extraction phase.

The Food-Energy Nexus: Why the World’s Tables Depend on the Pampas

As the Russia-Ukraine war demonstrated with brutal clarity, concentrated food production is as much a strategic vulnerability as concentrated oil production, and Latin America is the world’s most important diversified food exporter.

By 2030, the region is forecast to account for 18 percent of global food exports, with Brazil, Argentina, Paraguay and Uruguay forming a soybean-beef-corn-sugar complex that feeds Asia’s growing middle classes and Africa’s urbanising populations.

Ilan Goldfajn, president of the Inter-American Development Bank, identifies energy, environment and food production as three areas where Latin America can be a world player, a formulation that is gaining traction in capitals from Tokyo to Riyadh.

The new Cold War transforms food from a trade commodity into a diplomatic instrument: countries that can guarantee grain and protein supplies in a crisis earn political capital that extends far beyond the agricultural sector.

China’s deep engagement with Brazilian agribusiness is no accident; it is a strategic bet on food security that simultaneously reduces Beijing’s vulnerability to US naval blockades and builds a constituency for Chinese interests within Latin America’s largest economy.

This dynamic forces Washington to compete not just on security and ideology but on the granular economics of soymeal and poultry, a competition it is not always well-structured to win.

BRI vs. Nearshoring: The Competing Maps of Latin American Integration

Twenty-one Latin American and Caribbean nations have signed memoranda of understanding with China’s Belt and Road Initiative, a number that reflects both the region’s infrastructure hunger and Beijing’s strategic patience in building long-term relationships.

Chile, Costa Rica, Ecuador and Peru have gone further, signing formal free-trade agreements with China that lock in preferential market access and create constituencies of exporters with a vested interest in stable Sino-Latin American relations.

The US counter-offer is different in nature: it leans on nearshoring—the relocation of supply chains closer to North American consumers—and friendshoring, the idea that trade should preferentially flow between politically aligned nations.

Mexico is the textbook case, benefiting massively from US companies moving production out of Asia, but the Trump administration’s reported consideration of designating Brazilian drug cartels as terrorist organisations shows how security concerns can complicate even the most compelling economic logic.

Sub-regional frameworks like the Pacific Alliance and Mercosur add further complexity, creating overlapping and sometimes contradictory trade rules that make it hard for Latin America to present a unified negotiating front to either Beijing or Washington.

The ‘triple circulation’ concept—expanding domestic markets, deepening regional integration and diversifying global ties—offers an intellectual framework for escaping this binary trap, but implementing it requires political coordination that has historically been scarce.

The BRICS Expansion and the Allure of a Non-Aligned Path

The expansion of BRICS—originally Brazil, Russia, India, China and South Africa, now welcoming new members—has created a parallel diplomatic and financial architecture that appeals to many Latin Americans tired of being lectured by Washington or Brussels.

Brazil, as a founding BRICS member, sits at the intersection of this new geometry: it is deeply tied to China through trade, maintains complex relations with Russia, and yet is also a traditional US partner and the host of the upcoming COP30 climate summit.

South-South trade now accounts for a significant share of global commerce, with UNCTAD reporting that the Global South generates 40 percent of world goods trade and over 70 percent of expected global economic growth over the next five years.

For Latin American countries chafing under US sanctions or conditional lending from the IMF, the BRICS alternative—however imperfect—offers a narrative of dignity and autonomy that resonates politically, even if the economic substance remains uneven.

The challenge for the region is to ensure that BRICS engagement does not simply swap one dependency for another, trading Washington’s tutelage for Beijing’s, without building the internal productive capacity that makes genuine autonomy possible.

A genuinely non-aligned Latin America would need its own agenda—on debt, on climate finance, on technology transfer—and the institutional machinery to pursue it collectively, something that remains more aspiration than reality.

Venezuela and the Hard Edge of Great-Power Competition

If the new Cold War is an abstraction in most Latin American capitals, it is a bleeding, tangible reality in Venezuela, where US intelligence assessments warn of continued economic collapse, humanitarian suffering and violent instability.

The US has demonstrated its willingness to intervene militarily in Venezuela, a move that sends a signal to the entire hemisphere about the limits of Washington’s tolerance for hostile regimes near its borders.

