U.S. Wins Oversight of $1.3B Chinese Port in Peru—A Pacific Defense Coup

From the South China Sea to Latin America, the U.S. is battling China for control of strategic chokepoints. The Peruvian court ruling mandating Ositran oversight of the $1.3 billion Chancay port is more than a bureaucratic reshuffle—it’s a high-stakes defense maneuver. Inaugurated by Xi Jinping in 2024, the deep-water terminal could become a resupply node for Chinese naval operations, and Washington’s persistent lobbying has now proven that legal tools can shape the military balance in the Pacific.

On July 2, 2026, a Peruvian court delivered a landmark ruling that directly inserts regulatory oversight into the operations of the Chancay port, a $1.3 billion deep-water facility controlled by Chinese state-owned operator COSCO Shipping Ports. The decision annuls an earlier January 2026 lower-court order that had exempted the port from supervision by Ositran, Peru’s transport infrastructure regulator, and explicitly classifies Chancay as a public-use port despite its private ownership. For Washington, the outcome is an unambiguous diplomatic victory in its intensifying campaign to contain Beijing’s economic and strategic footprint across Latin America.

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The Peruvian court ruling mandating Ositran oversight of the $1.3 billion Chancay port is more than a bureaucratic reshuffle—it’s a high-stakes defense maneuver.

The Chancay port, inaugurated by President Xi Jinping in November 2024 during the APEC summit, was designed to become a major Pacific logistics hub, dramatically reducing container transit times between South America’s resource-rich west coast and Asian markets. COSCO’s 60% stake placed the terminal squarely inside China’s Belt and Road infrastructure playbook. However, the project quickly became a flashpoint in U.S.-China great-power competition. The Trump administration, and its successor, openly warned that the port’s lack of sovereign regulation could allow it to function as a dual-use asset—supporting Chinese naval and intelligence operations under commercial cover. The State Department’s Bureau of Western Hemisphere Affairs condensed that fear into a tweet last February: “Let this be a cautionary tale for the region and the world: cheap Chinese money costs sovereignty.”

The reversal also vindicates Ositran, which had argued that leaving Chancay outside its remit would strip port users of any institutional protection against discriminatory tariffs, safety lapses, or preferential treatment for COSCO’s own fleet. With the ruling, Ositran can now regulate, supervise, inspect, and penalize the operator under Peruvian law. In parallel, the U.S. has layered tangible security support onto its diplomatic pressure: Ambassador Bernie Navarro visited Chancay in June 2026 to donate two high-tech scanners for Peru’s customs agency, boosting surveillance capabilities and embedding American equipment at the facility.

From a trade perspective, the port’s oversight reset carries immediate implications. China is Peru’s largest trading partner, with bilateral exchange heavily weighted toward minerals, agricultural goods, and manufactured imports. Shippers and freight forwarders must now incorporate an additional layer of compliance and potential operational delays—or, conversely, gain greater predictability if Ositran enforces transparent tariff and scheduling standards. The ruling also offers a template for other nations in the region grappling with Chinese-funded infrastructure: it demonstrates that private ownership does not automatically preclude domestic regulatory authority, a precedent that could embolden states from Brazil to Panama to revisit similar lease agreements.