Mapping US investment in Latin America and the Caribbean

For two decades, the United States has been Latin America and the Caribbean’s largest foreign investor, a relationship built on manufacturing supply chains, energy partnerships, and a deepening commercial bond. Today, that relationship stands at a defining moment. As global competition for capital intensifies and geopolitical rivals seek to expand their footprint in the region, understanding where US investment has actually flowed and what it has directly and indirectly delivered matters more than ever.

It is with this in mind that the Adrienne Arsht Latin America Center undertook this study, mapping two decades of US investment data across the region to build an evidence base that has, until now, been largely overlooked in this conversation and that can hopefully catalyze the next generation of US investment flows.

This report reflects the outcome of that effort. It maps where US investment has gone, assesses its positive impact on local economies, and benchmarks it against the investment of the United States’ geopolitical competitors. For US policymakers, it offers an additional foundation for crafting economic diplomacy toward Latin America that is aligned with the National Security Strategy’s call to enlist and expand US partners across the hemisphere. For the region’s governments, it offers the tools to recognize the value of US investment and the case for updating public policy to seek more of it. Companies weighing potential LAC investments should use the findings to strengthen the case for directing capital to the region.

It is our hope that this report will serve not only as a foundation for smarter policymaking, but as a catalyst for deepening the United States’ economic and strategic partnerships in the Western Hemisphere.

Jason Marczak, vice president and senior director,
Adrienne Arsht Latin America Center, Atlantic Council

• Introduction
• The big picture: Mapping US investment in LAC
• Assessing the impact of US investment in LAC
• Policy recommendations: Capitalizing on US investment in LAC
• Acknowledgments
• About the authors

Executive summary

The United States is and remains the largest foreign investor in Latin America and the Caribbean (LAC) by multiple measures. Across the past two decades, no other country has come close to matching the scale, breadth, or consistency of US private-sector engagement in the region. US greenfield foreign direct investment (FDI) averages $28.7 billion per year, with a heterogeneous investment profile spanning energy, digital infrastructure, manufacturing, and services.

But based on the US interests laid out in the 2025 National Security Strategy to enlist and expand partners across the hemisphere, there are gaps in how market logic has directed US investment.

Mining is the starkest example. US greenfield investment in LAC’s mining sector is limited, averaging just $200 million per year between 2020 and 2024, while China invests twenty times more in the sector. And roughly 70 percent of US greenfield FDI since 2020 has flowed to just three economies: Mexico, Brazil, and Guyana. Measured relative to the size of host economies, US investment intensity has declined in strategically important and mineral-rich countries like Argentina, Chile, and Peru.

However, Costa Rica shows that small economies with deliberate sector-specific strategies can attract US investment at intensities that rival much larger markets, offering a replicable model for the rest of the region.

What makes US investment distinctly valuable is its quality. US greenfield FDI generates 65 percent more jobs per billion dollars than Chinese investment and 22 percent more than European investment, making it the most employment-productive capital available to the region. Beyond jobs, US companies’ unique concentration in knowledge-intensive sectors generates positive innovation diffusion across LAC, and no other foreign investor directs a higher share of capital to research and development in the region than the United States.

But there is no room for complacency. China is gaining ground systematically across strategically sensitive sectors. In automotive manufacturing, China has reached effective investment parity with the United States for the first time. In logistics infrastructure, China has demonstrated the capacity to surge past the United States when opportunities arise, as the Port of Chancay in Peru illustrates. In mining, China already leads by a factor of twenty. And in 2025, while US greenfield FDI to LAC dropped significantly, a single Chinese company announced a $40 billion data center investment in Brazil, $12 billion more than the US annual average in LAC over two decades, demonstrating China’s capacity to compete dollar-for-dollar with US investment in the digital domain where American firms have historically been strongest.

The quality advantage of US investment is real but sustaining it requires deliberate action on behalf of the US government and LAC governments. The US government should pursue policies to mobilize strategic investment toward underserved economies, incentivize critical minerals value chain development in LAC, and protect US digital infrastructure leadership in the hemisphere. LAC governments, in turn, should pursue targeted investment attraction policies to capture the flows that market logic alone will not direct their way. The window of opportunity is open, but it will not stay open indefinitely.

Introduction

Latin America and the Caribbean, as a region, is home to vast natural resources, a young and growing labor force, and expanding consumer markets. It also has strategic geographic positioning, yet it remains one of the world’s most underperforming economies relative to its potential. The World Bank’s 2025 regional growth forecasts project LAC growing at just 2.3 percent, trailing behind sub-Saharan Africa, South Asia, and East Asia and the Pacific.¹World Bank, Economic Outlook. An important roadblock has been investment, which at approximately 20 percent of regional gross domestic product (GDP), has historically and consistently underperformed most developing regions since 1980.²OECD, “Assessing the Socio-Economic Impact.” This meager pace of growth is a reflection of unrealized potential across strategic sectors.

