Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: Chinese firm BYD reshapes Brazil’s auto industry, Argentine health officials race to find the origins of the hantavirus outbreak on a cruise ship, and the United States indicts a Mexican governor.
BYD’s Brazil Breakthrough
Last year, in one of Brazil’s most popular soap operas, a billionaire gifted her boyfriend a car: the BYD Song Pro. Her chauffeur drove a more affordable BYD model. This was not a coincidence, but the result of a product placement campaign to reshape perceptions of the Chinese automaker.
Chinese cars used to have a negative reputation in Brazil, and electric cars were often met with skepticism, BYD Senior Vice President for Brazil Alexandre Baldy said on a podcast this year. The company’s extensive publicity campaign aimed to change that.
It appears to be working: In April, BYD became the best-selling car brand in Brazil’s retail market for the first time. Though the company has yet to lead in annual sales, these figures point to a broader trend in both Brazil’s auto market and China’s industrial footprint in Latin America.
Chinese investment in Brazil’s auto sector reached nearly $1 billion last year, according to the Brazil-China Business Council. This influx has supported BYD’s new manufacturing hub in the state of Bahia, which the company says has already received orders to export 50,000 cars each to Argentina and Mexico.
China’s growing economic presence in Latin America has drawn concern from successive U.S. administrations, and U.S. President Donald Trump has urged countries in the region to reject closer ties with Beijing.
Brazil, by contrast, has largely treated Chinese engagement as an opportunity. “China is Brazil’s best partner today,” Brazilian President Luiz Inácio Lula da Silva said while discussing trade in March, even as he has sought to maintain positive relations with the United States. That balancing act was on display when he met with Trump at the White House on Thursday.
Yet Brazil’s debate over ties with China is not black and white; it increasingly centers around the terms of that relationship. In the auto sector, government officials, unions, and industry associations have varying priorities regarding local hiring requirements and working conditions.
BYD’s expansion in Brazil has generated controversy. In late 2024, Brazilian labor inspectors found that Chinese workers were being held in conditions similar to “slavery” at the BYD construction site in Bahia. Brazil sued the company and its contractors, construction was temporarily halted, and the defendants agreed that the contractors would pay $7.5 million in damages.
Tensions resurfaced in April, when a Brazilian labor official was fired after placing BYD on a government blacklist of companies accused of slave labor. The Labor Ministry has removed BYD from the list while the company challenges the designation in court; BYD blames one of its contractors for the abuses.
Two associations of labor inspectors said the official’s firing was political retaliation for blacklisting BYD, an allegation that Brazilian Labor Minister Luiz Marinho denies.
Another source of friction is the question of whether BYD is actually building up Brazil’s industrial sector or undercutting local jobs and technological capacity by importing partially or fully assembled cars from China. In January, pressure from a Brazilian auto association prompted the government to revoke tax breaks for partially assembled vehicle imports, incentivizing the use of locally sourced parts.
Baldy, the BYD official, said the company is already moving in that direction. By the end of this year, he said in February, half of the parts in its cars assembled in Brazil will come from Brazilian suppliers.
More than 3,000 Brazilians work at BYD’s Bahia factory, and the company has said that number will soon double. If so, the site would directly employ more workers than the Ford plant that operated there until 2021. The local metalworkers’ union has negotiated a higher base salary than what Ford paid, though their contract lacks the same expectation of future wage increases.
“Many countries are dealing with a similar kind of policy dilemma that Brazil has been dealing with,” said Benjamin Bradlow, a Princeton University professor researching green industrial transformations in the global south. “When do you switch off the encouragement to imports so that you can start getting local production?”
Not every country has a large enough consumer market to persuade foreign firms to set up shop locally, Bradlow said. But Brazil is starting to experience “a meaningful localization process.”
Friday, May 8: Laura Fernández is sworn in as president of Costa Rica.
Tuesday, May 12: The Bahamas holds a general election.
Sunday, May 31: Colombia holds a presidential election.
Antigua and Barbuda Prime Minister Gaston Browne waves in Caracas on Jan. 10, 2025.Federico Parra/AFP via Getty Images
