LIMA, Peru (AP) — The Trump administration expressed concern Wednesday that China is undermining Peruvian sovereignty as it consolidates control of the South American nation’s critical infrastructure, a blunt warning after a Peruvian court ruled to limit local regulators’ oversight of a massive Chinese-built port.
The $1.3 billion deep-water port of Chancay, located north of Peru’s capital Lima, has become a symbol of China’s foothold in Latin America and a lightning rod for easing tensions with Washington.
The U.S. State Department’s Bureau of Western Hemisphere Affairs said on social media it was concerned about “reports that Peru may not be able to police the port of Chancay, one of its largest ports, which is governed by predatory Chinese shipowners.”
It added: “We support Peru’s sovereignty to oversee critical infrastructure on its territory. Let this serve as a warning to the region and the world that cheap Chinese money undermines sovereignty.”
The concerns come as the Trump administration seeks to assert dominance in the Western Hemisphere, where China has long established influence through heavy loans and high trade volumes.
The Chinese government strongly rejected the U.S. comments on Thursday.
“China firmly opposes and expresses strong dissatisfaction with the U.S.’s blatant spreading of rumors to smear Hong Kong,” Foreign Ministry spokesman Lin Jian said at a daily press conference in Beijing.
Chancai, located on the Pacific coast, is part of Beijing’s Belt and Road Initiative, an infrastructure program in which Chinese state-owned banks have provided massive loans or financial guarantees to build projects such as seaports, airports and highways across multiple continents.
As Latin America’s deepest port, Chancay is able to berth some of the world’s largest cargo ships sailing between Asia and South America. China has been Peru’s largest trading partner for more than a decade.
The port’s majority shareholder, Chinese state-owned shipping and logistics company Cosco, dismissed the U.S. accusations.
In response to questions from The Associated Press, the company said the court’s ruling “in no way addresses sovereignty aspects” and insisted that the port remains “under the jurisdiction, sovereignty and control of the Peruvian authorities and complies with all Peruvian regulations.”
It added that a number of Peruvian authorities were monitoring activities at the port, including police forces, environmental regulators and customs officials.
A ruling issued by a lower court judge on January 29 ordered Peruvian authorities not to exercise “regulatory, supervisory, supervisory and sanctioning powers” over the port of Chancay.
Regulator Ositran, which oversees all the country’s other major ports, said it would appeal the decision, arguing there was no reason to exempt Cosco from regulation.
“(COSCO Shipping) will be the only company that provides services to the public without being regulated,” Ositran President Verónica Zambrano told a local radio station on Wednesday.
Zambrano added that while the Port of Chancay is privately owned, it covers 180 hectares (about 445 acres) of Peruvian territory and therefore requires government efforts to monitor and enforce compliance with local user protection standards.