Updated October 5, 2021
Chile: An Overview
Chile, located along the Pacific coast of South America,
improvements in living standards over the past 30 years ,
traditionally has been one of the United States’ closest
inequality remains high and most Chileans view the
partners in Latin America. The country’s transition to a
country’s income, education, and health disparities as
higher level of economic development has enabled it to
unjust. Chileans have registered their discontent with the
play a more active role in foreign affairs , often in
status quo through repeated electoral swings, but changes in
collaboration with the United States.
government have resulted in limited reforms to the
country’s economic model and its reliance on the private
Figure 1. Chile at a Glance
sector for the provision of social services.
With the political system unwilling or unable to channel
Chileans’ preferences, many people have taken to the
streets in mass mobilizations. Social unrest spiraled into
violence in October 2019, when protests against an increase
in transit fares in Santiago were accompanied by vandalism,
arson, and looting. President Piñera’s decision to declare a
state of emergency and deploy the military to enforce a
curfew appears to have triggered a backlash, leading
millions of Chileans across the country to join the protests.
In an effort to restore peace and respond to demands for a

new social contract, the Piñera administration and
Sources: CRS Graphics; Instituto Nacional de Estadísticas;
legislators from across the political spectrum agreed to hold
Latinobarómetro; International Monetary Fund; Trade Data Monitor;
a plebiscite on whether to replace the Pinochet-era
and Ministerio de Desarrol o Social y Familia.
constitution. The plebiscite passed with overwhelming
support, and in May 2021, Chileans elected a constituent
Political and Economic Situation
assembly in which predominantly left-leaning independents
hold a plurality of seats. The assembly may seek to increase
Chile has a long democratic tradition but experienced 17
the state’s role in social service provision, reduce private
years of authoritarian rule after a 1973 military coup led by
control over water and other natural resources, grant
General Augusto Pinochet deposed the democratically
autonomy to Indigenous peoples, and decentralize
elected Socialist government of President Salvador Allende
governance, among other changes. Each element of the
(1970-1973). More than 3,200 people were killed or
“disappeared,” and some 38,000 people were imprisoned
constitution would need the approval of a two-thirds
majority of the assembly, and the final draft is to be
and/or tortured during the Pinochet dictatorship. Chile
submitted to a national referendum in 2022.
ultimately restored a democratic system of government in
1990. A center-left coalition of parties dominated Chilean
Chile is scheduled to hold presidential and congressional
politics for two decades after the transition.
elections on November 21, 2021. In late September 2021,
the Chilean polling firm Cadem found Gabriel Boric—a 35-
President Sebastián Piñera of the center-right Let’s Go
year-old former student leader and leftist member of the
Chile coalition was inaugurated to a second nonconsecutive
Chamber of Deputies —leading the presidential race with
term in March 2018. He took office pledging to enact
22% support. He was followed by José Antonio Kast, a
business-friendly tax and labor reforms but struggled to
move many of his proposals through Chile’s fragmented
rightist former member of the Chamber of Deputies (15%);
Sebastián Sichel, a former Piñera administration official
Congress. Piñera effectively abandoned much of his agenda
nominated by the center-right ruling coalition (12%); and
in the face of mass protests in October 2019. He has spent
Yasna Provoste, senate president nominated by Chile’s
the past two years trying to contain social unrest while
traditional center-left coalition (12%). If no candidate wins
addressing the health and economic challenges posed by the
a majority of the vote, a runoff between the top two
Coronavirus Disease 2019 (COVID-19) pandemic. An
candidates is to take place on December 19, 2021.
August 2021 poll conducted by the Centro de Estudios
Públicos found that 16% of Chileans approved of Piñera’s
Pandemic Response and Economic Recovery
performance in office and 68% disapproved.
Chile confirmed its first case of COVID-19 in March 2020,
Social Unrest, Constitutional Reform, and Elections
leading the Piñera administration to impose a variety of
containment measures. Piñera resisted calls for a national
According to a 2020 Latinobarómetro poll, 76% of
quarantine, opting to impose restrictions on municipalities
Chileans are dissatisfied with how democracy functions in
and regions in accordance with local conditions to avoid
their country. Although Chile has experienced significant
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Chile: An Overview
shutting down the entire economy. Chile had one of the
U.S. and Chilean trade policies have diverged somewhat
world’s fastest vaccine rollouts in 2021, primarily using the
over the past four years as the United States has adopted
CoronaVac produced by China’s Sinovac. Infections spiked
more protectionist policies. In January 2017, the Trump
during the first half of the year, but have declined
Administration withdrew from the Trans-Pacific
significantly since mid-June, when the government imposed
Partnership trade agreement, which had been signed a year
a temporary lockdown on the Santiago metropolitan region.
earlier by the United States, Chile, and 10 other nations in
As of October 5, 2021, Johns Hopkins University reported
the Asia-Pacific region. Chile worked with the other
there had been 1.66 million cases and 37,500 deaths from
signatories to save the agreement, helping to forge a revised
COVID-19 in Chile, and nearly 75% of Chile’s population
Comprehensive and Progressive Agreement for Trans-
was fully vaccinated.
