China is quietly building an economic empire by securing control over ports and shipping infrastructure worldwide, particularly in Latin America, long seen as a strategic domain of the United States. This growing influence threatens to reshape global trade, compromise American commercial interests and raise national security concerns in Washington.
China’s maritime strategy focuses on taking over key ports throughout South and Central America. Backed by the Belt and Road Initiative, Beijing has convinced more than 21 Latin American nations to sign on, gaining control over critical logistics hubs in exchange for investment and development. The crown jewel of this expansion is the Panama Canal, a crucial conduit for world commerce and a long-standing pillar of U.S. strategic interests.
China’s Motives: Trade, Resources and Power
Latin America offers Beijing more than just access to new markets. With over 700 million consumers, the region is a major destination for Chinese goods and investment. It also provides a steady flow of crucial raw materials—copper from Chile and Peru, lithium from Argentina and Bolivia, and oil from Venezuela. Chinese-owned ports across these countries serve as gateways for extracting and transporting these resources at scale and with minimal interruption.
However, China’s ambitions go far beyond trade. Control over ports grants Beijing strategic leverage: it can set port fees, shape customs protocols and influence shipping access. In times of geopolitical tension, these powers could be weaponized to disrupt trade, slow supply chains or monitor U.S. military logistics.
Competing Visions: Washington’s Response
The United States has not been idle. In 2021, then-President Joe Biden launched the Build Back Better World initiative with other G7 nations, aiming to counter the Belt and Road Initiative by funding infrastructure in developing countries, including Latin America. Despite the effort, Chinese influence continues to outpace American projects on the ground.
Trump-era policies also attempted to curb China’s regional sway, notably through aggressive trade measures and new sanctions. Yet many experts argue that the U.S. still lacks a coherent long-term strategy to challenge China’s dominance in global shipbuilding and maritime logistics.
A Maritime Disparity
The gap between U.S. and Chinese maritime capabilities is stark. China owns more than 5,500 ocean-going merchant ships; the United States owns only about 80. China’s shipbuilding output is 232 times greater than that of the United States. While China has invested in more than 129 ports globally, the U.S. maintains strategic control over only a few—many of which are partially or wholly operated by foreign firms.
This imbalance poses a strategic vulnerability. In any future conflict, the U.S. military would need to rely on foreign-flagged commercial vessels to transport more than 90% of its logistical needs—a risky prospect if Beijing can disrupt or influence these supply lines.
The Panama Canal: A Strategic Flashpoint
The Panama Canal, a vital chokepoint in global commerce, is increasingly at the center of Sino-American tension. Chinese firms such as Hutchison Ports, a subsidiary of Hong Kong’s CK Hutchison Holdings, have long-standing investments in the canal’s Pacific and Atlantic entrances. In late 2024, Chinese President Xi Jinping and Peruvian President Dina Boluarte inaugurated the Chancay deep-sea port in Peru—a $4 billion project largely financed and built by China’s state-owned shipping giant, COSCO.
Alarmed by China’s growing presence, U.S. officials have begun to act. In April 2025, Defense Secretary Pete Hegseth declared during a visit to Panama that the U.S. would “not allow communist China or any other power to compromise the canal’s operation or security.” Meanwhile, the U.S. firm BlackRock has led a coalition to purchase key port assets in Panama from CK Hutchison—a move fiercely opposed by Beijing.
Security Through Commerce
China’s growing presence is not limited to trade. The Chinese military has deepened ties with several South American countries, supplying riot control gear to Bolivia, transport vehicles to Guyana and Trinidad, and sending PLA naval ships on goodwill tours. Chinese troops have also participated in UN peacekeeping missions in the region, increasing their operational footprint.
This multifaceted strategy allows Beijing to expand its influence in economic, logistical, political and security spheres.
A Brewing Policy Clash
In April 2024, five major U.S. labor unions filed a petition urging the U.S. Trade Representative to investigate China’s monopolistic practices in maritime logistics. The USTR responded with a sweeping probe under Section 301 of the Trade Act, concluding that China’s policies place an undue burden on U.S. commerce. One proposed remedy: a $1.5 million tariff on every Chinese-built vessel docking at U.S. ports—a move designed to offset Beijing’s vast state subsidies.
However, analysts warn that such tariffs may backfire, driving up costs across global supply chains and hurting American businesses already struggling with inflation and trade instability.
The Future of American Influence
As China tightens its grip on Latin American ports, Washington faces a stark reality: it must invest in strategic port infrastructure, rebuild domestic shipbuilding capacity and present credible alternatives to the Belt and Road Initiative. Without a cohesive response, the United States risks ceding influence in a region it once considered its backyard—and in the critical shipping lanes that connect the world.
