Reuters
Peru's new megaport is built by China
While the world waits to see how the return of Donald Trump will reshape relations between Washington and Beijing, China has just taken decisive steps to consolidate its position in Latin America.
Trump won the US presidential election on a platform promising tariffs of up to 60% on goods made in China. Further south, however, a new Chinese-backed megaport has the potential to create entirely new trade routes that will bypass North America entirely.
President Xi Jinping himself attended the inauguration of the port of Chancay on the Peruvian coast this week, an indication of how seriously China is taking this development.
Xi was in Peru for the annual meeting of the Asia-Pacific Economic Cooperation (Apec) Forum. But all eyes were on Chancay and what he said about China's growing assertiveness in a region that the United States has traditionally considered its sphere of influence.
As seasoned observers note, Washington is now paying the price for years of indifference to its neighbors and their needs.
“The United States was absent from Latin America for so long and China entered so quickly that things have really reconfigured themselves over the last decade,” says Monica de Bolle, a senior researcher at the Institute. Peterson of international economics in Washington.
“You have America's backyard engaging directly with China,” she told the BBC. “This is going to be problematic.”
Reuters
The Chinese company Cosco Shipping holds the exclusive operating rights of the megaport
Even before it opened, the $3.5 billion (£2.75 billion) project, orchestrated by Chinese state-owned Cosco Shipping, had already transformed a once-sleepy Peruvian fishing town into a logistics powerhouse destined to transform the country's economy.
The Chinese Communist Party's official newspaper, People's Daily, called it “a vindication of win-win cooperation between China and Peru.”
Peruvian President Dina Boluarte was equally enthusiastic, describing the megaport as a “nerve center” that would provide “a connection point to access the gigantic Asian market.”
But the implications go far beyond the fortunes of a single small Andean nation. Once Chancay is fully operational, goods from Chile, Ecuador, Colombia and even Brazil are expected to transit there en route to Shanghai and other Asian ports.
China already has a considerable appetite for the region's exports, including Brazilian soybeans and Chilean copper. This new port will now be able to accommodate larger ships and reduce transport times from 35 to 23 days.
However, the new port will promote imports as well as exports. Amid growing signs that an influx of cheap Chinese goods purchased online could hurt the domestic industry, Chile and Brazil have removed tax exemptions for individual customers on low-cost foreign purchases. value.
Reuters
Brazilian soybeans and other raw materials can now reach China faster
As nervous US military hawks have pointed out, if Chancay can accommodate ultra-large container ships, it can also accommodate Chinese warships.
The sharpest warnings came from Gen. Laura Richardson, who just retired as head of U.S. Southern Command, which covers Latin America and the Caribbean.
She accused China of “playing the 'long game' by developing dual-use sites and facilities throughout the region,” adding that such sites could serve as “future multi-domain access points for (the Army) People's Liberation) and strategic naval choke points.
Reuters
US fears new Peruvian megaport could end up welcoming Chinese warships
Even if this prospect never materializes, there is a strong perception that the United States is losing ground in Latin America as China pursues its Belt and Road Initiative (BRI).
Outgoing US President Joe Biden was among the leaders at the Apec summit, in his first and final visit to South America during his four-year term. Media commentators pointed out that he was in the background next to China's Xi.
Professor Álvaro Méndez, director of the Global South Unit at the London School of Economics, points out that while the United States took Latin America for granted, Xi visited the region regularly and maintained good relations.
“The bar has been set so low by the United States that China just has to do a little better to get through the door,” he says.
Of course, Latin America is not the only part of the world targeted by the BRI. Since 2023, China's unprecedented infrastructure splurge has pumped money into nearly 150 countries around the world.
The results have not always been beneficial, with many projects remaining unfinished, while many developing countries that benefited from Beijing's largesse found themselves burdened with debt.
Despite this, governments on the left and right have put aside their initial suspicions about China because “their interests are aligned” with those of Beijing, explains Ms. de Bolle of the Peterson Institute: “They have let their guard down out of simple necessity.”
Reuters
The Apec summit in Peru highlighted the complex relationships between the United States, China and Latin America.
According to Ms. de Bolle, the United States is right to feel threatened by this turn of events, since Beijing has now established “a very strong foothold” in the region, at a time when President-elect Trump wants to “control” China. .
“I think we're finally going to start to see the United States putting pressure on Latin America because of China,” she says, adding that most countries want to stay on the right side of the two great powers.
“The region doesn’t have to choose unless it’s put in a position where it’s forced to, and that would be very stupid.”
In the future, South American countries like Peru, Chile and Colombia would be vulnerable to pressure because of the bilateral free trade agreements they have with the United States, which Trump may seek to end. renegotiate, or even tear up.
They will be closely watching what happens to the United States-Mexico-Canada Agreement (USMCA), which is due for review in July 2026, but will be subject to negotiations in 2025.
Whatever happens, LSE's Professor Méndez believes the region needs more cooperation.
“All roads must not lead to Beijing or Washington. Latin America must find a more strategic path, it needs a coherent regional strategy,” he said, highlighting the difficulty of bringing 33 countries to agree on a common approach. .
Eric Farnsworth, vice president of the Washington-based Council of the Americas, says there is still a lot of goodwill toward the United States in Latin America, but that the region's “massive needs” are not being met. satisfied by its northern neighbor.
“The US needs to up its game in the region because people would choose it if there was a meaningful alternative to China,” he told the BBC.
Unlike many others, he sees glimmers of hope in the new Trump administration, particularly with the nomination of Marco Rubio as secretary of state.
“Rubio really feels the need to engage economically with the Western Hemisphere in a way that we haven't done in several years,” he says.
But for successive U.S. leaders, Latin America has been viewed primarily in terms of illegal migration and illegal drugs. And with Trump obsessed with deporting record numbers of immigrants, there is no sign that the United States will change course any time soon.
Like the rest of the world, Latin America is bracing for a tough four years – and if the US and China start a full-blown trade war, the region risks being caught in the crossfire.
