Introduction
While the Asia-Pacific region is the primary focus for the intensifying Sino-US great power peer competition, systemic pressures from this competition are now proliferating across the globe, calling into question secondary states’ unit-level coping responses.Footnote 1 A major factor in the Sino-US peer competition is the contest for influence over regions, albeit chiefly for regionally significant states that are geopolitically pertinent to both Beijing and Washington’s wider strategies.Footnote 2 Winning influence in the Sino-US peer competition is of paramount importance; the competition will shape the future of international politics as these great powers seek to ‘win the twenty-first century’.Footnote 3
Considering the importance of system-level pressure and unit-level coping responses, a system–unit level analysis is particularly useful for analysing the contest for influence.Footnote 4 To understand the dynamics of a system–unit level analysis vis-à-vis system-level pressure and unit-level coping responses, Arnold Wolfers’ metaphor of the ‘house on fire’ helps simplify these crucial international relations concepts, where individuals, analogous to states (units), find themselves in a house (system) that is on fire (system pressure), compelling individuals to react and make decisions on how best to cope.Footnote 5 As such, system-level pressure is related to the tension generated by the great power competition between China and the United States, and unit-level coping responses refer to how secondary states respond to such pressure. The terms ‘great power(s)’ and ‘secondary state(s)’ refer to an ontological difference in the inherent hierarchy of international politics. Great powers, with their superior material capabilities, geostrategic reach and status can exert significant influence on global affairs, whereas secondary states (often interchangeably referred to as small or middle powers in international relations discourse) lack such means and therefore have more limited influence. While recent academic studies have provided analysis on a range of states from regions such as Oceania, Southeast Asia, Central Asia, Africa and Europe, Latin America has received lacklustre scholarly attention vis-à-vis coping responses amid the Sino-US great power peer competition, largely due to its locus being situated far from the immediate geopolitical and geo-economic throes of the competition.Footnote 6 Nevertheless, Latin America is also identified as a potential arena for great power competition, as China has used economic statecraft – defined by David Baldwin as the use of economic means to achieve foreign policy objectives – to court key regional states, wherein the fungibility of its economic power could potentially undermine Washington’s long-held hemispheric hegemony in both the economic and security spheres.Footnote 7 With regard to these circumstances, Brazil is recognised as having the greatest potential to act independently in international politics (agency) within the region and is the leading benefactor of economic engagement with China, making it the most relevant state to illustrate hedging behaviour as a coping response vis-à-vis the great power competition.Footnote 8 In terms of coping responses, hedging behaviour in international politics broadly refers to efforts to ‘cultivate a middle position that forestalls or avoids having to choose one side at the obvious expense of the other’.Footnote 9 Despite the intensifying systemic pressure now facing the Asia–Pacific and thus impacting the hedging space available to Asia-Pacific secondary states, Latin American states retain a larger space for hedging behaviour presenting an opportunity to play China and the United States off one another for leverage and bargaining power. However, Brazil’s hedging behaviour has displayed oscillating tendencies under different governments, a characteristic normally associated with states facing higher systemic pressures.
To evaluate Latin America’s hedging paradigms, this paper poses the questions of how the Sino-US peer competition impacts Brazil’s hedging strategy, and why coping behaviours differ on various indices from the administration of Luiz Inácio Lula da Silva to that of Jair Bolsonaro. By examining case studies and analysing official government documentation, including presidential speeches, guidelines for foreign policy, memorandums, white papers and press releases, we assess key signals from policy practitioners and elites regarding Brazil’s foreign policy and relations, with specific reference to keyword search combinations that include China, the United States and Latin America, as well as terms that indicate factors of cooperation or risk in economics and security, thereby aiding the analysis of how Brazil’s coping behaviours vary under different administrations. Operationalising official government documentation provides authoritative source material, as well as direct insights into how administrations articulate foreign policy and signal interests over time. To borrow from Xiaoyu Pu, key signals or signalling ‘uses a subset of signals to convey the information that a state is asserting a particular standing’ towards a state-to-state relationship, event or issue.Footnote 10 Brazil’s differing administrations, here taken as our case studies, range from the left-wing Partido dos Trabalhadores (Workers’ Party, PT) era, encompassing the Lula and Dilma Rousseff periods (2003–16), to Michel Temer’s transitional period (2016–18) and the Bolsonaro administration (2019–22), the latter two acknowledged as right-wing.Footnote 11 The use of case studies allows the analysis to systematically frame and identify phenomena in relation to the administrations’ respective signalling, and thus interpret changes in Brazil’s coping responses that are context-specific. Crucially for contextualisation of the analytical parameters, left-wing administrations in Latin America often pursue post-hegemonic or anti-US foreign policies, leading them to pivot towards great power alternatives or competitors that can offset the costs of shifting away from the US sphere of influence. Conversely, right-wing administrations typically prioritise increased engagement with the United States, valuing its security benefits and thereby reinforcing Washington’s regional supremacy.Footnote 12 The timing of the case studies aligns with China’s increased efforts to influence Brazil, alongside the evolution and intensification of the Sino-US peer competition that is now extending into Latin America. These developments provide Brazil with opportunities to maximise its leverage by playing Beijing and Washington against each other for strategic benefits. Acknowledging and integrating the context of these administrations’ Left–Right swings, this paper examines how Brasilia has operationalised hedging by engaging with Beijing for economic opportunities while simultaneously seeking various security guarantees from Washington. These adjustments reflect a calculated degree of engagement with China, the region’s major alternative politico-economic partner. Therefore, this paper expounds upon four determinants of Latin America’s hedging indices: (1) geopolitical proximity; (2) agency; (3) institutional effectiveness; and (4) domestic pressures. Positioned within the western hemisphere, Latin America’s geopolitical features and constraints bestow the profile of a key player in the wider Sino-US peer competition. Hence, the crux of the hedging paradigm reveals non-systematic causal forces.
