Latin America is at the centre of competition between the US and China. Beijing has heavily invested in natural resources, infrastructure and manufacturing under its Belt & Road Initiative (BRI), and the Trump administration has already moved to curtail this. In March, it forced a deal to transfer two ports on the Panama Canal from Hong Kong’s CK Hutchison to US asset manager BlackRock.
Alongside Panama, neighbouring Costa Rica was one of five countries in the region visited by Marco Rubio, the first Hispanic US secretary of state in history, on his first international trip in early February 2025. Mr Rubio also visited El Salvador, Guatemala and the Dominican Republic, on a mission to counter China and further the fight against drug trafficking and illegal migration.
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Manuel Tovar, who has served as Costa Rica’s minister of foreign trade since May 2022, argues that Mr Rubio’s choice of first trip showcases the importance the new US administration attaches to Central America. “It was a huge statement to the region,” he told fDi in London, a week after meeting Mr Rubio in Costa Rica.
During a “very positive visit”, Mr Tovar said they discussed Costa Rica’s relationship with the US, which is by far its largest trading partner and source of capital flows and tourists. Also discussed was collaboration with the US and European ports to stop the transhipment of narcotics through Costa Rica, which has deployed US technology to scan exports from its sea and airports.
In its process of deploying 5G networks, Mr Rubio has “supported the government of Costa Rica in our challenging efforts to exercise telecom sovereignty”, added Mr Tovar, in reference to an ongoing spat with Chinese telecoms giant Huawei.
‘Excessive and atypical pressure’
Huawei was first awarded contracts in January 2009 by the Instituto Costarricense de Electricidad (ICE), Costa Rica’s state-owned telecoms provider, to deploy 3G networks in the Central American country. But in recent years, the Chinese telecoms giant has been criticised for its approach to securing 5G contracts.
“We’re concerned about the atypical and excessive pressure [Huawei] is exercising in our country,” said Mr Tovar. “Whenever a company faces some challenge, they exercise their diplomatic protection to some extent, but not making it an affaire d’état as the government of China has done.”
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In August 2023, Costa Rica banned companies from countries that have not signed the Budapest Cybercrime Convention from being 5G providers, effectively blocking Huawei as a Chinese firm from 5G contracts. In April 2024, Huawei reportedly hosted an exclusive party for at least 70 ICE employees, including a Costa Rican official in charge of public contracts. This has raised concerns about conflicts of interest and possible corruption in the procurement process.
“In my nearly three years as trade and investment minister, I’ve never seen a foreign government push so hard, or even push to some limits, as the Chinese government has done with Huawei to be awarded a specific bidding process,” said Mr Tovar, noting that this shows that “the line is very thin” between Huawei as a private company and the Chinese communist party.
Chinese firms have announced just six greenfield FDI projects in Costa Rica with about $10m of capital expenditure since the BRI was launched in September 2013, according to fDi Markets. This is a drop in the ocean compared with activity in larger countries like Mexico ($26.2bn), Brazil ($18.1bn) and Argentina ($11.8bn), where Chinese investors have set out big plans in minerals, electric vehicle manufacturing and infrastructure.
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Where is the WTO?
In May 2025, Costa Rica is due to host the OECD’s ministerial council meeting held in Paris. At a time of economic coercion and a fraying multilateral order, Mr Tovar says that Costa Rica has to be “pragmatic” in its role in getting countries to reach agreements because the effectiveness of the World Trade Organisation has frayed.
“The governance of the WTO needs to be revised. Just one country can block the whole thing … it has become very difficult to strike a deal,” said Mr Tovar in reference to the need for consensus with 166 members for the WTO rulebook to be changed. But despite issues with the multilateral system, Mr Tovar remains an advocate of the international rules-based order.
“Costa Rica is not stopping. We’re not waiting for the sunshine. We are striking deals. We continue to open our markets,” he concluded, noting Costa Rica’s efforts to join the Latin American regional trade bloc the Pacific Alliance and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade agreement between the UK and 11 Asia-Pacific countries.