Why It Matters

Chile’s growing importance to U.S. critical mineral supply chains is colliding with trade tensions and China’s expanding economic influence, complicating Washington’s efforts to strengthen its strategic partnership with Santiago.

A Congressional Research Service (CRS) report on U.S.-Chile relations, published September 1, examines a partnership strained by trade policy disagreements and competing strategic interests. The report identifies Chile as a key partner for developing secure critical mineral supply chains, however tariffs imposed on Chilean imports have raised questions among some members of the Kast administration and other Chilean observers about the reliability of the United States as a partner.

The Big Picture

Chile ranks first in refined copper production and reserves, third in lithium production, first in lithium reserves, and first in rhenium production and reserves. The U.S. imports 57 percent of its refined copper consumption, with 68 percent of those imports coming from Chile, and imports more than 50 percent of its lithium consumption, with 54 percent of those imports coming from Chile. Despite these strategic ties, a 12.5 percent Section 301 tariff affects 943 products representing 40.3 percent of U.S. imports from Chile, according to the Chilean government. The tariff exempts 336 products representing 53.6 percent of U.S. imports from Chile, including refined copper cathodes and lithium, but affects products including salmon and bottled wine.

Chinese companies have invested more than $21 billion in Chile since 2006, with State Grid Corporation of China spending more than $5.2 billion to acquire two Chilean electricity distributors. U.S. officials have raised concerns that investments from China in strategic sectors and the use of equipment from China-based companies in critical infrastructure could compromise Chile's national security, intellectual property and data privacy.

A memorandum of understanding on critical minerals cooperation between the U.S. and Chile was signed in April. The DFC Modernization and Reauthorization Act of 2025 lifted a prohibition on U.S. International Development Finance Corporation support for projects in high-income countries like Chile under certain conditions, and the DFC has since sought to mobilize private capital for investments in critical minerals and strategic infrastructure projects there.

The Bottom Line

The Kast administration has stated that it intends to maintain close ties with both the U.S. and China. Chilean Foreign Minister Francisco Pérez Mackenna has characterized the U.S. as Chile's main strategic partner while also describing China as a key partner and arguing that deepening relations with China is in Chile's long-term strategic interest.

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