For the United States, Latin America’s economic trajectory is a matter of national interest. The 2025 US National Security Strategy (NSS) makes this explicit, stating that the United States must strengthen critical supply chains in this hemisphere to reduce dependencies and increase American economic resilience, and that the linkages created between the United States and its partners will be mutually beneficial.³White House, National Security Strategy, 2025. US economic engagement in the form of investment can also help bridge LAC’s historical investment gap. In practical terms, this means that the economic development of Latin America and the health of US investment flows into it are inseparable from US strategic interests at home and abroad.

Yet for all the weight these ties place on US investment in the region, there is a striking gap in our understanding of it. Over the past decade, scholars, think tanks, and policymakers have developed a sophisticated body of research on China’s investment patterns in Latin America and the Caribbean, documenting its channels, sectoral concentration, financing structures, and geopolitical implications. The same cannot be said for US investment. Little systematic analysis exists of where US capital has flowed in the region, which sectors it has prioritized, and what impact it has generated. Without this understanding, it is difficult for US policymakers to evaluate which policies are working, where gaps exist, and how to design more effective strategies going forward.

The knowledge gap matters equally on the Latin American side. Regional governments seeking to attract and leverage foreign investment need a clear-eyed picture of what US investment looked like over two decades (2003–2025, to be specific), which sectors have benefited, and which have been bypassed. That knowledge is foundational to designing smarter investment promotion policies, regulatory frameworks, and bilateral engagement strategies.

The analytical framework for this assessment draws on the Organisation for Economic Co-operation and Development’s FDI Qualities Initiative, which has produced the most rigorous evidence available on the development impact of foreign investment in LAC, with particular emphasis on EU investors. In the second part, this report applies a comparable lens to US investment, using original project-level greenfield FDI data to assess the same dimensions of investment quality: employment generation, productive linkages, and innovation spillovers. It further draws on our own analysis of individual FDI transactions and consultations with investment-attraction experts.

The big picture: Mapping US investment in LAC

Investment channels and methodology

Foreign direct investment flows through three main channels: greenfield FDI, which creates new productive capacity through new facilities or expansions; mergers and acquisitions, which transfers ownership of existing assets; and reinvested profits, whereby earnings from existing foreign-owned operations are reinvested locally. Of the three, greenfield FDI is most directly associated with new capital formation, job creation, and technology transfer, making it the most informative measure of where new US productive investment is being directed. Mergers and acquisitions data captures ownership changes rather than new capacity, and reinvested profits, while significant in volume, are difficult to track consistently across countries due to official statistics measuring it differently between countries.

This report draws on the Financial Times‘ fDi Markets database, which tracks announced project-level commitments with consistent detail on origin country, destination country, sector, capital expenditure, and jobs created. Because fDi Markets captures announcements rather than actual capital arrivals, it measures expected FDI flows rather than realized ones. Its project-level granularity, however, allows for cross-country and cross-sector comparisons that official FDI statistics do not permit.

Across the analysis, LAC covers Brazil, Mexico, Argentina, Chile, Colombia, and Peru (LAC 6) individually, alongside Central America and the Dominican Republic and the Caribbean as regional blocs. Guyana is treated separately throughout given that its oil-driven investment figures are analytically distinct and would otherwise skew broader regional aggregates.

US greenfield investment in Latin America and the Caribbean (see figure 1) has been the largest of any single country throughout the past two decades, averaging $28.7 billion per year between 2003 and 2025, a position no other country has come close to displacing.⁴Constant 2025 USD values are used throughout the report.

The story is not one of linear growth. US greenfield FDI flows have been volatile year by year, shaped by global commodity cycles, financial crises, and shifting sectoral priorities. The post-pandemic period, however, marks a clear acceleration. Between 2020 and 2025, US investment averaged $32.9 billion per year in constant 2025 dollars, well above the longer-run average of the prior two decades. Two years stand out as exceptional peaks: 2022 and 2024, when US annual greenfield FDI reached $46.9 billion and $43.2 billion, respectively, both all-time highs in the dataset. These surges were driven by major energy project commitments, US-Mexico-Canada Agreement-linked automotive manufacturing announcements, and accelerating data center investments by US hyperscalers (i.e., operators of vast data centers) across the region.

By comparison, China has grown the fastest from the smallest base. In most years before 2019, Chinese investment was consistently below $7 billion. Its post-pandemic trajectory is particularly notable. From $4 billion in 2020, Chinese greenfield FDI grew to $20.3 billion in 2023 before moderating to $8.8 billion in 2024, representing an average 70 percent increase per year from 2020 to 2025. The 2025 data, however, introduce a significant outlier: China recorded $46 billion that year, driven almost entirely by ByteDance’s announcement of a $40 billion data center investment in Brazil. This single project, by TikTok’s parent company, accounts for the vast majority of China’s 2025 total and should be read as an exceptional commitment rather than evidence of a broad structural shift in Chinese investment patterns. In the same year, US greenfield FDI fell to $19.3 billion, a drop likely reflecting the uncertainty US companies faced navigating new tariff policies.

