‘Costs sovereignty’: Trump admin issues sharp rebuke to Peru over Chinese port ruling
Lima: The Trump administration issued a sharp rebuke to Peru on Wednesday, warning that the nation is compromising its sovereignty by allowing China to consolidate control over vital infrastructure following a court ruling that stripped local regulators of oversight at a massive new port.
The US State Department categorised the $1.3 billion deepwater project in Chancay as a "cautionary tale" for the globe. The warning followed a Jan. 29 judicial decision that blocked Peru’s infrastructure regulator, Ositran, from supervising or sanctioning the Chinese-built facility.
"We support Peru's sovereign right to oversee critical infrastructure in its own territory," the State Department's Bureau of Western Hemisphere Affairs said in a social media statement. "Let this be a cautionary tale for the region and the world: cheap Chinese money costs sovereignty."
A Port of Contention
Located north of Lima, the Chancay port is a cornerstone of Beijing's "Belt and Road" initiative. It is designed to host the world’s largest cargo vessels, significantly shortening trade routes between Asia and South America. While the port is privately owned, it occupies 180 hectares of Peruvian land.
China’s Foreign Ministry on Thursday dismissed the US allegations as "blatant rumour-mongering." Spokesperson Lin Jian stated that Beijing "firmly opposes and strongly deplores" the characterisation of the project, which it views as a flagship for international cooperation.
Regulatory Power Vacuum
The legal dispute centres on whether Cosco Shipping, the state-owned Chinese majority shareholder, should be exempt from the standards applied to other Peruvian ports.
- The Court Ruling: A lower court judge ordered authorities to stop exercising powers of "regulation, supervision, oversight and sanction" over the facility.
- The Regulator’s Stand: Ositran President Verónica Zambrano announced Wednesday that the agency would appeal, arguing that Cosco would become the "only company providing services to the public that could not be supervised."
Cosco Shipping defended the ruling to The Associated Press, insisting it "in no way involves aspects of sovereignty." The company maintained that it remains under the jurisdiction of Peruvian police, customs, and environmental officials.
Geopolitical Chessboard
The diplomatic friction coincides with a broader push by the Trump administration to counter Chinese influence in the Western Hemisphere. China has been Peru’s primary trading partner for over a decade, investing heavily in the nation's energy and mining sectors.
To bolster its own presence, the US is currently negotiating a $1.5 billion contract to build a new naval base for Peru just miles away from the Chancay site. Newly installed US Ambassador Bernie Navarro echoed the administration's hard line, writing on X: “Everything has a price. In the long term, what was cheap is costly.”
With inputs from AP