The paper is structured as follows. First, the literature review explores Beijing’s relatively recent politico-economically motivated engagement with Latin America, widely acknowledged as Washington’s ‘Latin American backyard’ and a US-dominated western hemisphere, in the context of the Sino-US peer competition. Whereas the United States took its quasi-omnipresence and supremacy for granted during its unipolar period, China has appeared to fill emergent economic gaps while expanding into the political arena, proliferating the great power competition for regional influence, as omnidirectional engagement from key regional secondary states is becoming apparent.Footnote 13 Second, hedging is taken as an analytical lens while acknowledging the unique conditions of Latin America and, more specifically, Brazil. The third and fourth sections conduct an empirical analysis of Brazilian administrations which represent opposing ends of the political spectrum, assessing key signals from the left-wing Lula and Rousseff administrations, the transitional Temer administration, and the right-wing Bolsonaro administration to decipher their political alignment preferences vis-à-vis the Sino-US peer competition; the following section illustrates how this key regional state is employing hedging behaviour. In conclusion, the paper elucidates the far-reaching scope and centrifugal features of the status quo of instability, proliferating from the Asia–Pacific towards Latin America and triggering secondary states to revise their alignment preferences, not only to avoid retaliation from ‘siding’ with a great power, but also to seek better security and economic benefits through bargains by playing the great powers off each other. Here, Brazil’s manner of hedging points to unit-level determinants, distinguishing it from the Asian and European strands, which are often determined by system-level variables due to volatility. While not immune to the proliferation effects of power diffusion, Latin America’s coalescence is nevertheless vital to preserve Washington’s hemispheric hegemony. Likewise, for China the region represents both an invaluable growing market and a reliable source of essential commodities and resources which has been increasingly recognised as a priority for Beijing to achieve its strategic interests.
The Sino-US Peer Competition Proliferates to Latin America
Latin America is recognised as the last frontier of engagement for China's growing global profile in the context of the Sino-US peer competition as both vie for influence in an era of global power diffusion.Footnote 14 While Pax Americana has long since been ascertained throughout the region, earlier systemic competitors, such as Nazi Germany and the Soviet Union, challenged the US Monroe Doctrine by attempting to tip the regional balance of power with influencing projects and to undermine Washington's hegemonic supremacy.Footnote 15 Historically, if the region did not realign with Washington by its own initiative, the United States would likely impose political pressure – if not interference – in the economic and security arenas to discipline nonconforming states, thereby safeguarding US hemispheric hegemony. The suspension of post-revolution Cuba from the Organization of American States (OAS) and Washington's support for the military coup in Chile to oust the democratically elected left-wing leader Salvador Allende are perhaps the most notable examples.
Since the 2000s, Latin America's developing economies, such as Brazil and to a lesser extent Argentina, have been able to pursue efforts to increase their regional profile and status, a phenomenon which has been linked to the Pink Tide movement, consisting of left-wing administrations more critical of Washington's supremacy. These efforts exemplified post-hegemonic responses, if not resistance, to the US-led Liberal International Order (LIO).Footnote 16 Of late, Washington's focus on the Middle East and Asia-Pacific regions has created an opportune moment for Latin America to pursue greater political autonomy. This shift away from Washington's regional hegemony towards independent foreign policy reflects growing resentment towards US interventionism and historical power asymmetries.Footnote 17 In the context of dissatisfaction with regional power structures, Latin America appears keen on exclusive institutional projects able to drive development. This has resulted in a growing desire to engage economically with China, the region's major alternative provider of public goods that is capable of offsetting Latin America's dependency on Washington.
The literature on China–Latin America relations generally highlights the development of Chinese motivations for engagement and the consequences of its growing politico-economic presence.Footnote 18 Carol Wise and Victoria Ching expose how the initial proposal to diversify China's energy supply, part of its ‘going-out’ strategy, was reshaped by the new economic dividends of bilateral trade, gradually emphasising mutual desires for strategic cooperation.Footnote 19 Matt Ferchen remarks that China's trade relations with the Latin American and Caribbean (LAC) region developed from the need to acquire more natural resources to support national development goals, which played a significant role in the regional commodity boom and China's export-led growth (2000–13).Footnote 20 Furthermore, Chinese engagement efforts with the region shifted significantly under President Xi Jinping's leadership. In particular post-2013, as the Sino-US peer competition began ratcheting up, China's Latin America engagement took on an increasingly political-strategic dimension as evidenced by its use of policy banks to finance projects.Footnote 21 Since a keynote speech by Xi in 2014, more signals of Chinese intentions towards the region have emerged. Geostrategic infrastructure projects, loans and foreign direct investment (FDI) extensions, the expansion of strategic partnerships, and the inclusion of the region in existing and new regional institutions confirm that Latin America is considered a strategic priority.Footnote 22 Nonetheless, a regional apprehension has also been identified towards growing trade imbalances, deindustrialisation trends and conditions of overdependency towards the Chinese market, as well as Beijing's investment and acquisition of stakes in sensitive sectors, such as in mineral and energy projects.Footnote 23 Frequently, these concerns are pitted against arguments of economic complementarity and the positive effects of Chinese imports on local economies, such that China's economic presence is recognised either as worrisome or as an opportunity, according to the states’ current administration.Footnote 24
Such shifting dynamics have spurred speculations over the arrival of the Sino-US peer competition in the western hemisphere, wherein Beijing might utilise its politico-economic stimuli to wedge regional powers away from the United States or towards a potential China-led sphere of influence.Footnote 25 When comparing the current Chinese engagement in Latin America to former extra-territorial hegemonic challenges to US regional supremacy, Gonzalo Paz identifies two similarities, namely, the development of economic ties and the contestation of American liberal-democratic values by regional powers interested in ‘overcom[ing] the hegemony of the United States, or at least [mitigating] it’.Footnote 26 Francisco Urdinez et al. exposed that Chinese-backed FDI and loans have been disproportionally and strategically extended to selected partners that are less influenced by Washington.Footnote 27 Likewise, the Beijing Consensus, emphasising non-interventionism and value-free economic engagement, has been noted for attracting states often ostracised due to non-conformity to liberal values, such as Venezuela and Bolivia.Footnote 28 Such dynamics are identified as a possible advantage to China under a potential heightened great power rivalry scenario, wherein Beijing’s presence in the United States’ backyard could present a strategic counterweight to Washington’s security hegemony in the Asia–Pacific.Footnote 29 Noticeably, Washington’s concerns have been acknowledged since the first Trump administration (2017–21), as stated by former US National Security Adviser John Bolton: ‘The destinies of our nations will not be dictated by foreign powers; they will be shaped by the people who call this Hemisphere home. Today, we proudly proclaim for all to hear: the Monroe Doctrine is alive and well.’Footnote 30