It thus remains clear that US private capital has been and remains the dominant force in greenfield foreign investment across the region. China’s greenfield FDI, however, has roughly tripled since 2020 and large Chinese companies have shown an ability to match and surpass US investment in the LAC region. For US policymakers, this trajectory is both a validation and a warning: US private capital has held its ground as the dominant force in LAC investment, but the competitive pressure from Chinese firms in strategically important sectors is growing. For LAC governments, it signals that the landscape of available foreign capital is diversifying, making the case for understanding what US investment specifically offers even more important.

The geographical distribution of US greenfield FDI follows a clear logic (see figure 2). In absolute numbers, Mexico and Brazil alone absorbed 63 percent of all US greenfield FDI since 2003, and adding Guyana brings that figure to approximately 70 percent, an important concentration of investment flows. Brazil and Mexico attract market-seeking investment and, in the case of Mexico, efficiency-seeking investment, driven by market size, purchasing power, proximity to the United States, and the US-Mexico-Canada Agreement. Guyana attracts resource-seeking investment, as offshore oil discoveries have drawn major US energy commitments that dwarf the country’s economic size. US private capital, in absolute terms, goes where market logic directs it, and that logic concentrates it in large markets and resource economies. The strategic question for Washington is whether that outcome is sufficient to achieve the NSS objective of deepening partnerships and enlisting allies across the hemisphere, or whether government instruments need to complement private capital flows to reach countries that markets alone will not prioritize.

Measuring US investment relative to the size of host economies offers a more complete picture (see figure 3). Over the past decade, setting Guyana’s oil-driven outlier aside, Costa Rica received US greenfield investment equivalent to 0.99 percent of its GDP annually between 2016 and 2025, the highest in the region, followed by Mexico at 0.79 percent.

But for several strategically relevant economies, US greenfield FDI matters less over time for their broader economies. Resource-rich countries like Peru saw the clearest drop between both decades, and Argentina and Chile did to a lesser extent. Brazil itself, despite its absolute volumes, received an investment equivalent to just 0.27 percent of GDP, below the LAC regional average of 0.48 percent.

For LAC governments, the Costa Rica case demonstrates that deliberate sector-specific strategies—not economic size—determine investment intensity. Costa Rica followed a deliberate, decades-long industrial policy designed to attract high-value US manufacturing (namely medical devices). Smaller economies that build the right conditions can attract US investment at economically meaningful scales. For Washington, the GDP-weighted picture raises a different concern: Several countries that are strategically relevant to US hemispheric interests, like Peru, Chile and Argentina, are receiving levels of US private investment that fall well short of what their strategic importance might warrant, pointing to a gap that market logic alone is unlikely to close.

Sectoral shifts in US investment flows

US companies invest across a wide range of sectors in LAC, producing a heterogeneous investment profile that has nonetheless shifted in important ways over the past two decades (see figure 4).

The energy sector has undergone the most dramatic transformation. Through most of the 2000s and early 2010s, energy investment averaged around $6 billion per year. From 2019 onward it accelerated sharply, doubling to an average of $12.6 billion between 2020 and 2024 and reaching a peak of $18.9 billion in 2024. This surge reflects a concentration of large-scale oil and gas commitments, particularly in Guyana, as well as growing renewables investment across Brazil and Mexico. Energy has gone from a secondary sector to the single largest driver of new US capital in the region.

Digital investment’s upward trajectory has been more gradual. From around $4 billion per year in the mid-2000s, it grew steadily to average $8.5 billion between 2020 and 2024, reaching $10.4 billion in 2024 as US hyperscalers including Microsoft and Amazon Web Services accelerated data center and cloud infrastructure commitments across the region. Together, energy and digital now define the leading edge of new US investment in LAC. As will be shown later, however, this concentration, while significant in capital terms, has not displaced manufacturing and services as the primary drivers of US employment in LAC, since those sectors remain far more labor-intensive per dollar invested.

Manufacturing was the dominant sector in the late 2000s and early 2010s, peaking at $18.5 billion in 2010 before entering a long structural decline. The average between 2020 and 2024 was $8.1 billion per year, a 34 percent fall from its earlier-period average. The slowdown has been concentrated in automotive manufacturing; food and beverages and medical devices have held relatively steady. This reflects a deceleration in new manufacturing commitments rather than a withdrawal of existing operations: Factories built in prior years continue producing and employing workers regardless of whether new capital announcements arrive. Services have remained consistent throughout the period, with a mild decline from an average of $4.6 billion from 2005 to 2009 to an average of $3.9 billion from 2020 to 2024. Despite its strategic importance, mining remains the most negligible macrosector in the full period.

What makes the United States the largest foreign investor in LAC is precisely the breadth of its investments across sectors over a long period of time. The more recent shift toward energy and digital announcements is broadly consistent with national security priorities in those areas, but the slowdown in manufacturing and mining raises questions about whether US private capital is flowing toward the sectors that matter most for hemispheric supply chain security.

