LIMA, Peru (AP) — A week ago, circumstances could have allowed U.S. President Joe Biden to make a confident entrance at the Asia-Pacific Economic Cooperation forum in Peru on Thursday, highlighting strong commitments to foster collaboration with enthusiastic Latin American nations. However, that optimistic prospect has evaporated.
Once again, as witnessed in 2016 during the last APEC meeting in Lima, Donald Trump’s electoral victory has disrupted the dynamics of a high-stakes summit, leaving a lame-duck Democrat to navigate the ensuing challenges amidst the gathering of more than a dozen world leaders.
The renewed expectation of Trump’s “America First” doctrine poses significant obstacles to Biden’s ambitions of enhancing the United States’ standing during his inaugural presidential visit to South America. Experts indicate that this development may allow China and its leader, Xi Jinping, to dominate the spotlight in a region traditionally recognized as America’s sphere of influence.
President Xi will kick off his visit to Peru by inaugurating the ambitious $1.3 billion Chancay megaport, a pivotal project that will starkly showcase China’s expanding regional footprint. The total investment in this initiative is projected to surpass $3.5 billion over the next decade, solidifying China’s strategic interests in the area.
“This isn’t the way the U.S. had hoped to participate in the summit,” remarked Margaret Myers, director of the China and Latin America program at the Inter-American Dialogue, a renowned Washington-based policy think tank. “All eyes are going to be on the port, what Xi says about it and how he articulates relations across the Pacific.”
With the U.S. seemingly poised to retreat into isolationism under a potential new Trump administration, “China will increasingly be viewed as the viable alternative,” Myers also explained.
The Chancay megaport, located 60 kilometers (37 miles) northeast of Lima, represents a significant shift in Latin America’s geopolitical orientation. Once a tranquil fishing village, Chancay is now a focal point for modern trade, with the Chinese shipping and logistics behemoth, Cosco, holding a 60% equity stake in this significant development project, executed in partnership with the Peruvian firm, Volcan.
“With this port, we’re looking at the entire Pacific coast, from the United States and Canada all the way to Chile,” stated Peruvian Foreign Minister Elmer Schialer, expressing confidence in the transformative effects the port will have on regional trade dynamics during an interview with The Associated Press. “The shipping business is being transformed.”
Peruvian Economy Minister José Arista emphasized the port’s potential during a visit to China, sharing that neighboring countries like Brazil, Colombia, and Chile are making regular trips to reassess how they can adapt their supply chains to leverage this new port, which will reduce shipping times to Beijing by an impressive ten days.
China’s trade engagement with Latin America witnessed a remarkable 35-fold increase from 2000 to 2022, amassing nearly $500 billion, as reported by the Economic Commission for Latin America and the Caribbean. A vast majority of the region’s exports stemmed from South America, heavily reliant on five primary products: soybeans, copper, iron ore, oil, and copper cathodes.
China’s diplomatic influence in the region has also intensified, highlighted by Xi’s visits to 11 Latin American nations since he assumed the presidency, as reported by Xinhua, the main state news agency. In a notable diplomatic move, Brazil, which is set to host the G20 summit, and Peru are granting Xi a rare state visit this month, a privilege not extended to President Biden.
The misguided perception that Latin America faces the dilemma of choosing between its two largest trading partners is viewed as a “strategic defeat” for the U.S., articulated Eric Farnsworth, vice president at the Washington-based Council of the Americas. “The idea that China is somehow a better partner is increasingly resonating in the region, and I think Xi aims to reinforce and amplify that perception,” Farnsworth asserted.
While no substantial influx of loans through the Belt and Road Initiative is anticipated, given China’s past investments led to unmanageable debt for several developing nations, experts suggest that cooperation in other infrastructure areas, particularly renewable energy and telecommunications, remains a possibility.
The U.S. has been proactive in urging Latin American governments to dismiss investments in telecommunications, particularly opposing Chinese tech giant Huawei, citing potential risks of espionage. U.S. officials have similarly voiced concerns regarding the Chancay port’s possible military dual-use by Beijing’s navy in the Pacific, a claim vehemently rejected by Chinese officials.
China “is working to exploit insecurity in our hemisphere,” stated U.S. Defense Secretary Lloyd Austin during a recent address at Southern Command’s headquarters in Florida, accentuating that the Asian powerhouse is capitalizing on the region’s investment needs to further its perceived “malign agenda.”
Despite expressing apprehension regarding China’s expanding influence, the U.S. has yet to demonstrate the capacity or willingness to finance infrastructure projects comparable to the Chancay megaport, according to experts.
Even when the U.S. has sought to ensure competitive bidding for major public works initiatives in Latin America, American firms have often opted out of participation, as noted by Benjamin Gedan, director of the Wilson Center’s Latin America Program. A Kamala Harris administration would not have shifted this trajectory, though a Democratic victory would have empowered Biden to address U.S. collaboration prospects during discussions in Lima, including building regional supply chains.