Recognising that the Sino-US peer competition is proliferating in Latin America and that this competition is centred on influence, key regional secondary states play a fulcrum role, as their alignment choices have the potential to impact wider regional power dynamics. Essentially, these alignment choices determine the winner of the regional competition insofar as they bolster the efforts of one of the great powers, acting as a regional force multiplier and thus impacting the regional balance of power. Here, threat perceptions, nominally determined by aggregate power, geographical proximity, offensive capabilities and signals of intention, play a crucial role as the secondary state will incorporate them in their choice.Footnote 31 If a state is considered threatening, it will provoke others to align against them. Scholarship has offered a dichotomy of balancing and bandwagoning, defined respectively as ‘allying with others against the prevailing threat’ and ‘alignment with the source of danger’.Footnote 32 Balancing per se is nevertheless reserved for the great powers and is the source of wider systemic pressures.Footnote 33 Randall Schweller further illustrates that under a bandwagoning constellation, a more vulnerable state makes specific concessions to a more powerful state and, following a signal of willingness to do so, accepts a role of aligning its foreign policy imperatives with those of the latter, either based on a voluntary decision or for fear of facing detrimental consequences.Footnote 34
It is under such conditions that regional powers adjust their respective foreign policies to better cope with risks and opportunities emerging at systemic, regional and state levels. Secondary states can therefore choose to supplement the great power's balance against the rising power, or bandwagon with a rising great power usually typecast as the threat to the status quo. However, the balancing–bandwagoning dichotomy fails to explain why secondary states often opt against bandwagoning or supplementing the balance. Thus, hedging, as previously mentioned, is understood as a choice to ‘cultivate a middle position that forestalls or avoids having to choose one side at the obvious expense of the other’, referring to ‘any behaviour that sits in between these two stark alternatives [of balancing and bandwagoning]’.Footnote 35 The concept of hedging migrated to international relations from the realm of business and finance and is broadly understood as an investment behaviour or strategy aimed at reducing risk due to potential dividend uncertainty by supporting more than one possible outcome. Essentially, this means not placing all of one's eggs in a single basket due to the competitive nature of the investment market. As Kai He and Huiyun Feng put it, ‘if one security loses value, the other gains value’.Footnote 36 Hence, hedging entails an ‘engage-and-resist strategy’, with a ‘dual-track’ or omnidirectional engagement vis-à-vis competing great powers, for states that do not want to take sides between the two powers.Footnote 37 As such, hedging, although a contested concept due to it being applied with much variation by states identified as hedgers and interpreted differently by authors, has the goal of mitigating risk amid structural uncertainty and system permissiveness.Footnote 38 Great power balancing is therefore acknowledged as a prerequisite for secondary states to engage in hedging behaviour. When states hedge, they seek to minimise the risks, such as overreliance, and maximise the benefits generated by engagement with a more powerful state, which can also be supplemented via engagement with other secondary states.Footnote 39 This can result in intentionally ambiguous policy signalling so as to not indicate a chosen side, as they ‘see the future distribution of global power as uncertain and wish to avoid commitments that will be hard to discharge’.Footnote 40
Importantly, secondary states are recognised as possessing more space to engage in economic matters than security ones, particularly as they are likely to follow asymmetric security provisions to offset their own capability shortcomings.Footnote 41 Under these conditions, a range of formal and informal protective agreements, to avoid adverse effects of the competition while generating bargaining potential for agency to extract economic gains from the competition, can potentially be made.Footnote 42 Nevertheless, as great power competition intensifies, security concerns spill into economic ones. Therefore, returns maximisation and risk management begin to modify each other, as economic links become securitised and risks of ‘weaponised trade dependence’ are underscored by those favouring one great power over the other in order to push for an alignment narrative.Footnote 43 Despite Latin America’s distance from the immediate crosshairs of the Sino-US peer competition, and whereas hedging has been extensively, if not exhaustibly, operationalised in the Asia–Pacific, research on Latin America could expand the theoretical applicability of hedging by examining secondary states’ behaviour vis-à-vis the emerging great power competition through a system-unit level analysis.
Hedging Behaviour Comes to Latin America
When caught amid intensifying great power competitions, secondary states become increasingly vulnerable to system-level pressures, consequently shrinking the room for hedging behaviour.Footnote 44 In order to orchestrate their goal of projecting power over a region, competing great powers must vie for influence and thereby offer tangible benefits to the secondary state(s) in order to induce an alignment choice, essentially an effort to out-bid the other great power.Footnote 45 Here, the secondary state attains possession of the regional balance of power as the alignment choice is recognised as ‘Cui adhaereo, praeest’ (‘the party to which I adhere getteth the upper hand’).Footnote 46 Such a circumstance identifies a ‘power of the weak paradox’, wherein the regional balance of power, usually reserved for great powers, is redirected to the leverage that the secondary state possesses when pressed to make the alignment choice.Footnote 47 The choice has the potential to determine larger geopolitical and geo-economic rivalries as secondary states gain important fulcrum roles ‘at moments of international transition’.Footnote 48 This disputes the perspective that ‘[small and middle powers have] limited influence on deciding the distribution of power in a given regional system’.Footnote 49 Significantly, the great powers locked in a peer competition ‘may demand a clear commitment’, meaning that for secondary states hedging becomes ‘difficult, if not impossible’ to continue, as a ‘choice, sooner or later’, will be required when a ‘tipping point’ is reached.Footnote 50 However, an alignment choice is precarious, as it may subject the secondary state to countermeasures from the great power whose bid has failed. Incentives must therefore offer insurance, particularly in conditions of high systemic pressures, and returns maximisation, by meeting the interests of the secondary state to essentially offset the loss of benefits from the failed bid of the opposing great power. Secondary states will nevertheless prefer to maintain hedging behaviour for as long as possible and avoid the costly choice, by engaging in multi-vector or omnidirectional engagement with the opposing great powers, and via strategic ambiguity.Footnote 51
In areas where systemic pressures are less intense, greater room for unit-level foreign policy decisions is discernible.Footnote 52 The secondary state can pursue greater returns maximisation vis-à-vis its interests, such as greater economic dividends, security insurance and levels of political autonomy – leveraging both competing great powers for better incentives. These are incorporated into domestic political factors, comprising incumbent governments and leaders (e.g. left-wing or right-wing) as well as the political elites, which represent certain political values and preferences that are based on threat perceptions of respective great power(s).Footnote 53 These factors therefore have a crucial role in determining the direction of the hedge, as with each governmental shift or shift within the political elite a secondary state may change its hedging stratagem towards either great power. Taking stock of these variables through their signals allows observations of alignment preferences, (re)adjustments, and oscillations or ‘zigzagging between great powers’.Footnote 54 Essentially, the incumbent political party, along with the government, leader and political elite, directs policy outcomes based on their values and preferences, particularly in response to competition and great power threat perceptions. Nevertheless, such a role requires the administrative leadership to be competent at a political ‘game of skill’ when engaging with the great powers.Footnote 55 These unit-level variables essentially allow us to discern how the secondary states employ hedging behaviour and, as such, respond to varying degrees of higher or lower system-level pressure.
