A Lima court has just done what Washington has spent months demanding: it put China's flagship South American port back under state oversight. On July 1, the Second Constitutional Chamber of the Superior Court of Lima overturned a January ruling that had stripped Ositrán, Peru's transport infrastructure regulator, of its power to inspect and sanction the $1.3bn Megaport of Chancay. For a facility built to be China's main gateway into South America, this is a serious reversal.

The ruling landed days after a separate court blocked a parallel attempt by the port's operator, Chinese state-controlled Cosco Shipping, to halt an antitrust probe by Indecopi, Peru's competition authority. Together, the two rulings end Cosco's brief run of regulatory immunity. The court's reasoning was blunt: Chancay is a public-use facility, regardless of the private ownership structure behind it.

The regulators are back

Cosco has lost its shield. For months, the terminal sat in a regulatory grey zone after the January ruling ordered Ositrán to stay away, effectively creating a private enclave on the Pacific coast. Cosco argued that a fully privately financed port, built without a state concession contract, fell outside standard public oversight law. It wanted routine disputes handled through commercial channels, not state mandates.

The appellate judges rejected that argument outright. Routine information requests and baseline administrative checks, they found, do not amount to an "imminent threat" to a private company's constitutional rights. That closes a loophole Cosco had used to play one regulator off against another. Now it faces both Ositrán and Indecopi at once, with no immunity from either.

Cosco is not done, though. Its lawyer, Ramiro Portocarrero, has confirmed the company will escalate the matter to Peru's Constitutional Tribunal through a Constitutional Grievance Recourse, arguing the state promised legal stability for a $1.3bn investment and then changed the rules mid-operation.

Peru follows Panama's script

Washington has run this play before, just five months earlier and one country north. In late January and February, the Trump administration pushed Panama's Supreme Court to nullify long-standing concessions at the ports of Balboa and Cristóbal, sitting at the Pacific and Atlantic mouths of the Panama Canal. A subsidiary of the Hong Kong-based conglomerate CK Hutchison had held those terminals for decades.

Secretary of State Marco Rubio led the public pressure, arguing Chinese port control was unacceptable on strategic grounds. The dispute peaked on February 23, when Panama's government seized the terminals by executive decree and handed interim control to Western-allied shipping lines, prompting a multi-billion-dollar arbitration claim from Beijing.

Chancay is the sequel. Washington treats Chinese control of Latin American port infrastructure as a systemic risk to Western supply chains. The method is identical to the one used in Panama: lean on domestic courts to enforce local law, reassert host-country sovereignty, and strip the legal protections shielding Chinese state-linked capital.

Washington times its message to the ballot box

The US State Department set the tone early. Its Bureau of Western Hemisphere Affairs warned publicly that "cheap Chinese money costs sovereignty". US Ambassador Bernie Navarro reinforced the point in person, delivering US-donated cargo scanners directly to Chancay's customs checkpoint, establishing a physical, symbolic American presence inside China's main South American gateway.

The timing of the ruling is political as much as it is judicial. Following Peru's June 7 elections, Navarro and Rubio moved quickly to congratulate conservative candidate Keiko Fujimori on her presidential win. They framed US engagement as a defence of transparent institutions against Chinese state firms dodging local rules. Beijing pushed back hard, with foreign ministry spokesperson Lin Jian dismissing the American statements as defamation.

None of this is coincidental. It traces a direct line back to Washington's national security establishment. Fujimori's campaign advisor in the run-up to the vote was Carlos Díaz-Rosillo, who during the first Trump administration served as White House director of policy and interagency coordination and later as the Pentagon's acting principal deputy assistant secretary of defense for international security affairs, a brief that explicitly covered defence policy for the Western Hemisphere. His move from drafting Washington's regional security doctrine to endorsing Fujimori across major Peruvian media outlets shows how tightly US security interests and Peruvian electoral politics have become intertwined. Navarro mirrored that posture on the ground: his highly visible role during the election cycle drew local criticism for pushing the boundaries of diplomatic neutrality.

Pulling Peru back from Beijing

Since Trump assumed office, Washington's focus on Peru has intensified dramatically, driven by alarm over how deeply intertwined Lima has become with Beijing. China is Peru's uncontested top trading partner, absorbing nearly 30% of Peruvian exports worth over $22bn a year, the vast majority of it copper and other minerals. Chancay was supposed to be the crown jewel cementing that architecture.

To break the alignment, the White House has deployed an aggressive, multi-layered counter-offensive. In January 2026, the Trump administration designated Peru a "Major Non-Nato Ally" (MNNA), a rare status that unlocks privileged access to US military hardware, joint defence research, and security programmes.

Washington backed that diplomatic upgrade with hard cash. The US State Department pushed through an estimated $3.42bn deal to sell F-16 fighter jets to the Peruvian Air Force, a sum roughly equivalent to Peru's entire annual defence budget, to anchor Lima's long-term military reliance on the West. The deal triggered fierce local political gridlock and internal ministerial clashes over funding timelines in April, but Peru ultimately secured its first payments to keep the purchase alive.

Simultaneously, to neutralise China's commercial maritime leverage at Chancay, Washington has shifted focus just north to Callao. The US has cleared equipment packages to modernise the naval base there and is pushing a deal for the US Army Corps of Engineers to build a brand-new main naval headquarters at Callao. Elite military access, fighter jets, and naval infrastructure: Washington is building a military firewall where it lost the economic argument.

A domestic corruption trail

While the geopolitics dominate the headlines, Peru's own state auditor has uncovered something arguably more damaging at home. An audit by the Comptroller General (Contraloría) found that officials at the National Port Authority and the Ministry of Transport and Communications possessed blueprints as early as 2021 showing the port's access tunnel was being built along an unapproved route, yet sat on that information for years while construction continued. The Contraloría has since referred several officials for criminal prosecution.

The bigger blow is a civil liability claim tied to ProInversión, the state investment agency. Auditors found officials fast-tracked a general sales tax (IGV) early-recovery scheme worth PEN527.8mn to Cosco representatives who allegedly lacked the legal authority to sign the contract. That sum, roughly $154mn, is more than a tenth of the port's entire $1.3bn construction cost.

The Contraloría has recommended the case go to Peru's Public Prosecutor's Office for Corruption Offences, naming Cosco itself as civilly responsible. Combined with a prior environmental fine and a failed beach-erosion system, the pattern points to a state regulatory system that repeatedly looked away.

The sovereignty play nobody quite believes

Peru's Constitutional Tribunal will have the final word, and Chancay's regulatory status stays provisional until it rules. Officially, this is a story about sovereignty restored: a turbulent Andean state standing up to a Chinese state giant, backed by a superpower patron cheering from the sidelines.

Read the fine print and the story gets murkier. The same officials now empowered to police Cosco are drawn from the same ministries that sat on tunnel blueprints for years and fast-tracked a $154mn tax break to representatives who, on paper, had no authority to ask for it. Sovereignty, in this telling, was for sale well before Washington decided it needed defending.

Cosco knows the routine. It has watched CK Hutchison run the same play in Panama: fight in the courts, absorb the political theatre, wait for the news cycle to move on. An appeal to the Constitutional Tribunal buys time, and time is the one resource a $1.3bn sunk investment can still spend freely.

What is being restored at Chancay is not so much sovereignty as leverage, and it now sits with whichever government official Cosco, Ositrán or Washington decides to call next. Peru did not choose sides in the US-China contest so much as it discovered, again, that its ports are worth more as chips than as ports.