Peru’s new megaport has been built by the Chinese. It is part of their worldwide strategy, called “Belt and Road” which pores millions of dollars into developing nations as a way of extending its influence and, ultimately, its control. As the world waits to see how the return of Donald Trump will reshape relations between Washington and Beijing, China has just taken decisive action to entrench its position in Latin America.
Trump won the US presidential election on a platform that promised tariffs as high as 60% on Chinese-made goods. Further south, though, a new China-backed megaport has the potential to create whole new trade routes that will bypass North America entirely. President Xi Jinping himself attended the inauguration of the Chancay port on the Peruvian coast this week, an indication of just how seriously China takes the development.
Xi was in Peru for the annual meeting of the Asia-Pacific Economic Co-operation Forum (Apec). But all eyes were on Chancay, and what it says about China’s growing assertiveness in a region that the U.S. has traditionally seen as its sphere of influence. As seasoned observers see it, Washington is now paying the price for years of indifference towards its neighbours, and their needs.
“The US has been absent from Latin America for so long, and China has moved in so rapidly, that things have really reconfigured in the past decade,” says Monica de Bolle, senior fellow at the Peterson Institute for International Economics in Washington. “You have got the backyard of America engaging directly with China. That’s going to be problematic.”
Even before it opened, the $3.5bn (£2.75bn) project, masterminded by China’s state-owned Cosco Shipping, had already turned a once-sleepy Peruvian fishing town into a logistical powerhouse set to transform the country’s economy. But the implications go far beyond the fortunes of one small Andean nation. Once Chancay is fully up and running, goods from Chile, Ecuador, Colombia, and even Brazil, are expected to pass through it on their way to Shanghai and other Asian ports.
China already has considerable appetite for the region’s exports, including Brazilian soybeans and Chilean copper. Now this new port will be able to handle larger ships, as well as cutting shipping times from 35 to 23 days. However, the new port will encourage imports as well as exports. An influx of cheap Chinese goods, bought online, will almost certainly undermine domestic industry.
As nervous U.S. military hawks have pointed out, if Chancay can accommodate ultra-large container vessels, it can also handle Chinese warships. The most strident warnings have come from General Laura Richardson, who has just retired as chief of U.S. Southern Command, which covers Latin America and the Caribbean. She has accused China of “playing the ‘long game’ with its development of dual-use sites and facilities throughout the region”, adding that those sites could serve as “points of future multi-domain access for the People’s Liberation Army, and strategic naval chokepoints”. Even if that prospect never materialises, there is a strong perception that the U.S. is losing ground in Latin America as China forges ahead with its Belt and Road Initiative (BRI).
Professor Álvaro Méndez, director of the Global South Unit at the London School of Economics, points out that while the U.S. was taking Latin America for granted, Xi was visiting the region regularly and cultivating good relations. “The bar has been set so low by the U.S. that China only has to be a little bit better to get through the door,” he says.
Looking ahead, South American countries such as Peru, Chile and Colombia would be vulnerable to pressure from the U.S. because of the bilateral free trade agreements they have signed, which Trump could seek to renegotiate or even tear up. They will be watching keenly to see what happens to the United States-Mexico-Canada Agreement (USMCA), which is up for review in July 2026, but will be subject to negotiations during 2025. There is also the possibility that Trump will ignore China’s ambitions in Latin America as he cosies up to his “friend” Xi.
Whatever happens, Prof Méndez of the LSE feels that the region needs more co-operation. Eric Farnsworth, vice-president at the Washington-based Council of the Americas, feels that there is still much goodwill towards the U.S. in Latin America, but the region’s “massive needs” are not being met by its northern neighbour. “The U.S. needs to up its game in the region, because people would choose it if there was a meaningful alternative to China”.
Successive U.S. leaders, have seen Latin America primarily in terms of illegal migration and illegal drugs. That myopic approach approach could well come back to haunt the United States as China increases its influence in the region. In addition, Trump’s fixation on plans to deport record numbers of immigrants, certainly won’t help.
China’s ability to plan long-term is a formidable challenge to all Western nations, when they can only plan for a few years until their next elections. Short of regime change in China, which looks unlikely, China may well be destined to win this game of attempted world domination through their “Belt and Road Initiative”, and it is difficult to see how the West can stop it, short of war. One way might be to pay attention to its neighbours to the south, at least in terms of South America.
