Still, U.S. efforts to diversify supply chains with “trusted partners and allies” including select South American nations have “tremendous potential benefits for fueling growth in Latin America and the Caribbean,” Yellen said in a speech delivered Thursday.

Yellen kicked off an Inter-American Development Bank investment event on the sidelines of the inaugural Americas Partnership for Economic Prosperity Leaders’ Summit, which will be hosted at the White House on Friday.

The heads of state of Peru, Chile, Ecuador, Uruguay, the Dominican Republic and Costa Rica were in attendance.

Yellen, who regularly talks about her friendshoring strategy for increasing supply chain resilience by working primarily with friendly nations as opposed to geopolitical rivals like China, laid out her vision of new U.S. investment in South America at the development bank on Thursday.

Latin American businesses “will increasingly have the chance to lead in new areas of clean energy, for example, helping create vertical supply chains by using locally extracted lithium in local battery production,” Yellen said.

“Medical equipment and pharmaceutical companies can grow and innovate to meet increased demand,” Yellen said, and skilled workers can produce automotive chips necessary for electric vehicles.

The Inter-American Development Bank, which is the biggest multilateral lender to Latin America, would support new projects through grants, lending and new programs. The U.S. is the bank’s largest shareholder, with 30% of voting rights.

Increasingly, policymakers in the U.S. have expressed concern about China’s influence at the bank. While the Asian superpower holds less than 0.1% voting rights, it holds large economic stakes in some of the 48 member countries of the bank.

In 2022, Latin American and Caribbean trade with China rose to record levels, exporting roughly $184 billion in goods to China and importing an estimated $265 billion in goods, according to a Boston University Global Development Policy Center analysis.

And diplomatic relations between Latin America and China have also increased. In March, Honduras cut diplomatic ties with Taiwan in favor of China, following the steps of El Salvador, Nicaragua, Panama and the Dominican Republic in turning their backs on Taiwan. China claims Taiwan as its own territory and has been increasingly sending ships and warplanes across the Taiwan Strait in an effort to intimidate the population of 23 million, who strongly favor the status quo of de-facto independence.

The IDB’s president, Ilan Goldfajn, told The Associated Press that the U.S. is still a most influential member at the bank.

“Whenever we have a U.S. company in the bidding process, the probability of winning is 70 to 80%,” he said. “So what we need is more U.S. companies involved. But if you’re not involved, this opens the door for anybody” to invest in Latin America.

U.S. lawmakers this year proposed the Inter-American Development Bank Transparency Act, which would require the Treasury Department to issue a report every two years on the scope and scale of Chinese influence and involvement in all aspects of the bank, including a list of Chinese-funded projects and an action plan for the U.S. to reduce Chinese involvement at the bank. The bill has not moved out of committee.

Latin America will be a region of increased focus in the next year, as Brazil takes the presidency of the Group of 20 international forum.

A Treasury official told the AP that Yellen will be traveling frequently to South America and Latin America over the next year, due to Brazil’s G-20 presidency.

***Fatima Hussein reports on the U.S. Treasury Department for The Associated Press. She covers tax policy, sanctions and any issue that relates to money.