As such, four determinants influencing hedging behaviour are identified: (1) geopolitical proximity; (2) agency; (3) institutional effectiveness and (4) domestic pressures.Footnote 56 Here, Latin America is not within the immediate throes of the Sino-US peer competition in the Asia–Pacific, as it resides in the US-dominated western hemisphere. Following this logic, Latin America faces less systemic pressure in contrast to the Asia–Pacific, yet as China has become more active in the region, geopolitical uncertainty has increased, which in turn impacts the regional hedging behaviours. Latin American states have constrained agency when bargaining for alternative public goods and benefits due to longstanding US influence and interference, thus implying existing levels of dependency on Washington. However, China’s efforts in the region present an opportunity for secondary states to bargain with both great powers, thereby increasing leverage and an opportunity to reduce dependency on Washington. Regarding the relevance of financial and security institutions operating under the aegis of the US-led LIO, such as the OAS and the World Trade Organisation (WTO), alternative institutions and projects – notably the BRICS, the Community of Latin American and Caribbean States (CELAC) and the China-CELAC forum, the Union of South American Nations (UNASUR) and the Southern Common Market (SCM) – have generated uncertainty over institutional effectiveness and regional organisational coherence. This circumstance is largely tied to various Latin American states either prioritising or deprioritising competing institutional frameworks vis-à-vis left–right administration swings. Finally, domestic pressures impact the incumbent government’s position on the political spectrum in respect of ideology and values, as well as pressures for political action, which Latin America has often experienced, determining whether the incumbent government is pro-US (rightist) or anti-US (leftist) oriented.
Acknowledging that secondary states are rational actors seeking benefit maximisation, hedging behaviour can be seen as the optimal driver for foreign policy.Footnote 57 Specifically, Latin America's most influential power, Brazil, has signalled a desire to move towards the margins of the US regional order. Nonetheless, it has not forsaken Washington's material and rhetorical safeguards against potential foreign aggressors and non-traditional security threats such as terrorism and narcotrafficking organisations.Footnote 58 In this context, greater politico-economic engagement with China, as an economic driver and venue for institutional projects, is essential to obtaining such additional concessions. Here, we analyse Brazil, using its various administrations as case studies, since the country is the largest of China's trade partners in Latin America, as demonstrated in Figure 1.
Largest Latin American Trade Partners’ Total Trade Volume with China, 2008–19 (US$ billions)
Source: The Observatory of Economic Complexity (OEC), ‘What Does Argentina, Brazil, Chile, Colombia, Peru, and Venezuela Import from China? (2008–2019)’, OEC, 2022: https://oec.world/en/visualize/tree_map/hs92/import/arg.bra.chl.col.per.ven/chn/show/2008.2009.2010.2011.2012.2013.2014.2015.2016.2017.2018.2019/.
Since 2005, the combined value of China's overseas investment and construction in the energy and transport sectors in Latin America is disproportionately more prominent in Brazil, at over US$73 billion, than the next three destinations combined, specifically Peru (US$28 billion), Argentina (US$23 billion) and Chile (US$15 billion).Footnote 59 In 2021 alone, Brazil received US$5.9 billion from the US$7.1 billion of Chinese investments designated for Latin America, thus earning recognition as the top recipient of Chinese investment overseas.Footnote 60 Similarly, according to AidData's Global Chinese Development Finance Dataset (2000–17), Brazil is the recipient of the largest number of China-backed projects, specifically 134 projects, and the fourth largest recipient of loans, a total of 12 loans accounting for roughly US$40 billion.Footnote 61 Moreover, Brazil's engagement with China played a crucial factor in China's evolving diplomatic efforts. Specifically, diplomatic records evidence Brazilian Ambassador Roberto Abdenur's input into China's diplomatic lexicon during official visits to Brazil throughout 1993, proposing the term ‘strategic partnership’, since a ‘partnership with China had strategic value, because [Brazil] wanted to go beyond a mere commercial relationship’.Footnote 62 Such diplomatic exchanges highlighted China's very first strategic partnership (1993) and South–South outreach to Latin America, essential developments in reducing China's isolationism from the international community since 1989.Footnote 63
Despite the effective gains of a middle position, for example, by profiting from the Sino-US trade war through increased commodity exports to both sides, Brazil's hedging behaviour displayed manifest tendencies to oscillate when not falling into an alignment with Washington. The following sections will examine Brazil's specific political signals through the proposed case studies to identify the alignment drivers present while navigating the Sino-US peer competition. The empirical observations indicate that hedging is predominantly influenced by unit-level pressures, specifically the influences of domestic political actors and interest groups which impact the state's signalling and alignment preferences, thereby inducing hedging behaviour.