The paths and flows of US and Chinese investments

Comparing the US shift with the investment posture of China, its primary geopolitical competitor, reveals two investors following similar trajectories in the countries they prioritize (see figure 5). However, the similarity does not hold when looking at sectoral composition and greenfield FDI volume (see figure 6).

Much like the United States, China’s greenfield FDI flows to LAC’s largest economies: Brazil is the most consistent recipient over the last two decades, and while Mexico received little in the first years (in the period analyzed), it has attracted strong sustained investment since 2020. What’s different about China’s LAC investment profile (compared to the US profile) is the important contribution made by mineral-rich countries like Peru and Argentina. This is also mirrored in the sectoral distribution and volume of China’s investment.

Chinese greenfield FDI in LAC was modest and relatively flat through most of the 2000s and early 2010s, averaging just $1.5 billion per year across all sectors between 2005 and 2012. The post-2020 acceleration is the defining feature of China’s investment history in the region, with the rolling average total almost tripling from $5.5 billion in 2020 to $13.1 billion by 2024. Within that acceleration, two sectors drive almost all the growth.

Mining surged from an average of $1.4 billion per year from 2005 to 2012 to $2.9 billion from 2020 to 2024, peaking at $5.7 billion (on a rolling average basis) in 2023. This is the clearest expression of China’s resource-oriented strategy in LAC. Manufacturing also grew significantly, rising from $1.3 billion per year from 2005 to 2012 to $3.4 billion from 2020 to 2024, when it reached $5.2 billion. Automotive investment drove this growth, particularly as Chinese electric vehicle (EV) manufacturers expanded capacity in Brazil and Mexico.

What bears watching is a potential Chinese shift in investment strategy. In 2025, ByteDance announced a $40 billion data center investment in Brazil, making the digital sector China’s largest one in LAC that year. If it reflects a deliberate strategic choice by Chinese technology firms to build digital infrastructure in LAC at scale, it could signal a genuine reorientation of China’s investment profile toward the digital domain, where US firms have historically been strongest.

In the manufacturing sector, the US and Chinese investment trajectories in LAC have converged sharply. US manufacturing investment (on a rolling average basis) fell by 34 percent from its earlier-period average. Over the same period, Chinese manufacturing grew 166 percent, driven primarily by its EV manufacturers. Meanwhile, Chinese mining investment grew from a rolling average of $1.4 billion per year between 2005 and 2012 to $2.9 billion between 2020 and 2024, peaking at $5.7 billion in 2023. US mining investment, by contrast, has never exceeded $500 million (on a rolling average basis) in any year across the entire period, averaging just $200 million between 2020 and 2024—more than twenty times below China’s level in the same years.

As the United States explicitly calls for strengthening critical supply chains in the hemisphere, the gap between strategic rhetoric and actual capital deployment into LAC’s mineral wealth should be a call to action. Washington needs the minerals LAC holds and LAC governments need the capital and technology to develop them responsibly, yet US private investment flows into the sector have remained negligible while China’s have surged. It is a gap that serves neither US nor LAC interests, and one that well-designed US and LAC policies could close.

Comparing these economic powers across subsectors allows for a more nuanced assessment. In nonautomotive transport manufacturing (encompassing railroads, ships, and aircraft), China moved from near-zero presence through most of the 2000s to briefly surpassing US investment between 2021 and 2023, when its rolling average reached $194 million—more than triple the US average of $63 million. By 2024, their respective investment levels in this sector were roughly equal. While this sector remains small in absolute terms relative to the automotive or mining segments, the directional shift is notable: A domain of unchallenged US dominance now reflects a Chinese competitive presence. The clearest illustration of China closing the competition gap is in the automotive sector, where a US lead of more than four to one over China in the mid-2000s (with the US averaging $2.7 billion per year in rolling average terms) became parity in 2024 (with China’s rolling average of $2.6 billion vs. the US average of $2.5 billion).

In transportation and warehousing, including port and airport investments, the United States maintained an unchallenged position through 2018 against near-zero Chinese investment. From 2019 onward, China surged to a rolling average of $1.7 billion by 2020, briefly surpassing the United States before moderating. The episode demonstrates that China has both the capital and the strategic intent to build logistics presence in the region when opportunities align, a dynamic most visibly expressed in the Port of Chancay in Peru, where Chinese state-owned company COSCO shipping built a $3.5 billion megaport project.

To the extent that US policymakers want to increase their strategic footprint across Latin America, they must watch where China is gaining ground in strategic subsectors such as railroads, ports and airports, mining, and automotive manufacturing across LAC—and consider incentivizing US investment. Of course, not all subsectors have seen such Chinese gains vis-à-vis US investments. The United States, for instance, maintains overwhelming advantages in labor-intensive and knowledge-intensive subsectors generating the most employment and innovation spillovers. For example, it remains dominant in job-intensive food and beverages and tourism subsectors, as well as in knowledge-intensive software and IT services, financial services, and business services.

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Assessing the impact of US investment in LAC

Having established where US investment flows and how it compares to another major investor, the question that matters most to LAC governments is what that investment produces on the ground.

