Trump Sanctions Chilean Officials Over China-Linked Subsea Cable, Escalating Tech Infrastructure Battle

Trump Sanctions Chilean Officials Over China-Linked Subsea Cable, Escalating Tech Infrastructure Battle

The Trump administration imposed visa restrictions on three Chilean government officials last week over their involvement in a subsea cable project proposed by Chinese firms, marking the latest flashpoint in Washington's campaign to limit Beijing's influence over critical digital infrastructure in Latin America.

U.S. Secretary of State Marco Rubio announced the sanctions citing security threats, a move that caught Santiago off guard and threatens to complicate relations with Chile's incoming right-wing government, which takes office March 11. The timing—just two weeks before the transition—suggests the White House is moving aggressively to shape the new administration's approach to Chinese infrastructure investments before it settles in.

Chile's outgoing President Gabriel Boric condemned the visa sanctions and rejected claims that his government "promotes any action that threatens our security or that of the region." His administration later confirmed that one of the sanctioned officials is Juan Carlos Muñoz, Chile's Minister of Transport and Telecommunications, though it declined to comment further on the other two individuals targeted.

The dispute puts Chile in an increasingly familiar bind for Latin American nations: Washington remains its top foreign investor while Beijing serves as its largest trading partner. That dual dependency creates what finance chiefs at Chilean multinationals have privately described as a "choose your patron" dilemma, particularly when infrastructure decisions carry geopolitical weight.

Subsea cables, while rarely making headlines, carry roughly 95% of intercontinental data traffic and have become a central arena in U.S.-China competition. The Trump administration has systematically pressured allies to exclude Chinese firms from telecommunications infrastructure projects, arguing that Beijing could exploit access for espionage or sabotage. Chinese officials have repeatedly denied such intentions, calling the concerns overblown.

For CFOs at companies operating across the Americas, the Chilean sanctions signal that infrastructure procurement decisions—traditionally viewed as technical and commercial matters—now carry diplomatic risk. The visa restrictions represent a relatively light touch compared to economic sanctions, but they establish a precedent for penalizing officials who advance Chinese-linked projects that Washington deems problematic.

The sanctions arrive as Chile's political landscape shifts rightward. The incoming government, which campaigned on economic growth and foreign investment, now inherits a diplomatic mess that will test its ability to maintain productive relations with both superpowers. How Santiago responds—whether it proceeds with the cable project, seeks alternative vendors, or attempts to negotiate with Washington—will likely influence how other Latin American governments approach similar decisions.

What remains unclear is whether the Trump administration coordinated its move with Chile's incoming leadership or blindsided both governments simultaneously. That distinction matters: if the sanctions were designed to give the new government political cover to cancel the project, it's a calculated play. If not, it's a warning shot that could backfire by appearing to dictate terms to a sovereign ally.