Autonomous Brazil under the PT: A Latin America for Latin Americans
Perceiving a lack of US attention in Latin America, Lula’s foreign policy, entitled ‘autonomy through diversification’, sought to answer domestic demands for increased agency as an instrument of national development while befitting the country's aspirations for greater international recognition and rising power status.Footnote 64 Initially, Brasilia took the lead in encouraging exclusive intra-Latin-American cooperation with a specific focus on South America, following Lula’s convictions that a ‘united South America will affect the world power chessboard’, resulting in the establishment of UNASUR in 2008.Footnote 65 This forum later led to the formation of the CELAC in 2011 and the revitalisation of the SCM as the cornerstone of regional integration efforts. Therefore, the mobilisation of state resources to materialise regional leadership aspirations, such as the extension of financial support for regional infrastructure projects by the state-owned Banco Nacional do Desenvolvimento (National Development Bank, BNDES), signalled that both the Brazilian elite and general public considered South America as the country's natural sphere of influence, supporting the desire to ‘associate [Brazil’s] present and future to South America’s destiny’.Footnote 66
Already on the path to solidifying regional influence via politico-economic indices, Lula was similarly keen to increment Brazil’s international profile as a rising power; for instance, he sought a permanent seat at the United Nations Security Council by taking responsibility for the UN peacekeeping mission in Haiti (MINUSTAH).Footnote 67 Here, Brazil emphasised the ‘democratisation of international relations’ concept as a discursive means to promote coordination with the Global South and developing world as a collective initiative for increased representation within Western-centric international regimes and to advance ‘a new international order that is … multilateral and less asymmetric, [and] free of hegemonies’.Footnote 68 Lula's pro-multipolarity discourse sought to achieve increased agency levels via South–South cooperation ‘by using direct dialogue with no intermediation by major powers, [wherein] developing countries have stepped into new roles in designing a multipolar world’, a crucial factor for Brazil to disseminate its role as a responsible rising power.Footnote 69 For instance, Brazil endorsed collective efforts at the G20 and BRIC (2009) that were pivotal to ‘[reducing] restrictions in [the developing world's] capacity in fomenting autonomous developing policies’, such as those against protectionist measures concerning the Doha Round at the WTO.Footnote 70
Concurrently, Brasilia's active regional presence and pro-multilateralism agenda were accompanied by a critical view towards US unipolarity.Footnote 71 The Lula administration’s political opposition towards George W. Bush’s ‘War on Terror’ fed Washington’s suspicions over a potential anti-Americanist Brazil, wherein concerns over a potential new ‘Latin “Axis of Evil”’, consisting of Brazil, Cuba and Venezuela, could have formed a significant opposition to US supremacy in the western hemisphere.Footnote 72 Furthermore, according to the former Minister of Foreign Affairs, Celso Amorim (2003–10), Lula’s dismissiveness towards the US-led proposal for the Free Trade Area of the Americas (FTAA), which ‘did not correspond to Brazilian interests’Footnote 73 and was labelled instead by Lula as an ‘annexation policy’,Footnote 74 was representative of an increasingly autonomous Brazil prioritising multilateral South American-led forums over Washington’s proposals. Noteworthily, Brazil rejected the ‘exercise of hegemony or domination’ as a national interest or goal, as well as intentions of competition against the United States for regional supremacy.Footnote 75 Instead, Lula’s diversification-centred foreign policy employed omnidirectional engagement from the regional sphere to the systemic level, in order to seek greater levels of agency and autonomy. It therefore reflected an ambiguous engagement with the United States, as Lula was under the impression that ‘the United States of America has the obligation and the extraordinary chance [referring to Obama’s first term] to renew its relationship with Latin America’.Footnote 76
Concerning Brazil’s autonomy-seeking goals, the importance of the reinvigoration of the Sino-Brazilian strategic partnership was threefold: (1) bilateral trade and financial cooperation, wherein China has been reckoned as the primary trade partner since 2009 due to its ‘potential for [economic] complementarities that do not exist between Brazil and any other country’; (2) Hu Jintao’s and, later, Xi Jinping’s support of Brazil’s promotion of South–South cooperation and shared interests for international pluralism; and (3) cooperation in alternative international organisations, demonstrating their shared determination in forging a democratic international order ‘less asymmetric, [and] free of hegemonies’, specifically via the BRICS.Footnote 77 The notion of pursuing a democratic international order intersects with Beijing’s use of the phrase ‘the democratisation of international relations’ (guoji guanxi minzhuhua), which means to give developing states a greater voice in international affairs and reform (de-Westernise) international institutions and organisations.Footnote 78 Such developments are in accordance with China’s interests and guiding principles outlined towards the region since 2009, reflecting mutual desires to enhance Sino-Brazilian ‘bilateral relations, in the medium and long term, vis-à-vis developments in the international arena’, as identified in the ‘China–Brazil Joint Action Plan 2010–2014’.Footnote 79
This shared vision quickly materialised in new institutional arrangements that supported the pursuit of Brazil and China’s demands within the international system and leadership aspirations for the region. During the Rousseff administration (2011–16), Brazil hosted the Sixth BRICS Summit in 2014, which included a notable joint session with Latin American leaders. At this summit, the New Development Bank (NDB) and the Contingency Reserve Arrangement (CRA) were announced, with President Rousseff recognising these efforts as steps that ‘point towards a multipolar world’.Footnote 80 Such initiatives emerged as alternative post-liberal mechanisms for financial stabilisation, thus expanding Brazil’s regional and global footprint, while reducing its institutional dependency on US-led organisations. For instance, these initiatives were crucial in supporting Brasilia’s desires for tackling the International Monetary Fund (IMF)'s voting and quota reforms.Footnote 81 Likewise, during Xi’s visit to Brazil for the China–LAC Summit (2014), his keynote speech inaugurated the China–CELAC Forum and the 1+3+6 framework,Footnote 82 while laying the foundations for the China–CELAC Cooperation Plan (2015–19) and Brazil’s agreement to join the Asian Infrastructure Investment Bank (AIIB) (2015), wherein multi-faceted cooperation and political coordination ‘will be of great significance for international relations to be more democratic’.Footnote 83 These inclusive institutional initiatives have allowed Beijing to expand its influence and reach into the LAC region, though seven LAC states are yet to abide by the One-China Principle.Footnote 84 The development of such initiatives demonstrates that Beijing has increasingly recognised the region as located within its Da Zhoubian (Great Periphery), while dubbing it the ‘natural extension of the 21st Century Maritime Silk Road’.Footnote 85