The impact assessment in this section combines two approaches. Where possible, it draws on greenfield FDI data to quantify the employment, capital, and sectoral effects of US investment across LAC. It complements this with examples of US companies operating in the region, which illustrate the on-the-ground mechanisms behind those aggregate figures. The case studies rely on companies’ own reporting of their activities and impacts.

1. Impact on employment and job quality

Foreign direct investment—irrespective of origin—has generated approximately 5.5 million direct jobs in LAC in the last two decades, which constitutes 4 percent of formal employment in the region.⁵OECD, “Assessing the Socio-Economic Impact.” When it comes to the largest contributors to job creation via greenfield FDI, European Union and US companies stand out as the largest foreign job creators in LAC (see figure 7). US companies have created 1.47 million jobs since 2006, while EU companies created 1.5 million jobs through greenfield FDI.⁶Employment figures are drawn from the Financial Times’ fDi Markets database, which compiles project-level data on capital investment and jobs created. Where direct figures are unavailable, employment is estimated using a standardized proprietary methodology. Importantly, over the last decade US investment generated 15 percent more jobs in LAC than in the previous decade. While far away from the EU and US levels of job creation in absolute terms, China’s contribution to job creation increased 132 percent between the two analytical periods, which mirrors its important increase in greenfield FDI.

Beyond the total number of jobs generated, a useful measure of FDI’s employment impact is job intensity: the number of jobs created per billion dollars invested (see figure 8). Here, US investment stands out most clearly. Between 2016 and 2025, US greenfield FDI generated approximately 3,091 jobs per billion dollars invested in LAC—22 percent more jobs per billion USD than EU investment, and 65 percent more jobs per billion USD than Chinese investment. This standing results from the sheer scale of its greenfield FDI in LAC and a sectoral mix weighted toward labor-intensive activities. While energy and digital infrastructure now command the largest share of US capital in the region, manufacturing and services remain the primary engines of US employment in LAC, generating over 80 percent of US-linked jobs despite accounting for only 62 percent of capital deployed. Within manufacturing, automotive and food and beverages are the largest job contributors. Within services, the US invests proportionally more than other foreign investors in software, business services, and retail, subsectors that generate substantially more jobs per dollar.

Two of Latin America’s three largest private employers are also directly linked to US capital: FEMSA, a massive beverage and retail operator and the bottler of the Coca-Cola Company in the region, as well as Walmart de México y Centroamérica (Walmex), the largest retailer in Mexico.⁷Finance Charts, “Biggest Employers.”

2. Impact on productivity and value chain linkages

Just as FDI can play a crucial role in employment creation it also contributes to productivity and value chain linkages. OECD evidence from a wide range of countries in LAC shows that foreign firms tend to be more productive than their domestic counterparts. In fact, in twenty-four out of thirty-one LAC economies, foreign firms have higher value-added per employee compared to domestic firms.⁸Finance Charts, “Biggest Employers.” These productivity gains occur through knowledge diffusion, supply chain linkages, and increased competitiveness. However, a key determining factor is the sectoral focus of the foreign investment. Capital-intensive sectors like energy or mining are more productive, yet FDI in these sectors tends to seek resources, meaning foreign firms often operate with limited integration into local supply chains.

Manufacturing, despite exhibiting lower average labor productivity, offers substantially greater potential for productive linkages. FDI in manufacturing is typically seeking efficiency and integrated within global value chains (GVCs), creating stronger opportunities for technology diffusion, supplier development, and local firm upgrading. The motor-vehicles sector illustrates this dynamic clearly: It is the single largest source of FDI-related employment in LAC and is heavily concentrated in Mexico, where US companies like General Motors and Ford have built deep local supplier networks over decades.

This distinction matters in assessing US investment. As shown in the previous section, US investment has slowed down in manufacturing over the past decade while expanding in energy and digital infrastructure. From a productive linkages perspective, this shift carries a cost because the sectors gaining the largest share of US capital are precisely those with the weakest potential for spillovers to domestic firms, while the sector with the strongest GVC-integration potential has seen US capital decline in both relative and absolute terms. The exception is digital services: US hyperscalers investing in data centers and cloud infrastructure are beginning to generate new forms of productive linkage through platform access, developer ecosystems, and skills demand that were not present in earlier decades. Examples include Microsoft’s and Amazon Web Services’ billion-dollar investments in data centers and cloud infrastructure in Chile, Brazil, or Mexico, which allow domestic firms to integrate into digital value chains.⁹Business Wire, “¹⁰Amazon to Invest.“¹¹

For LAC governments, the digital infrastructure investments of US hyperscalers represent a new frontier of productive linkage, one that operates through platform access and skills ecosystems rather than physical supply chains. For Washington, they represent the extension of American technological leadership into the digital infrastructure of the hemisphere, with strategic implications that extend well beyond the commercial returns to individual firms.

