The Trump administration delivered a stark warning Wednesday that China's influence in Peru threatens the nation's sovereignty, citing a court ruling limiting oversight of the $1.3 billion Chancay port. The State Department called the situation a "cautionary tale" about "cheap Chinese money costs sovereignty" amid growing US-China competition in Latin America.

A Peruvian court ruling prevents authorities from regulating the Chinese-built port, operated by majority shareholder Cosco Shipping. China's government strongly rejected the US claims, insisting the port remains "under the jurisdiction, sovereignty and control of Peruvian authorities." The local regulator plans to appeal the decision that exempts the port from standard oversight.

The Chancay port represents China's expanding footprint through the Belt and Road initiative, where it has become Peru's largest trading partner for over a decade. As Latin America's deepest port capable of berthing massive cargo ships between Asia and South America, it exemplifies China's strategy of leveraging infrastructure investments to build economic influence in the Western Hemisphere, drawing increasing scrutiny from Washington.