China and Russia, meanwhile, have propped up the Maduro government with loans, oil-sector expertise and diplomatic cover, partly for ideological reasons but mostly because Venezuela’s vast oil reserves—among the largest in the world—are a strategic prize in any long-term energy competition.

This triangulation traps Venezuelans in a nightmare that is not of their making but is sustained by external powers’ unwillingness to let go of a country that sits on such massive hydrocarbon wealth.

The Venezuelan crisis also serves as a warning to other Latin American states: in a world of great-power competition, internal fragility becomes an invitation to external manipulation, and the line between domestic political crisis and geopolitical flashpoint can vanish overnight.

For the region’s diplomats, Venezuela is the hardest test of whether Latin America can develop a collective security and political mediation capacity that reduces the need for outside powers to intervene—or whether it will remain a theatre where others fight their wars.

COP30 as a Global Stage: Brazil’s Moment to Shape the Rules

When Brazil hosts COP30, it will do so not as a supplicant but as a nation that sits at the nexus of the world’s most urgent conversations: climate, energy, food and the governance of critical resources.

UNCTAD frames COP30 as a crucial summit for advancing an equitable energy transition that reduces inequality and expands opportunities—a framing that Latin America can champion because its own renewable-energy advantages give it credibility.

Brazil’s position as both a fossil-fuel producer and a renewable-energy leader mirrors the global dilemma: the transition must be managed, not wished into existence, and the social costs must be addressed alongside the technological changes.

The summit will also test whether Latin America can articulate a unified position on carbon markets, climate finance and technology transfer, or whether it will fragment into national delegations each cutting their own deals.

A successful COP30 would cement Latin America’s reputation as a constructive rule-maker in the global order; a failed one would reinforce the narrative that the region cannot translate its natural endowments into diplomatic influence.

The fact that this summit occurs against the backdrop of an energy crisis sparked by the Hormuz stand-off only heightens the stakes: the world will be watching to see whether Latin America can offer a vision of stability that the Middle East and Eastern Europe currently cannot.

Strategic Choices: Hedge, Align or Unite

Latin America faces three broad strategic paths in this new Cold War, and the choice between them will define the region’s prosperity and autonomy for a generation.

The first path—keeping all doors open by maintaining flexible relations with every power and pulling investment and trade from all directions—is the default option. It has served countries like Brazil and Chile reasonably well, but it leaves the region vulnerable to being picked off piecemeal in moments of crisis.

The alignment path—choosing one bloc definitively—is unlikely to be adopted wholesale by any major Latin American nation, but creeping alignment can happen by default if economic dependencies deepen to the point where choice is illusory.

The unity path—building a genuinely coherent regional actor that can negotiate collectively with Washington, Beijing and Brussels—is the most ambitious and the most difficult, requiring a degree of political coordination that has eluded the region since Bolívar’s dream faded.

The ‘triple circulation’ framework, the BRICS membership of Brazil, the renewed attention from both the US and China, and the approaching COP30 all create an unusual alignment of incentives for pursuing the unity path more seriously than at any time in recent memory.

The question is whether Latin America’s leaders can see beyond the immediate pressures of electoral cycles, commodity booms and bilateral deals to build institutions that outlast their governments—or whether the new Cold War will find the region as divided and pliable as the old one did.

Frequently Asked Questions

Is the ‘new Cold War’ really comparable to the original Cold War?

Both are defined by great-power rivalry between a US-led bloc and a challenger bloc, but the new version is more multipolar—with China, Russia and an expanded BRICS—and is fought more through economic, technological and information means than through direct military confrontation, though armed proxy conflicts remain present.

Why is Latin America suddenly so important in global geopolitics?

The region holds over half the world’s lithium reserves, is the largest net food exporter, has a renewable-heavy electricity grid, and is geographically positioned for nearshoring supply chains. In a world of fragmented trade, resource competition and climate urgency, these assets make Latin America indispensable to multiple competing blocs.

Can Latin America really unite to play a bigger global role?

It faces significant obstacles—ideological divisions, weak regional institutions, organised crime, and the gravitational pull of bilateral deals with great powers—but the strategic costs of disunity are rising, and frameworks like the ‘triple circulation’ model and the momentum towards COP30 offer a rare alignment of incentives for collective action.

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