3. Impact on innovation and knowledge transfer

A third dimension of US investment quality concerns its contribution to innovation and knowledge transfer in LAC. FDI can drive innovation not only within foreign firms themselves but across the broader economy, by introducing new products and processes, transferring managerial and technical know-how, and stimulating local R&D activity. The evidence from LAC suggests that foreign firms are substantially more innovative than their domestic counterparts. Based on the OECD FDI Qualities Indicators, in twenty-four of thirty-one LAC countries, foreign companies are more likely to introduce new products, and in twenty-five out of thirty-one, they are more likely to invest in R&D.¹² OECD, “Assessing the Socio-Economic Impact.”

Within this landscape, US investment occupies a distinctive position. Its greenfield FDI in LAC is concentrated across technology- and knowledge-intensive sectors, encompassing high-technology manufacturing such as pharmaceuticals and electronics, medium-high-technology industries such as motor vehicles and chemicals, and high-technology knowledge-intensive services including digital and information and communication technology. In the last decade, the United States was the leading investor in high-technology manufacturing, accounting for 32 percent of greenfield FDI in that segment.¹³OECD, “Assessing the Socio-Economic Impact.” In high-technology knowledge-intensive services, the US share was more pronounced at 49 percent—nearly double the EU’s 22 percent—and its share in this category grew by 21 percentage points compared to the previous decade. US investment is therefore not only present in the most knowledge-intensive segments of LAC’s productive structure but increasingly dominant in them.

The value chain positioning of US investment reinforces this finding. While most greenfield FDI in LAC is going to core production activities such as manufacturing and extraction, US FDI stands out for its disproportionate presence in higher-value functions: strategic corporate activities, preproduction R&D, and postproduction activities such as marketing and after-sales services (see figure 9). These are the activities that drive knowledge transfer, diffuse managerial best practices, and anchor local innovation ecosystems—and the United States leads every other major investor origin in deploying capital there.¹⁴OECD, “Assessing the Socio-Economic Impact.” For LAC economies, attracting investment in these segments is central to upgrading their position in global value chains and moving domestic firms toward higher-value production.

On R&D specifically, the overall picture remains sobering. Across all investor origins, only 1.37 percent of total greenfield capital expenditure (CAPEX) flowing into LAC between 2016 and 2025 was directed toward R&D activities, well below, for example, the 3 to 4 percent that US and EU investors allocate to R&D in their global portfolios. The region is not yet capturing its fair share of the innovation investment that these companies deploy worldwide. Within that constrained total, however, the United States stands apart (see figure 10). US investors directed 2.49 percent of their LAC investment to R&D, by far the highest share of any major investor origin, nearly double the EU’s 1.26 percent, and more than three times China’s 0.68 percent. In absolute terms, US R&D investment in LAC reached $6.4 billion over the period, outpacing every other origin.

The medical-devices sector in Costa Rica offers an illustration of how US R&D investment generates lasting innovation spillovers in LAC. Home to more than one hundred multinational medtech companies, Costa Rica has evolved from a manufacturing base into an R&D hub, with approximately 40 percent of medical-device firms operating in the country now engaged in research and development activities.¹⁵Medical Device and Diagnostic Industry, “Why Costa Rica.“¹⁶ Boston Scientific alone operates an R&D division in Costa Rica with more than 300 professionals. The result is a self-reinforcing ecosystem: US firms brought manufacturing, then advanced it into design and R&D, pulling local suppliers, universities, and talent networks upward with them. Medical devices are now Costa Rica’s leading export category, generating $8.7 billion in exports in 2024, with the United States as the primary destination.¹⁷Tyler Berard, Executive Briefings on Trade series.

For LAC governments, US investment represents a reliable source of innovation spillovers among foreign investors, and designing policies that deepen and extend those spillovers is among the highest-return investments they can make. For Washington, the R&D leadership of American firms in LAC is evidence that US investment advances not just commercial interests but the broader objective of building a hemisphere where innovation capacity is concentrated among US-aligned partners. Both conclusions point in the same direction: toward policies that sustain, deepen, and broaden the US investment footprint in Latin America and the Caribbean.

Capitalizing on US investment in LAC

Policy implications for the US government

For US policymakers, this report offers both a validation and a warning. The validation is that the United States is LAC’s largest greenfield foreign investor by a wide margin, with decades of commercial relationships and private-sector presence spanning virtually every sector of the regional economy. That breadth is a strategic asset. US investment generates more jobs, more R&D spillovers, and more productive linkages than any competing investor, and it does so through a diffuse, market-driven model that state-directed competitors cannot easily replicate.

The warning is equally clear. In absolute terms, US investment is overwhelmingly concentrated in Mexico, Brazil, and Guyana. But even when measured relative to GDP, a more precise problem emerges: Several of the hemisphere’s most strategically relevant economies including Peru, Chile, and Argentina—countries with significant mineral endowments, growing middle classes, and strong political alignment with the United States—receive US private investment well below the regional average relative to their economic size. Beyond a reflection of market logic, it is a gap between where US private capital goes and where US strategic interests require deeper investments.

China, meanwhile, has made mining its largest LAC investment category and is building logistics and infrastructure presence across precisely these markets. In automotive and nonautomotive manufacturing and mining the competitive gap between US and Chinese investment is narrowing. The foundation of US hemispheric economic leadership is strong, but it is not self-sustaining. Maintaining it requires deliberate policy choices.

