China’s megaport opens path to Latin America as US wary

As the world watches to see how Donald Trump’s return will reshape the US-China relationship, China has just taken decisive action to solidify its position in Latin America.

Trump won the U.S. presidential election on the promise of imposing 60% tariffs on Chinese goods. But further south, a new mega-port backed by China has the potential to create an entirely new trade route that bypasses North America entirely.

This week, President Xi Jinping himself attended the opening of the port of Chancay on the Peruvian coast, a sign of how seriously China is taking development.

President Xi was visiting Peru for the Asia-Pacific Economic Cooperation Forum (APEC) annual meeting. But all eyes were on Chancai and what he said about China’s growing assertiveness in a region that the United States has traditionally considered its sphere of influence.

As experienced observers see, Washington is now paying the price for years of indifference to its neighbors and their needs.

Monica de Boer, a senior fellow at the Peterson Institute for International Economics in Washington, said: “The U.S. has been absent from Latin America for too long, and China has moved in so rapidly that the situation has been profoundly reconfigured over the past decade.” “It was,” he says.

“America’s backyard is directly involved with China,” she told the BBC. “That would be a problem.”

Even before it opened, the $3.5bn (£2.75bn) project, masterminded by Chinese state-owned company Cosco Shipping, was already transforming a once sleepy Peruvian fishing village into a logistics powerhouse that would transform the country’s economy. was.

The Chinese Communist Party’s official newspaper People’s Daily called it “proof of win-win cooperation between China and Peru.”

Peruvian President Dina Bolarte was equally enthusiastic, describing the megaport as a “nerve hub” that provides “a connection point to access huge Asian markets.”

But its impact extends far beyond the fate of a small Andean nation. Once Chancay is fully operational, goods from Chile, Ecuador, Colombia and even Brazil are expected to pass through Chancay on their way to Shanghai and other Asian ports.

China already has significant appetite for exports from the region, including soybeans from Brazil and copper from Chile. The new port will be able to handle larger vessels and reduce transit times from 35 to 23 days.

However, the new port will be beneficial not only for exports but also for imports. Chile and Brazil scrap tax exemptions for private customers on low-value purchases from abroad, amid growing signs that an influx of cheap Chinese goods bought online may be undermining domestic industries did.

As nervous U.S. military hawks have pointed out, if Changkai can accommodate super-large container ships, it can also accommodate Chinese warships.

The starkest warning came from Gen. Laura Richardson, who just retired as commander of U.S. Southern Command, which covers Latin America and the Caribbean.

He accused China of “playing the ‘long game’ of developing dual-use sites and facilities across the region,” adding that these sites “provide future multi-domain access for the[PLA and]military.” It could become a base,” he added. Naval Strategic Choke Points.”

Even if that prospect does not materialize, there is a strong perception that the United States is losing its position in Latin America as China advances its Belt and Road Initiative (BRI).

Outgoing US President Joe Biden was one of the leaders of the APEC summit on his first and last visit to South America during his four-year term. Media commentators said his numbers fell after China’s Xi Jinping.

Professor Álvaro Méndez, director of the Global South Unit at the London School of Economics, said that while the United States took Latin America for granted, President Xi regularly visited the region and He points out that they were nurturing relationships.

“The bar has been set so low by the US that China just needs to improve a little bit to get through the door,” he says.

Of course, Central and South America is not the only region targeted by One Belt, One Road. Since 2023, China’s unprecedented infrastructure splurge has poured money into nearly 150 countries around the world.

The results have not always been beneficial, with many projects left unfinished, while many developing countries that have taken part in Beijing’s mega-policy have found themselves in debt as a result.

Still, left-wing and right-wing governments alike have abandoned their initial suspicions about China because “their interests align with those of the Chinese government,” says the Peterson Institute’s De Ms. Boll says. necessity. “

De Boer said the U.S. doesn’t see any threat from the current turn of events because China has a “very strong foothold” in the region, which President-elect Trump wants to “rein”. He said it was natural to feel that way.

“You’ll finally start to see the United States start to put pressure on Latin America because of China,” she said, adding that most countries want to stay on the right side of the two great powers.

“Regions don’t have to choose unless they are put in a position where they are forced to do so, but that would be very foolish.”

Looking ahead, South American countries such as Peru, Chile, and Colombia appear to be vulnerable to pressure due to bilateral free trade agreements they have with the United States, and President Trump may seek to renegotiate or abandon them. be.

Both countries will be keeping a close eye on the outcome of the United States-Mexico-Canada Agreement (USMCA), which is scheduled to be reviewed in July 2026 but is expected to be negotiated in 2025.

Whatever happens, LSE’s Professor Mendes feels the region needs more cooperation.

“Not all roads lead to Beijing or Washington. Latin America must find a more strategic path. We need a coherent regional strategy,” he said, adding that 33 countries had agreed to a joint approach. He pointed out the difficulty of doing so. .

Eric Farnsworth, vice president of the Washington-based Council of the Americas, said there is still much goodwill for the United States in Latin America, but he feels the region’s “enormous needs” are not being met by its northern neighbor. are.

“The United States needs to strengthen its role in the region, because if there is a meaningful alternative to China, people will choose it,” he told the BBC.

Unlike many others, he sees a glimmer of hope in the incoming Trump administration, particularly in the appointment of Marco Rubio as Secretary of State.

“Mr. Rubio sees the need to engage economically with the Western Hemisphere in a way that we haven’t done in years,” he says.

But for successive U.S. leaders, Latin America has been viewed primarily in terms of illegal immigration and illegal drugs. And with President Trump clinging to his plan to deport a record number of immigrants, there is little sign that the U.S. will change course anytime soon.

Like the rest of the world, Latin America is bracing for an eventful four years. If the United States and China start a full-scale trade war, the region could be caught in the crossfire.