Court Gives Peru Oversight of Chinese-Built Port in Geopolitical Battle

Peru port Chancay — COSCO developed the Chancay port in Peru which has become a new locus for the geopolitical fights (COSCO)

Against the backdrop of the geopolitical rivalry between China and the United States, a court in Peru reversed a previous decision and granted oversight of COSCO’s Chancay port to Peru’s regulators. The privately funded and built port has become a focus of the global rivalry, with U.S. officials warning Peru was ceding its sovereignty and risking the Western Hemisphere.

Much of the Trump administration’s public rhetoric has been directed at Chinese control of the Panama Canal, and indeed, Donald Trump returned yesterday, July 1, to the assertion that China seeks to control the Panama Canal. Speaking at the opening of a new museum dedicated to President Theodore Roosevelt, who built the Panama Canal, Trump declared again that the “United States will not let ‌China ?take over the Panama Canal.”

The administration has been facing the same battle at the Chancay port located approximately 50 miles north of Lima, Peru. COSCO built the port at a reported cost of $1.3 billion. Inaugurated in November 2024, the port began full commercial operations in June 2025 with a designed capacity of one million TEU annually.

On appeal by the state’s regulatory authority, Ositran, a court in Peru ruled yesterday that the state has an oversight authority because the port, while privately built and operated, is a public-use port. It said Ositran has the authority to regulate, supervise, inspect, and sanction operators under Peruvian law.

It overturned a lower court ruling which in January sided with COSCO. The Chinese company argued the port was privately funded and did not operate under a government concession. Ositran had been ordered to refrain from oversight of the port’s operations.

Peru has been under pressure from the United States since the port opened. American lawmakers argued Chancay has “dual useage” potential and that it could become a “direct military threat to the western hemisphere.” Chinese officials have pushed back on these accusations as they have with the Panama Canal assertions.

While Callao remains Peru’s dominant commercial port, Chancay is growing quickly. COSCO Shipping Ports Chancay reported in June that the port had handled over 500,000 TEU in its first year and a total of 2.4 million tonnes of cargo. Further, they asserted that it is growing quickly, reporting a 44 percent increase in the number of vessel calls in the first five months of 2026, versus the same period in 2025. Cargo volume, they reported, rose 74 percent in the same time frame.

China promotes the port as a key gateway to trade between Asia and Latin America. They point out that the transit time has been cut to 23 days westbound to Shanghai and 25 days on the return trip to Peru. They emphasize the growing export opportunities for Peru’s agro-industries.

The new decision is not final and can still be appealed in the courts. China has yet to respond to this development, but earlier this year was harshly critical of the courts in Panama when they invalidated CK Hutchison’s concession to operate the port terminals at each side of the Panama Canal. The Chinese government has said it will protect the commercial interests of Chinese businesses.