US, China clash over Peru’s Chancay megaport after court bars regulator oversight

The United States has issued a warning that Peru risks eroding its sovereignty after a court ruling limited state oversight of a Chinese-controlled megaport, prompting a sharp rebuke from Beijing and intensifying geopolitical tensions over a strategic hub on South America’s Pacific coast.The dispute centres on the Port of Chancay, a US$1.3 billion deep water facility located about 80 kilometres (50 miles) north of Lima and majority owned by China’s state-run shipping giant Cosco Shipping Ports.The port covers 180 hectares of Peruvian territory and has the capacity to handle up to one million containers a year.Since its inauguration in November 2024 during the Asia-Pacific Economic Cooperation summit hosted by Peru, it has reportedly reduced shipping times between China and Peru to around 23 days and cut logistics costs by more than 20 per cent, while handling more than 336,000 TEU in its first year of operations.In a message posted by the US State Department’s Bureau of Western Hemisphere Affairs, Washington wrote on X it was “concerned about latest reports that Peru could be powerless to oversee Chancay, one of its largest ports, which is under the jurisdiction of predatory Chinese owners”.“We support Peru’s sovereign right to oversee critical infrastructure in its own territory. Let this be a cautionary tale for the region and the world: cheap Chinese money costs sovereignty,” the post added.