China has vowed to use its new container port in Chancay, Peru to boost trade with South American countries – and create an alternative channel to ship its products to the United States. 

In 2019, the state-owned Cosco Shipping Ports acquired 60% of the Chancay port from a Peruvian polymetallic miner for US$225 million. It then invested US$3.5 billion to upgrade the port. Xinhua said the first phase of the port project shortens the shipping time between Peru and China from 35 to 23 days, saving more than 20% in logistics costs.

Chinese President Xi Jinping inaugurated the Chancay megaport via an online ceremony in Peru on November 14. Since then, Chinese media and commentators have been promoting this facility's expected role in helping China increase trade and implement its Belt and Road Initiative. Of particular interest to US trade warriors, the pundits claim that Chinese exporters can use the Chancay port's nearby industrial parks as a "bathing base" to relabel or repackage their goods and ship them to the US.

How that will work out remains to be seen. Mauricio Claver-Carone, an adviser to US President-elect Donald Trump's transition team, has said that the 60% tariffs that Trump has vowed to impose on Chinese goods would also apply to goods that pass through the new Chancay deep-water port from any country.

"Any product going through Chancay or any Chinese-owned or controlled port in the region should be subject to 60% tariff, as if the product was from China," Bloomberg quoted Claver-Carone as saying in a phone interview.

He added that the duty would help the US guard against transshipment, a process through which Chinese goods enter a third country and then get re-exported to the US at lower tariff rates than direct shipments. 

He said transshipment in Latin American countries, such as Mexico, has been a key concern to the US for some time.

Follows 'bathing bases' in Vietnam, Mexico

Indeed, some Chinese commentators note that this is by no means the first time China has set up "bathing bases" overseas for the transshipment of its products.