Brazil’s foreign policy achievements were soon hampered by growing domestic unease over the 2015 Brazilian economic crisis and domestic concerns over deindustrialisation and a possible negative trade balance with China due to the affordability of Beijing’s commodities.Footnote 86 These concerns mobilised the Brazilian right-wing political opposition to demand a protectionist and minimalist foreign policy, and a redirection towards traditional alignment with the United States. Following a political crisis due to corruption scandals linked to the PT and Brazilian multinational enterprises, Brazil's Congress pushed for Rousseff’s impeachment in 2016, regarded by the opposition as an ‘institutional way out of the [Brazilian political and economic] crisis’ that was widely supported by the right-wing agrarian, industrial and business sectors.Footnote 87 Marking the end of Brazil’s ‘diplomatic golden age’, then President Temer (2016–18), Rousseff’s vice-president and successor, appeared dismissive of promoting Brazil’s international profile, for instance demonstrating indifference in playing any role towards a peaceful resolution to the Venezuelan crisis.Footnote 88 However, signals of Brazil’s foreign policy recalibration were already identifiable under Rousseff’s administration. In 2015, Rousseff’s cabinet initiated the application for membership of the US-led Organisation for Economic Cooperation and Development (OECD). The process was later completed by Temer in 2017, indicating a reorientation towards Washington, regarding which it was remarked that membership would ‘bring several benefits to the Brazilian economy’.Footnote 89
The PT administrations’ autonomy-seeking foreign policy was fuelled by an aggregation of domestic, regional and international factors. Initially, regional and systemic geopolitical conditions, namely Washington’s lack of attention to Latin American demands, the Pink Tide and the new rising global economies, provided Brazil with political and institutional support to advance a more democratic and multipolar international system, all crucial to allowing Brasilia to increase its agency and pursue a partial manoeuvre away from the US regional hegemonic order. Likewise, the emergence of China as an alternative politico-economic strategic partner was pivotal to pursuing agency and rising power status, as it presented an opportunity for Brazil to wedge itself away from US regional influence: not only because the Chinese-led commodity boom provided economic dividends to alleviate dependency on the US market, but also due to Beijing’s synchronisation with Brasilia’s socio-economic identity and shared demands for representation in international regimes.Footnote 90 Likewise, the coordination and coalescence of domestic interest groups, particularly the corporate sector and political elites in Congress, often called upon to support the pursuit of national interests, are recognised as a vital factor limiting the length of foreign policy expansion, thus reflecting an ability to engage in hedging behaviour within Brasilia’s foreign policy.Footnote 91 Motivated by successes in developing the internationalisation of the Brazilian economy, domestic political support was keen to increase the government’s budget to improve Brazil’s international profile, from BNDES-backed off-shore investments to sponsoring alternative forums for regional integration and political coordination within the developing world.Footnote 92
Brazil’s implementation of a diversified foreign policy and hedging behaviour require the alignment of both unit-level and system-level conditions. Here, intentions to pursue autonomy were first identified in the administration of Lula’s predecessor, Fernando H. Cardoso (1995–2003).Footnote 93 The absence of great power competition makes the operationalisation of hedging strategies unfeasible, and thereby reduces a secondary state's ability to bargain for agency. Likewise, the lack of regional support pre-Pink Tide meant unfavourable conditions for Brazil to mobilise regional and rising economies into formulating alternative institutions to reduce dependency on the US-led LIO. Analogously, regardless of whether equidistant engagement with competing great powers was possible without jeopardising security, the domestic economic and political crisis reshaped national priorities. Once the business sector was no longer supporting the ruling party and the political opposition was able to manoeuvre an impeachment procedure, Brasilia’s hedging strategy was increasingly renounced in favour of a rapprochement-driven foreign policy towards traditional alignment with the United States.
Bolsonaro’s Oscillations between Washington and Beijing
Brazil's alignment shift during the Bolsonaro administration initially emerged from political ideological and value differences between Brazil and China vis-à-vis the Sino-US peer competition.Footnote 94 Here, Brasilia's value-centred U-turn in foreign policy sought to satisfy domestic demands for a (far-)right-wing conservative political agenda. It consisted of a strategic realignment with the United States and deprioritisation of regional integration and international institutions or post-hegemonic proposals.Footnote 95 Specifically, Bolsonaro's conservative nationalist electorate, whose anti-PT views (commonly referred to as ‘anti-petismo’) attributed the national crisis to the left-wing ideology of the PT, and his cabinet – composed of retired Army officials including himself (a retired captain) and Hamilton Mourão (a retired general) as vice-president – sought political alignment and additional security bargains from the United States. As such, Bolsonaro's presidency was connected with the first term of US President Donald Trump due to various shared traits. Specifically, Bolsonaro's emulation of Trump's anti-establishment and anti-globalism, his adaptation of nationalistic rhetoric such as the ‘Brasil Acima de Tudo’ (‘Brazil Above All’) government campaign, and his fierce allegations about the origins of COVID-19 aimed to appeal to his right-wing conservative electorate, who valued many US Trumpist ideals.Footnote 96 These actions earned Bolsonaro the nickname ‘Tropical Trump’.Footnote 97
Consequently, Brasilia’s foreign policy U-turn and desires for immediate realignment with Washington reestablished asymmetry in the relationship, illustrated during Bolsonaro’s first official visit in 2019. First, disproportionate concessions were observed in allowing the United States to conduct space launches from Brazil's Alcântara Space Centre, whereas new commitments to strengthen cooperation in border security and information sharing through the US–Brazil Security Forum appeared vague.Footnote 98 Second, Brazil was designated as a major non-NATO ally, being the only Latin American state to receive such a designation, except for Argentina (1988).Footnote 99 The relevance of such a designation relates to US interests in deterring China’s expansion in the western hemisphere. Also, interests converged between the Bolsonaro and Trump administrations, considering their mutual desire to isolate leftist Venezuela and concerns over Beijing’s hydrocarbon imports and provision of military equipment to Nicolás Maduro's regime.Footnote 100 Concurrently, the Bolsonaro administration’s erratic rhetoric towards Beijing was largely similar to Washington's, focusing on three criticisms: (1) Chinese economic policy towards Brazil, wherein fears of economic dependency due to China’s affordable manufactured exports could lead to a negative trade balance with Beijing, a trend already identified throughout Latin America; (2) risks to national security, with China’s state-owned investment in sensitive sectors (such as energy, agriculture and mineral resources) often characterised by Bolsonaro as ‘[the Chinese] are buying Brazil’;Footnote 101 and (3) Chinese political values, recognised as challenging the LIO and US hegemony, and perceived as incompatible with Brasilia’s redefined self-identification as a part of the West.Footnote 102 Consequently, Brazil’s shift in posture towards China was driven by internal desires for rapprochement with the United States, displaying ideological alignment with the Trump administration’s rhetoric on the Sino-US rivalry. These dynamics were further reflected in Brasilia’s engagement with Beijing through alternative institutional frameworks. Bolsonaro’s ‘lack of fanfare for the BRICS’ indicated a diminishing confidence in its institutional effectiveness, as it was gradually deprioritised in favour of realignment with Washington.Footnote 103