Recommendations

1. Mobilize investments across more geographies and strategic sectors. To enlist and expand partners across the western hemisphere, the US government should develop a coordinated LAC investment strategy that sets specific geographic and sectoral targets across government agencies, including the International Development Finance Corporation (DFC), Export-Import Bank, US Commercial Service, US Trade and Development Agency (USTDA), Millennium Challenge Corporation, and the State Department. Priority should be given to economies that are strategically significant but currently underserved by US private capital relative to their economic size. Peru, Chile, and Argentina stand out from the GDP-weighted analysis as countries where the gap between strategic importance and US investment intensity is largest, and where targeted government support could unlock investment flows that market logic alone is not generating. Consider the Central American economies where US strategic interests around migration and security are high, but US investment has dropped relative to the size of their respective economies; these nations represent a second tier of geographic priority where DFC and USTDA instruments could be deployed to build investment conditions that private capital will not create unilaterally.¹⁸This category excludes Costa Rica.

The DFC can use its recent recapitalization and broader geographic mandate to provide loans, loan guarantees, equity investments, or political risk insurance to US companies entering these strategic but underserved markets. To be more cost-effective, the DFC should leverage the regional expertise, project pipeline knowledge, and capital of the Inter-American Development Bank and its private-sector arm, IDB Invest, whose considerable local deployment capacity could help mobilize capital more efficiently. Additionally, the US Commercial Service operates trade offices across the region and is specifically mandated to connect US companies with commercial opportunities abroad. Increasing staffing, resources, and mandate specificity for Commercial Service offices in underserved LAC markets would improve the information environment for US companies considering entry into these geographies.

2. Incentivize critical minerals value chain creation in LAC. The US retreat from mining in LAC, documented in this report, represents one of the sharpest misalignments between rhetoric and capital deployment. China has filled part of that space, but its approach has been predominantly extractive, securing raw materials for domestic processing rather than building productive capacity in host countries.

This is where the United States has a potential competitive differentiator. The demonstrated quality of US investment and its capacity to generate local supplier networks, workforce development, and technology transfer mean that US-linked capital in LAC’s minerals sector can offer something China’s cannot: industrialization, not just extraction. Concretely, the US government should use the DFC and Ex-Im Bank to finance and facilitate not just extraction projects but downstream processing, refining, and component manufacturing facilities in LAC, turning raw mineral endowments into industrial capacity that serves both US supply chain needs and LAC’s development objectives.

Why not just build value creation in the United States? Critical minerals present a specific case where near-term domestic supply chain security cannot rely on domestic sources alone. While the United States holds meaningful mineral reserves, permitting timelines, processing capacity constraints, and cost structures mean that domestic extraction alone cannot meet US manufacturing needs at the pace required. Building processing and refining capacity in allied LAC economies, where extraction costs are lower and reserves are vast, is not an alternative to domestic industrial policy but a complement to it: It diversifies supply chains away from Chinese control, creates durable commercial ties with hemispheric partners, and can feed processed inputs into US manufacturing facilities rather than raw ore into Chinese refineries.

3. Sustain and accelerate US digital infrastructure investment. While US firms currently lead in digital infrastructure investment in LAC, Chinese companies are beginning to challenge that dominance, as the ByteDance announcement signals. The 2025 National Security Strategy is explicit on this point: The United States must prevent nonhemispheric competitors from owning or controlling strategically vital assets in the hemisphere and should harden existing and future cyber communications networks across the region using American security standards. Digital infrastructure (encompassing data centers, cloud platforms, and telecommunications networks) is precisely the category of assets the NSS describes.

When LAC governments and businesses choose US cloud and communications infrastructure over Chinese alternatives, they are making more than a commercial decision: They are choosing which country’s technology standards, security architecture, and data governance frameworks will define their digital economies for decades. The US government should therefore use its financing instruments to reduce the cost differential between US and Chinese digital infrastructure offerings in underserved LAC markets. In addition, the USTDA could also fund feasibility studies for a data center or cloud infrastructure project, which directly builds a pipeline for US companies.

Policy implications for LAC governments

The findings of this report make clear that US investment in LAC is neither monolithic nor evenly distributed. In absolute terms, three economies dominate due to market size, resources, and distinct production efficiencies. But measured relative to GDP, a broader and more instructive picture emerges, Costa Rica has attracted US investment at intensities that rival much larger economies by building deliberate sector-specific conditions, while several strategically relevant economies including Peru, Chile, and Argentina receive US investment well below the regional average relative to their economic size. The gap between these two groups is not primarily a function of market size or resource endowment. It is a function of policy. The recommendations that follow are organized around how LAC governments can move from the second group toward the first.

US investment tends to flow where markets are large, where resources are abundant, or where companies can find production efficiencies. That logic concentrates capital in large markets and resource economies. But it is not immutable. The value of US investment, from the jobs it creates to the productive linkages and technology transfers it generates, makes it worthwhile for LAC governments to pursue active policy choices rather than passive openness.

