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This is win-win.
US citizens can now visit Chile without getting dinged on arrival for $160 (which was good for the life of the passport). Chile is a great destination, though not a low cost destination, and tacking on $160 dissuaded some travelers or led them to methods to circumvent the fee. Southern South America airfares generally are not cheap, however deals for Chile pop up with some regularity. This helps Chile’s economy bring in new tourist dollars.
Chileans now have much-reduced hassle to visit the US. I have gotten visas to countries from Saudi Arabia to Iran to North Korea and none has been as difficult, overall costly, confusing and capricious as getting a US visa. This penalizes legitimate travelers that have many options in the world for their tourist spend. Anyone seeing a US-Chile flight at check-in will know the massive, overstuffed suitcases of Chileans from their US shopping trips.