Chile continues to be a strong trading partner and export market for U.S. companies, largely due to its open market policies, zero tariffs, solid business practices, and low corruption index. The country’s history of economic and political stability, transparency, and strong democratic institutions, allows for political discourse, public protests, and peaceful elections.

However, after 40-years of relative economic stability, social unrest and protests that started in 2019 have introduced an element of uncertainty in Chile. Since his term began in March 2022, President Gabriel Boric and his team have proposed broad tax reforms to finance additional social programs outlined in his agenda. Investors and the business community are apprehensive about current government proposals to expand the role of government in the economy and provide expansive social services by reducing the involvement of the private sector. Although the Congress is divided evenly among left- and right-leaning political parties, some pending legislation could bring significant change to business rules and regulations, particularly in industries such as mining, energy, water, healthcare, and financial services. In September 2022, Chileans rejected a new constitution that was drafted in response to the civil unrest, and a new Constitutional Congress was appointed for a second redraft in 2023. However, analysts expect economic uncertainty to continue into 2024 as the Congress takes on reforms and addresses the outcome of the Constitutional plebiscite in December 2023.

Chile continues to experience economic impacts from the lingering effects of the COVID-19 pandemic, and energy and overall price increases resulting from international and regional instabilities that have exacerbated inflation. After soaring consumer prices raised inflation rates to nearly 14 percent in 2022, the Chilean Central Bank reported in August 2023 that inflation rates were falling somewhat faster than expected, though still above the desired three percent level.[1] According to the OECD “Chile Economic Snapshot” (June 2023), economic activity in Chile is expected to drop by less than one percent in 2023 but increase by almost two percent in 2024. Despite economic uncertainty, the overall perception of the Chilean market is good given global conditions.

Bilateral trade in goods and services between the United States and Chile has quintupled since the inception of the United States - Chile Free Trade Agreement (U.S.-Chile FTA), now concluding its twentieth year. As of January 1, 2004, duties were reduced to zero on 90 percent of U.S. exports to Chile, and in January 2015, all remaining tariffs were phased out. Accordingly, all U.S.-origin products enter Chile tariff free, except for some alcoholic and non-alcoholic products and some luxury goods, which are subject to excise taxes. In 2022, bilateral trade in goods between the United States and Chile totaled nearly $38 billion, and bilateral trade in services for 2022 totaled nearly $11 billion. Overall, bilateral trade flows between the United States and Chile are well-balanced, with the United States exporting mineral fuels and machinery in exchange for Chile’s copper and agricultural products.

Chile continues to pursue market-oriented strategies, expand global commercial ties, and actively participate in international issues and hemispheric free trade. Chile is a member of the Pacific Alliance, the Rio Group, an associate member of Mercosur, a full member of the Asia Pacific Economic Cooperation (APEC), the Union of South American Nations (UNASUR), and the World Trade Organization. Chile became the 31st member of the Organization for Economic Cooperation and Development (OECD) in 2010, only the second Latin American country to join after Mexico.

Political Environment

Visit State Department’s website for background on Chile’s political and economic environment.

[1] Panorama Económico en Chile e Implicancias para la Política Monetaria, Rosanna Costa, August 10, 2023 (Spanish) (Available at: https://www.bcentral.cl/en/content/-/details/panorama-economico-en-chile-e-implicancias-para-la-politica-monetaria-rosanna-costa, last visited 8/17/2023)