Recommendations

1. Seize the moment. The policy environment in Washington toward LAC is more explicitly focused on deepening hemispheric economic ties than it has been in decades. The 2025 National Security Strategy directs the full range of US government financing and commercial diplomacy instruments toward expanding US private-sector engagement in the region, and the February 2026 Critical Minerals Ministerial is one concrete expression of that intent. This is a window of opportunity, and windows close.

LAC governments that proactively engage US government instruments, are more likely to capture the investment flows they are designed to mobilize. The DFC can provide loans, equity, and political risk insurance for US companies entering underserved markets. USTDA can fund feasibility studies that reduce the transaction costs of US market entry. The Ex-Im Bank can finance US equipment and technology exports that anchor larger investment commitments. But these instruments require LAC government counterparts who understand what each can do, have identified specific projects that qualify, and are actively engaged in the bilateral channels through which project pipelines are built. Governments that bring well-structured project proposals to these institutions, backed by credible regulatory frameworks and clear investment terms, will consistently outcompete those that engage reactively or not at all. The combination of US government instruments reducing friction on one side and LAC governments reducing it on the other is precisely what is needed to redirect US private capital toward the markets and sectors that currently receive too little of it.

2. Develop sectoral investment attraction policies based on comparative advantage. Each government needs to honestly evaluate which type of US investment it is realistically positioned to attract given its market size, resource endowment, and workforce skills—and identify the specific sectors where US firms have unmet demand and where the country has or can build a credible comparative advantage. A small economy in Central America may not compete for market-seeking investment in consumer goods or financial services, but it may compete effectively for efficiency-seeking manufacturing or technology services investment if it builds the right conditions. This kind of sector-specific positioning is what separates the countries that have punched above their weight in attracting US capital from those that have not. Costa Rica’s above-average US investment intensity relative to GDP is not accidental: It reflects deliberate bets on specific sectors (medical devices and technology services) that created self-reinforcing ecosystems over time.

Identifying the right sectors is necessary but not sufficient. Governments also need to actively reduce the information and transaction costs that make entry unattractive for US firms. This entails investment promotion agencies that go beyond national branding to offer project-specific pipeline development, dedicated one-stop-shop licensing and permitting processes, and direct bilateral engagement with US industry associations in target sectors. The lesson from Costa Rica is that sector-specific investment promotion capacity, backed by pipeline development and industry engagement, generates returns that generic national marketing campaigns cannot replicate.

3. Compete on institutional quality to attract efficiency-seeking investment. To the extent that a government identifies efficiency-seeking investment as its desirable policy, this report shows that this type of US investment has the highest development returns, but it is also the most sensitive to investment environment quality. US firms locating efficiency-seeking operations abroad are making long-horizon commitments that require predictable rules, enforceable contracts, and reliable infrastructure.

For LAC governments, competing on institutional quality means prioritizing a specific set of reforms that US investors consistently identify as barriers to entry: intellectual property protection frameworks that meet US investor expectations, transparent and stable fiscal incentive regimes for target sectors, credible dispute resolution mechanisms that reduce the perceived risk of long-term commitment, and digital government systems that reduce bureaucratic friction in licensing and permitting. These are concrete variables that determine whether a US firm chooses one market over another when natural advantages are comparable. Governments should benchmark their investment environment against regional leaders like Chile and Costa Rica, identify the specific gaps that matter most to US investors in their target sectors, and sequence reforms accordingly rather than pursuing broad investment climate agendas that take a decade to produce visible results.

The authors would like to express sincere thanks to Carlos Daniel Jimenez and Saul Pineda of Universidad EIA in Colombia, for their research partnership and extensive data analysis. Moreover, special thanks to Consejo de Empresas Americas (CEA Colombia), American Chambers of Commerce (AmChams) in Colombia, Brazil, and Chile for their inputs and valuable insights into US investment to their respective countries. In addition, special thanks to Jason Marczak, Ignacio Albe, and Enrique Millán-Mejía for their guidance and editorial assistance. The authors would also like to thank Coca-Cola Latin America for its support of this project.

This report was written and published in accordance with the Atlantic Council’s policy on intellectual independence, which requires all donors to agree to the Council maintaining independent control of the content and conclusions of its work. The rapporteurs are solely responsible for this analysis and recommendations.

Staff

Martin Cassinelli

Associate Director

Adrienne Arsht Latin America Center

Economy & Business German

Advisory Council member

José Antonio González Anaya

Former Minister of Finance, Mexico

Adrienne Arsht Latin America Center

Financial Regulation Mexico

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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Image: A satellite image of Hurricane Beryl, just north of Venezuela, moving over the Caribbean Sea on July 1, 2024. Beryl made landfall on Carriacou, Grenada, as a category 4 storm before peaking as a category 5 hurricane on July 2—the earliest a storm has reached category 5 in the Atlantic hurricane season on record. Photo by GOES-16/ABI via Reuters.