In South America, Trump already losing a trade battle with China

Peru's growing ties with China challenge U.S. influence in South America, highlighting a shifting power dynamic in the region.

In South American copper giant Peru, the incoming Donald Trump administration in the U.S. will find itself already on the losing side in a trade battle with China, part of a bigger power realignment around the resource-rich region in Washington’s backyard.

Peru, the world’s second largest copper exporter, is set to host Asia-Pacific Economic Cooperation leaders this week, with China’s President Xi Jinping expected to attend and inaugurate a major new Chinese-built port in the country. Outgoing U.S. President Joe Biden is also on the guest list.

Peru reflects a wider challenge for the White House around South America, where China’s presence has grown rapidly given its huge appetite for the region’s main exports: corn, copper, soy, beef, and battery-metal lithium.

That has made Beijing the go-to trade partner from Brazil to Chile and Argentina, eroding Washington’s regional political clout, a trend that widened under Mr. Trump’s ‘America First’ inward turn during his first administration and again under Mr. Biden.

“The strategic value is that this is the U.S.’s backyard,” said Li Xing, professor at the Guangdong Institute for International Strategies, adding it helped counter U.S. presence around the Indo-Pacific and offset trade war risks.

“China cannot start by building military bases there because it is too sensitive and will make China’s conflict with the United States too pronounced... So it has made inroads with economic ties first.”

Peru demonstrates the dramatic shift. China’s trade lead there over the United States widened to $16.3 billion last year, UN Comtrade data show, a stark reversal of just a decade ago when Washington was the dominant player.