+569 Letters From Chile: Could Chile Impose tariffs on US Imports?
By JORGE GARRETÓN
Chile has a trade deficit with the United States, which has President Gabriel Boric, along with the country’s political and business class calling for tariffs to be imposed on US imports to the country, to improve Chile’s economic competitiveness.
Irony aside, Chile has been running a commercial trade deficit with the US for a long time. Just this past two years, the United States exports to Chile, according to figures published by the Vice-Ministry of International Economic Relations. As of 2023, the US has a trade surplus of US$ 1.357 Billion, down from the year previous where imports from the United States, totalled US$ 6.689 Billion US trade surplus.
The bilateral trade balance is in favour of the United States. Hence using President Donald Trump language as he spoke to the media Thursday, Chile is helping the US reach the long-term objective of making “our country a fortune.”
Chile to date, has maintained low visibility in regards to the Trump Administration. One could argue, as the country Chile, has for a long time moved away from the US sphere of influence, unlike Colombia or Central America and Mexico.
As part of its international trade policy, diversification of the export driven economy is by far the most successful part of Chile’s foreign relations, as it no longer depends on one major economy or another.
This economic independence from the US or Europe or China, has allowed Chile to play a more independent role in developing multilateral global institutions. Chile will not leave the World Health Organization, nor utter disparaging remarks on the Paris Accord on Global Warming. In fact, Chile is moving fast to meet its carbon neutrality goals ahead of 2050.
Bilateral Trade Between Chile USA Figures in US$B
Year 2020 Imports 9.747Exports 9.788 Deficit/Surplus 41
Year 2021 Imports 15.143 Exports 15.002 Deficit/Surplus -141
Year 2022 Imports 20.298 Export s13.610 Deficit/Surplus -6.689
Year 2023 Imports 15.761 Exports 14.404 Deficit/Surplus -1.357
Figures from Vice-Ministry of International Economic Relations
As a bit of information, National Risk Prevention and Disaster Service, has held to date two meetings to ensure the country is prepared when and if avian flu arrives in Chile. According to the Service, Avian Flu is delayed by months, it was supposed to have arrived with migrating birds. But migrating birds have yet to arrive.
The Vice-Ministry of International Economic Relations, 2024 export report says the US is the second largest market for Chilean exports totalled 16,1%, during this past year. The main exports were copper cathodes, salmon, services, fresh grapes, tires, construction wood panels and fresh blueberries.
China accounted for 37.3% of all exports last year, exports to Japan totalled 8.1%. The report says 95.9% of all exports were to markets Chile has standing free trade agreements, like the European Union which in 2024, exports accounted for 13.4%.
Chile has successfully decoupled from the United States, which cannot be said with other regional economies, like that of Colombia. The reason why President Gustavo Petro was forced to backpedal, when he tried to stop the transfer of Colombian deportees from the US in shackles and chains.
What is surprising however, is the lack of support President Petro received from Colombia’s political, business class and corporate media. In Chile this could have never happened. The lack of national unity, particularly expressed by former president Iván Duque, who described Petro’s action “an act of great irresponsibility”, because it endangers the commercial and political relations between both countries. Duque described Petro’s action as a “populist ego driven decision while facing United States national security decisions, which could have grave cost to Colombia.”
Despite Duque and the economic and political elite subservience to Washington, two other former Colombia presidents Ernesto Samper and Juan Manuel Santos, showed support to Petro for his position in the treatment of Colombian deportees being sent back to Bogotá shackled. Also they called for moderation from the US.
Such public debate to date could not happen in Chile. As the country when its government is pushed or attacked in the international arena, there is one national voice in defence of the national interest irrespective of political positions.
The Colombia example of political actors, like Duque, who show subservience to Washington power or money, can also be found in Argentina’s Javier Miley El Salvador’s Nayib Bukele and Daniel Noboa of Ecuador who is facing a tough reelection fight against left wing candidate Luisa González in April’s runoff vote.
In Mexico, which is highly integrated to the North American economy, President Claudia Sheibaum, on Trump Administration tariffs imposed on the country, has instructed to begin the steps for a rapid decoupling from the US and Canadian economies, in order to begin diversifying its exports to other economies.
One can argue that Chile is achieving economic independence by having had the fortune in the 1990s of diversifying its economic relations, by having signed 34 free trade agreements with 65 global economies that represent 88% of the world’s GDP.
Another area Chile is seeking its independence is in energy, but that is another topic to be explored in another posting.
On a Personal Note
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