The war caused considerable panic in the region as large portions of their economies depended on trade with the European market, which was completely disrupted due to the war.
Latin America tried to stay neutral at first but the warring countries were endangering their neutrality. In order to better protect the Panama Canal , combat Axis influence, and optimize the production of goods for the war effort, the United States through Lend-Lease and similar programs greatly expanded its interests in Latin America, resulting in large-scale modernization and a major economic boost for the countries that participated.
Strategically, Panama was the most important Latin American nation for the Allies because of the Panama Canal, which provided a link between the Atlantic and Pacific Oceans that was vital to both commerce and defense. Brazil was also of great importance because of its having the closest point in the Americas to Africa where the Allies were actively engaged in fighting the Germans and Italians , as well as being a vital source for strategic raw materials such as rubber, iron ore and quartz crystals, [ 2 ] while Argentina was a critical supplier of foodstuffs to the Allies accepting deferred payment by Britain, which was acknowledged as a major contribution to the Allied war effort.
Brazil was the only country to send troops to the European Theater , was instrumental in providing air bases for the resupply of the combatants, and had an important part in the anti-submarine campaign of the Atlantic.
Several other countries also had skirmishes with German U-boats and cruisers in the Caribbean and South Atlantic. Additionally, over 4, Argentine volunteers fought for the Allies during WWII, even though Argentina was officially a neutral country for most of the war. The Brazilian active participation on the battlefield in Europe was sought after the Casablanca Conference. The President of the U. This meeting is known as the Potenji River Conference , and defined the creation of the Brazilian Expeditionary Force.
