As Trade With China Hits $23B, Peru Faces U.S. Warning on Strategic Alliances

U.S. Defense Secretary Pete Hegseth confronted Peruvian leaders last week about China’s deepening foothold in Latin America during high-level meetings in Washington.

The talks with Foreign Minister Elmer Schialer and Defense Minister Walter Astudillo focused on Beijing’s $3.6 billion Chancay megaport project, which will grant China direct Pacific access when completed in late 2025.

Hegseth accused China of using infrastructure investments to dominate rather than collaborate, citing Beijing’s control of ports, energy grids, and 5G networks across the region as threats to hemispheric security.

China has poured $27.9 billion into Peru since 2000, with $23 billion in copper exports fueling its industrial machine last year alone. The Chancay port, built by state-owned COSCO, aims to slash shipping times to Asia by 20 days.

It is expected to generate $4.5 billion annually for Peru’s economy. Yet U.S. officials warn such projects deepen dependency, pointing to China’s 215 military visits to Latin America since 2002 and its expanding space infrastructure in Chile.

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“Beijing invests for military advantage, not mutual gain,” Hegseth stated, linking China’s resource extraction to its global arms buildup. Peru now balances between its top trading partner China and the U.S., which signed a free-trade pact with Lima in 2009.

U.S.-China Tensions Escalate in Latin America

The Trump administration has ramped up pressure, threatening action against Chinese-controlled assets near the Panama Canal and urging allies to reject Huawei’s telecom technology.

Washington proposes joint naval drills and cybersecurity partnerships as alternatives, framing the choice as sovereignty versus subordination.

Latin America’s $450 billion trade with China surpassed U.S. exchanges in 2024, with Beijing securing lithium supplies from Chile and Bolivia for battery production.

Seven nations still recognize Taiwan, but Honduras and Nicaragua recently switched allegiance to China, reflecting its diplomatic clout.

Analysts say Peru’s infrastructure needs-like roads linking Chancay to Brazil-leave it vulnerable to debt traps despite short-term gains. As U.S.-China tariffs hit $380 billion in 2024, Peru’s copper-rich position makes it a strategic battleground.

Hegseth’s warning underscores Washington’s resolve to counter Beijing’s Belt and Road Initiative through economic and military deterrence. It also tests Lima’s ability to navigate an escalating Cold War-style rivalry.