In stark opposition to Biden’s emphasis on coalitional diplomacy, Trump has pledged to prioritize American interests, signaling a return to the unilateralist strategies that characterized his previous tenure, which involved aggressive stances against foreign competitors and exacerbating the U.S.-China trade war.
In 2022, Biden introduced the Indo-Pacific Economic Framework aimed at integrating regional economies and providing a counterbalance to China’s rising influence. However, on the campaign trail last year, Trump indicated his intention to dismantle this trade agreement if he regained the presidency in 2024, mirroring his abrupt withdrawal from the Trans-Pacific Partnership in 2017 upon taking office.
Over the intervening years, U.S. influence in South America has waned while China’s footprint has expanded, according to Farnsworth, who recalled how Trump’s unexpected victory during the last APEC meeting in Lima in 2016 sapped the energy from then-President Barack Obama’s delegation.
Peru’s top diplomat remains optimistic that the U.S. continues to hold a commanding voice in guiding discussions surrounding trade at venues like APEC. Schialer expressed skepticism that Trump would abandon multilateral engagements, noting, “He understands that the U.S. is crucial to the world. We must engage in dialogue to collaboratively address these challenges.”
However, following Trump’s election victory and the inauguration of the Chancay port in Peru, analysts are bracing for heightened competition between the U.S. and China to eclipse the APEC proceedings this week. “The Chinese revel in the prospect of outpacing the U.S. in its own backyard,” Gedan remarked. “Xi will thrive in this environment, arriving with a significant delegation to unveil this transformative port, effectively overshadowing an American leader who finds himself politically weakened. This moment holds substantial significance for China.”
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How might the development of the Chancay megaport influence trade relationships between Latin America and China in the coming years?
**Interview with Margaret Myers, Director of the China and Latin America Program at the Inter-American Dialogue**
**Interviewer:** Thank you for joining us today, Margaret. With President Biden gearing up for his inaugural visit to South America during the APEC summit in Peru, how has the political climate shifted, especially following the renewed attention on Donald Trump’s potential return to the presidency?
**Margaret Myers:** Thank you for having me. The political landscape has indeed shifted dramatically in just a week. Initially, there were hopes that Biden could leverage this summit to strengthen ties with Latin American nations and reinforce U.S. influence in the region. However, the looming shadow of Trump’s “America First” doctrine complicates matters significantly, as it raises questions about the U.S.’s long-term commitment to Latin America.
**Interviewer:** Can you elaborate on the significance of the Chancay megaport and its implications for U.S.-China relations in the region?
**Margaret Myers:** The Chancay megaport is a critical marker of China’s expanding influence in Latin America. As Xi Jinping inaugurates this $1.3 billion project in Peru, it not only showcases China’s commitment to investing in infrastructure but also positions it as a primary player in regional trade dynamics. This port dramatically enhances shipping routes and times, giving neighboring countries a compelling reason to engage with China more closely, potentially at the expense of U.S. interests.
**Interviewer:** You mentioned that Latin America might view China as a viable alternative. What does this mean for the U.S. strategy in the region?
**Margaret Myers:** It’s a strategic defeat for the U.S. if Latin American countries increasingly perceive China as a better partner. The notion that they have to choose between two large trading partners complicates U.S. engagement efforts. If Trump were to return, his administration may push for an isolationist approach, further alienating these nations, which may turn to China for economic partnerships instead.
**Interviewer:** In light of these developments, how should the Biden administration recalibrate its approach towards Latin America?
**Margaret Myers:** The Biden administration needs to actively demonstrate its commitment to Latin America beyond rhetoric. Investments in infrastructure, renewable energy, and technology that resonate with the needs of these countries will be crucial. Moreover, the U.S. must engage in robust diplomacy to counter China’s narrative, particularly fostering trade and investment agreements that can compete with initiatives like the Belt and Road.
**Interviewer:** Lastly, how do you see the U.S.-China dynamic evolving in the context of Latin America in the next few years?
**Margaret Myers:** I anticipate a complicated and competitive dynamic. As long as the U.S. struggles to present a united front and articulate a clear strategy that involves meaningful partnerships, China will continue gaining traction. Countries in Latin America will seek out the best deals, and if the U.S. cannot meet these demands, we might see a shift in allegiance towards Chinese investments and influence.
**Interviewer:** Thank you for your insights, Margaret. It’s clear that the upcoming APEC summit will have far-reaching implications for U.S.-Latin America relations.
**Margaret Myers:** Thank you for having me. It’s certainly a pivotal moment, and we’ll be watching closely to see how these dynamics unfold.
