Chinese Cable Project Hands Chile’s Kast His First Crisis

The Sanctions

Secretary of State Marco Rubio’s department announced Friday that it had revoked the visas of Chile’s Transport Minister Juan Carlos Muñoz, Telecommunications Undersecretary Claudio Araya, and Araya’s chief of staff. The charge: deliberately compromising critical telecommunications infrastructure and subverting regional security. The outgoing Boric government called the accusation “absolutely false.”

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The trigger is the Chile-China Express, a proposed submarine fiber-optic cable from Valparaíso to Hong Kong backed by China Mobile, HMN Technologies, and Hengtong Optic-Electric — the company that bought out Huawei’s stake. The estimated investment is $500 million. More than 95 percent of global data traffic travels through submarine cables, making them infrastructure Washington has increasingly treated as a national security concern.

Escalation on Both Sides

U.S. Ambassador Brandon Judd defended the move Monday, saying he had warned multiple Chilean ministers before the sanctions landed. He called it “laughable” that the Boric government claimed surprise. More ominously, Judd warned the cable project “could force a review of all spectrums of information exchange we have with Chile, including programs that provide real benefits and security to the Chilean people.”

China’s embassy accused Washington of “obvious contempt for the sovereignty, dignity, and national interests of Chile.” Chile’s ambassador to Washington, Juan Gabriel Valdés, acknowledged the Biden administration had also raised concerns about the cable but said it “did not use these methods of threat.”

The Message Is for Kast

Two former Chilean foreign ministers read the sanctions as aimed at the successor, not the outgoing president. Ignacio Walker, who served under Ricardo Lagos, called the move “a warning to incoming president José Antonio Kast.” Heraldo Muñoz, former chancellor under Michelle Bachelet, said Washington sanctioned Boric because the political cost was lower — he leaves in days — but the message sticks. Asked directly, Ambassador Judd denied the signal was intended for Kast.

The cable project has been in development for years. In August 2025, China Mobile’s UK subsidiary registered CMI Chile SpA in Santiago, its corporate purpose explicitly including submarine cable landing services. The project runs parallel to the Humboldt cable connecting Chile to Australia through Google — a separate initiative that originally included Chinese firms before they were removed under U.S. pressure.

Kast’s Impossible Equation

The conservative president-elect, traveling to a summit in Miami on March 7 alongside his designated foreign minister Francisco Pérez Mackenna, inherits a diplomatic minefield before taking office. China is Chile’s largest trading partner; the United States is its largest foreign investor. Approving the cable risks an intelligence-sharing freeze with Washington; killing it risks alienating Beijing and abandoning infrastructure Chile’s own officials described as reducing total digital dependence on U.S.-routed networks. Pérez Mackenna responded to the sanctions by saying he needed “absolutely all background information” before commenting — and that Chile’s foreign policy “must always defend Chile’s interests.” A careful non-answer to a question that will not stay unanswered for long.

For more context, read Brazil’s Morning Call and the USD/BRL exchange rate report.

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