Pacific Partnership in 2018. Chile has yet to ratify the
agreement due to a lack of consensus in the Chilean senate.
According to the International Monetary Fund (IMF),
Chile’s economy contracted by 5.8% in 2020, but the
The United States and Chile also have differed on relations
government’s aggressive policy response has helped
with China—Chile’s top trade partner. Chile signed a
mitigate the impact of the downturn and accelerate
cooperation agreement on the Belt and Road Initiative in
economic recovery. The Piñera administration is
2018, upgraded its bilateral free-trade agreement with
implementing a $34 billion (13% of GDP) multi-year fiscal
China in 2019, and joined the China-backed Asian
package that includes increased funding for the healthcare
Infrastructure Investment Bank in July 2021. U.S. officials
system, tax deferrals, enhanced subsidies and
have expressed concerns about Chile’s ties to China,
unemployment benefits, income support for vulnerable and
warning that Chinese investment often fosters corruption
middle class households, and credit for small- and medium-
and that using Chinese equipment in the country’s fifth
sized businesses. The IMF forecasts that Chile’s economy
generation (5G) telecommunications network could
will grow at 6.5% in 2021, driven by the government
compromise Chile’s national security, intellectual property,
support package, higher copper prices, and economic
and data privacy. Some Chilean legislators have sought to
recovery among major trading partners.
limit the influence of Chinese state-owned companies in
strategic sectors, but the Piñera administration has opposed
U.S.-Chile Relations
restrictions on Chinese investment.
Although the United States initially supported the Pinochet
dictatorship, it also helped foster the restoration of
Regional and Global Cooperation
democracy in Chile. Since the political transition, the
Chile has supported a variety of regional peace and security
United States and Chile have maintained close commercial
efforts over the past decade, including several U.S.-backed
and defense ties and worked together to promote democracy
initiatives. The country was one of the top contributors to
and human rights throughout the region. The Biden
the U.N. Stabilization Mission in Haiti and helped to
Administration also has sought to collaborate with Chile on
facilitate the peace process in Colombia. Chile also has
shared challenges, such as the COVID-19 pandemic,
supported efforts to restore democracy in Venezuela and
climate change, and regional migration flows.
foster development in Central America. The United States
and Chile maintain a High-Level Bilateral Political
Trade and Investment Relations
Consultative Mechanism to coordinate on security
U.S.-Chile trade relations have grown considerably since
cooperation, human rights, and other topics of mutual
the U.S.-Chile Free Trade Agreement entered into force in
concern. They also work together under the U.S.-Chile
2004 (P.L. 108-77). Total bilateral trade in goods reached
Trilateral Development Cooperation Initiative to jointly
$22.6 billion in 2020, a 13.5% decline compared to 2019,
implement foreign aid projects in other countries.
according to U.S. Department of Commerce data. U.S.
goods exports to Chile amounted to $12.5 billion in 2020,
In FY2020, the United States provided $553,000 in
with mineral fuel, machinery, and civilian aircraft and parts
International Military Education and Training (IMET) aid
accounting for a majority; U.S. goods imports from Chile
to Chile to enhance Chile’s peacekeeping activities,
amounted to $10.1 billion, with copper, salmon, and fruit
strengthen the capabilities of the Chilean armed forces, and
accounting for a majority.
improve interoperability with U.S. forces . Chile is receiving
an estimated $455,000 of IMET aid in FY2021, and the
Chile’s open economy, well-developed institutions, and
Biden Administration has requested $450,000 of IMET aid
strong rule of law make it an attractive destination for
for Chile in FY2022.
investment. According to the U.S. Bureau of Economic
Analysis, the accumulated stock of U.S. foreign direct
President Piñera was among the 40 world leaders invited to
investment in Chile stood at $23 billion in 2020, with
participate in the Biden Administration’s April 2021
significant investments in the mining, manufacturing, and
climate summit. Chile is not a major source of greenhouse
finance sectors. In comparison, the stock of Chilean foreign
gas emissions, but it has taken on a leadership role in
direct investment in the United States totaled $3 billion. A
climate diplomacy and it was one of the first governments
bilateral treaty (Treaty Doc. 112-8) designed to encourage
in the world to increase its Paris Agreement commitments.
investment in both countries by preventing double taxation
The country intends to reduce its annual net greenhouse gas
was ratified by Chile but has been awaiting the advice and
emissions by about 30%, compared to 2016 levels, by 2030.
consent of the U.S. Senate since 2012.
Peter J. Meyer, Specialist in Latin American and Canadian
Affairs
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Chile: An Overview

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