Picture: ANDREW KACIMAIWAI
A new Chinese-built ‘megaport’ at Chancay, Peru, could create new trade routes between South America and China that could bypass North America entirely.
The move comes amid rising expectations that US President-elect Donald Trump will deliver tariffs as high as 60 per cent on Chinese goods.
The $3.5bn port is a co-operative project between Peru and China as part of Beijing’s Belt and Road Initiative (BRI); it is expected to reduce shipping time from Peru to China down to 23 days and cut logistics costs by at least 20 percent.
Goods from Chile, Ecuador, Colombia and even Brazil are expected to pass through it on their way to Shanghai and other Asian ports.
The port is expected to generate $4.5 billion annually for Peru, create over 8000 direct jobs and accommodate ultra-large container ships for imports and exports.
President Xi Jinping attended the inauguration of the port while he was in the country for the recent meeting of the Asia-Pacific Economic Co-operation Forum (APEC).
Peruvian Foreign Minister Elmer Schialer Salcedo said: “The Pacific Ocean does not separate us, but it connects us.”
Some observers say Washington DC is paying the price for years of indifference, according to the BBC World News.
“The US has been absent from Latin America for so long, and China moved in so rapidly, that things have really reconfigured in the past decade,” says Monica de Bolle, a senior fellow at the Peterson Institute for International Economics in Washington, told the BBC.
“You have got the backyard of America engaging directly with China. That’s going to be problematic.”
As some in the US point out, if Chancay can accommodate ultra-large container vessels, it can handle Chinese warships. And there is a suspicion that such a port can offer access for the Chinese army and serve as naval chokepoints.
But there also remains a strong perception that the US is losing ground in Latin America as China forges ahead with its BRI.
Outgoing US President Joe Biden was at the APEC summit, his first and last visit to South America while President Xi has been a regular visitor to the region.
South American countries such as Peru, Chile and Colombia have bilateral free trade agreements with the US and will be watching when the US-Mexico-Canada Agreement comes up for review in July 2026.