Facing overall disappointment with Washington’s lack of material support and security bargains, Bolsonaro’s return to political ambiguity reflects the reorientation of hedging strategies to maximise gains from the Chinese economy. Bolsonaro's change in signals towards Beijing was already identified early in the first year of his presidency. Nevertheless, during his first trip to China in 2019, he declared ‘I am in a capitalist country’, triggering controversy.Footnote 104 This rapid change in signals is significant as it attempted to distinguish the Chinese government’s internal political system from the Brazilian domestic left-wing opposition movement, thus rhetorically legitimising Beijing as an important and reliable economic partner. Crucially, the Sino-US trade war has proven beneficial for Brazil’s agricultural sector, which observed an upturn in exports to both China and the United States with the ‘Phase One’ Sino-US trade deal agreement that was finally signed in 2020. Soybean exports to China made gains, rising from 53.8 million tonnes in 2017 to 68.8 million tonnes in 2018, not to mention other agricultural subsectors, such as beef and cellulose.Footnote 105 Hence, Brazil might be considered a potential winner in the Sino-US Trade War.Footnote 106 As such, Brasilia found it challenging to follow Bolsonaro's earlier attachment to the so-called ‘China Threat’ narrative.Footnote 107 As a means to ensure access to Chinese capital, his amicable rhetoric on the 2019 tour indicated that Chinese markets were crucial for minimising the detrimental effects of the 2015 economic crisis and later of the COVID-19 pandemic, whereas any previous plans for decoupling were deemed unfeasible. Concurrently, frustration with Washington began due to the Trump administration’s unwillingness to offer tangible security benefits, notably with a decrease in arms exports to Brazil from US$47 million to US$21 million (2019–20).Footnote 108 Crucially, Bolsonaro was recognised as being more pro-Trump than pro-US, given his evident disappointment with Joe Biden’s election (2021); and his overtures towards consolidating an international liberal-democratic coalition to defend the LIO suggest an indifference towards marked ‘liberal’ values.
As a consequence, the reorientation of Brazil’s pursuit for political autonomy away from the United States by vectoring towards China was a recognisable shift in the country's hedging behaviour.Footnote 109 Specifically, harsh criticism from Biden and the international community towards Bolsonaro on environmental issues was shielded by Beijing’s positioning in favour of ‘Brazilian sovereignty and the Amazon region’.Footnote 110 Such effects induced the Brazilian Senate to call for the resignation of the Foreign Affairs Minister, Ernesto Araújo, a hard-line critic of the political Left and ‘communist regimes’, in favour of the more pragmatic Carlos França.Footnote 111 Two situations illustrate how Brazil’s strategy has recalibrated towards an equidistant position to navigate the Sino-US rivalry and maximise benefits throughout Bolsonaro’s tenure. First, Brasilia disregarded Washington’s warnings to reduce Brazil's bilateral defence technology development programme in the face of its negotiations for Huawei’s 5G equipment, thus manifesting Bolsonaro’s inclination towards strategic ambiguity.Footnote 112 Second, Brazil attended the Summit of the Americas (June 2022) in Los Angeles after Washington accepted the organisation of a bilateral meeting, to negotiate a commercial package facilitating bilateral trade and investment, and to gain support for Brazil’s OECD candidature.Footnote 113 It is noteworthy that the Summit is regarded as an effort by the Biden administration to re-engage politically and economically with the democratic states of the LAC, important for offsetting the influence of China. Specifically, the announcement of the ‘Americas Partnership for Economic Prosperity’ initiative, which is ‘grounded on the same core values that [the Biden] administration is bringing to our own strong economic recovery’, is a potential lever for ‘nearshoring’ proposals to relocate some supply chains from China to Latin America and to shield the US economy from trade tensions with China.Footnote 114
Domestic pressures played the most significant role in influencing Brazil’s strategy to cope with growing systemic pressures in the western hemisphere. The conservative electorate and the cabinet’s demands for rapprochement with the United States were gradually deprioritised in favour of engagement with China for economic benefits, thus evidencing alignment oscillations, a characteristic of hedging behaviour amid great power peer competition. Although Trump and Biden’s strategies in dealing with Beijing differ, both their administrations failed to provide Brasilia with a prerequisite for alignment, namely in the form of substantial security concessions. Consequently, Bolsonaro’s reorientation towards Beijing denotes his desire to act independently from Washington, particularly after becoming the target of criticism by the Biden administration. For instance, once a major component of his anti-leftist rhetoric during the 2018 presidential elections, criticism towards China was tempered in his 2022 election campaign. Despite the aforementioned setbacks, Brasilia did not signal intentions of dislodging itself from Washington’s sphere of influence. Instead, Brazil’s status as a major non-NATO ally and evidenced preference for OECD membership while evading regional and Chinese-led institutions, for example by stalling its BRICS membership, indicate that Western-centric and US-led institutions remained central to Brasilia’s alignment priorities under Bolsonaro.
Conclusion: Brasilia’s Sustained Hedging Behaviour
This analysis has shed light on the strategic behaviour of Brazil, identified as a secondary state caught in the middle, to cope with the increasing proliferation of the Sino-US peer competition in Latin America, particularly amid the ‘status quo of instability’.Footnote 115 However, unlike the Asia–Pacific, which faces heightening territorial disputes, an arms race and increasingly securitised economic linkages, the space for hedging remains broad for Latin American states as the region is still partially immune to the security throes of great power competition due to its geographical location. In the context of the Sino-US peer competition for influence in Latin America, Brazil’s hedging behaviour is strongly unit-level driven and recognised as a political strategy to reduce great power dependency while maximising efforts to gain economic benefits, as well as efforts to build status through autonomy, by vectoring towards Beijing. However, Brasilia has not renounced Washington’s security guarantees nor challenged its regional supremacy.
As variation in Brasilia’s alignment position as either pro- or anti-US supremacy is observed, four determinants have asymmetrically shaped Brazil’s hedging indices (see Table 1).
Determinants of Hedging in Brazilian Left- and Right-Wing Administrations
First, far from the centre of the Sino-US peer competition, the geopolitical space in Latin America has not altered significantly. Despite early scholarly appraisals that China’s growing presence in the region could lead to a potential regional power transition, Beijing’s lack of ideological support for regional autonomy or indifference to revising the status quo in Latin America indicates that its interests in the region are economically centred, yet it continues to place emphasis on South–South cooperation.Footnote 116 Second, the PT sought greater independent agency from Washington by engaging with China, as Brasilia’s hedging posture reflected dissatisfaction with the United States and a lack of convergence of interests. Nonetheless, there appear to be no intentions to compete against the United States for hegemony, nor to dislodge Brazil from Washington’s orbit, as US leadership is still more desirable than that of China, despite the economic dividends.Footnote 117 In short, Brazil’s autonomy-seeking and its intentions to reduce dependency on Washington do not translate to being pro-China. Despite increased agency levels, Brazil remained within the limits of the US sphere of influence. Bolsonaro’s appeasement efforts towards Beijing followed by the return of a more equidistant position were motivated by guaranteeing economic stability, while desires to act independently from the United States did not encourage cooperation with China on issues outside trade and investment. As a result, Brazil’s capacity to pursue a political agenda independently from the United States once interests failed to converge remained unaltered and uninhibited by Washington’s influence. The degree of autonomy exercised and sought, however, varied according to each administration’s interests. Third, Brazil’s dependency on the LIO’s institutional regimes was only partially reduced by the proliferation of alternative post-liberal frameworks. Although initially such new and reinvigorated institutions appeared promising in alleviating Brazil’s dependency on the US-led frameworks, they were inefficient in replacing the latter’s functions as they faced stagnation, fragmentation or diverging perceptions.Footnote 118 However, additional LIO institutions also stand beyond its reach: for instance, full NATO membership is unattainable due to the limitations of Article 10, while Washington appears to have deprioritised Brazil’s request for membership of the OECD.Footnote 119 Fourth, regarding the historical ideological struggle of domestic political forces, the alignment preferences of influential groups – whether pro- or anti-United States – were shaped by their position on the Right–Left political spectrum, the compatibility of their respective values, and concerns about overdependence on great powers. Specifically, the PT's desire to act relatively independently from Washington reflects the region’s left-wing political tradition as being more resentful towards great power interventionism and more critical of US hegemony. Conversely, right-wing groups prioritise traditional relations with the United States and the West, as exposed by Bolsonaro’s alignment shift, while being disinclined to cooperate with China on regional or global issues. However, Brasilia’s need to recalibrate the economic relationship with Beijing required more pragmatic behaviour, or, as Bolsonaro stated, ‘we will never be 100 per cent aligned with China, but we are close on economic issues’, denoting convergence of economic interests despite ideological irreconcilability.Footnote 120
Following Lula’s victory in the October 2022 presidential election, Brasilia’s early 2000s foreign policy priorities, focused on an independent foreign policy fused with omnidirectional engagement, appear to have returned. Since Lula’s statement ‘Brazil is back’ at the COP27 in November 2022, Brazilian diplomatic activism has been notable.Footnote 121 Importantly, Lula ‘restored Brazil’s centrality in the South America region’ by re-joining UNASUR and CELAC and has promoted the expansion of the BRICS, all efforts largely tied to promoting multipolarity and Brazil’s position as an independent actor playing a constructive role as an emerging regional and global player.Footnote 122 Unsurprisingly, Xi signalled willingness ‘to work with President-elect Lula, from a strategic height and long-term perspective, to jointly plan for and elevate the [China–Brazil] comprehensive strategic partnership’ which reverberates around Beijing’s pragmatic and non-deterministic approach to inter-state relations, wherein it will cooperate with any type of regime as long as China's political conditions are recognised.Footnote 123 Chinese Foreign Minister Wang Yi has stated that Brazil is a ‘priority for Chinese diplomacy’, signalling intentions to court Brazil for the upcoming November 2024 G20 Summit in Rio de Janeiro while Brazil holds the G20 presidency, and to pave the way for Xi’s first official visit since Lula’s third term.Footnote 124
Likewise, the Biden administration held high expectations for improving the US strategic partnership with Brazil on various issues in order to protect liberal democracy, the rule of law, the environment and human rights. Such commitments were mutually pledged during Lula’s state visit to Washington in February 2023, and also reinforced through several high-level US diplomatic visits to Brazil, such as those of Under-Secretary Jose W. Fernandez and US Trade Representative Katherine Tai.Footnote 125 Moreover, during a hearing of the US Senate Committee on Foreign Relations over the future of US–Brazil relations, held in March 2023, Senator Pete Ricketts affirmed that ‘there are obvious concerns that China will continue to leverage these economic ties to expand influence in the [Latin American] region’, going on to question: ‘Is the Biden administration doing enough to discourage countries like Brazil from pursuing investments from China and seeking trade with China? Should we [the United States] be doing more … to develop that relationship [with Brazil]?’Footnote 126 As such, regardless of the end of the political spectrum on which Brasilia locates itself, political ambiguity and hedging behaviour are likely to remain as Brazil’s economic dependency on Beijing has reached a critical moment. Nonetheless, as the western hemisphere is increasingly identified as a geopolitical arena of great power competition, Washington may attempt to offer better incentives to out-bid China and induce a pro-US alignment decision from Brasilia. With that said, in the face of heightening Sino-US rivalry, in terms of a potential alignment choice Brasilia is likely to respect its pan-Americanist tradition and supplement the United States’ balance against China, if sufficiently pressed, although any supplement would likely be limited to rhetorical support.
In conclusion, hedging provides a suitable lens to evaluate key Latin American states vis-à-vis Sino-US peer competition. Although Brasilia stands as the foremost capable power in terms of formulating and employing a more tangible hedging strategy, other key secondary states caught in the middle also emerge as potential case studies. Notably Argentina, due to influential heterogeneous political groups hampering the formulation of an effective foreign policy, has long struggled to normalise relations with Washington and attain security concessions while managing its economic overdependency on China to stabilise its economy.Footnote 127 Therefore, there is further space for debate on hedging behaviour in the Latin American region, which should be recognised as an under-researched region in the broader hedging literature.
