China Building Its Own ‘Panama Canal’ In Latin America – Is This The End Of US Dominance?

Brasilia/Lima: China has begun work on a massive project in Latin America that could permanently challenge United States dominance. Beijing is building its own ‘Panama Canal’ to move goods between the Pacific and Atlantic oceans, bypassing the existing Panama Canal. The project aims to reshape global shipping routes and directly affect US influence in the region.

China’s plan focusses on Peru and Brazil. It links a mega-port in Peru with a bi-oceanic railway in Brazil to connect the Atlantic and Pacific oceans. Horizon Advisory, a US think tank, warns that in addition to expand trade, China is using this infrastructure to strengthen geopolitical influence in the Western Hemisphere. The choice of Brazil is notable, as US tariffs imposed by President Donald Trump had strained relations with the country.

Chancay Port: China’s Latin America Hub

A deep-water mega-port in Chancay, Peru, serves as the central hub of China’s corridor. The port is designed to connect directly with Asia and handle super-large container ships. It became operational at the end of 2024 and is set up as a distribution centre on South America’s western coast. Modern logistics zones, reduced trans-shipment and fast loading systems with an aim to reduce dependence on the Panama Canal.

In Brazil, a proposed bi-oceanic railway will connect inland areas to the Atlantic coast. Coal, grains and manufactured goods can be transported efficiently and create an alternative route that competes with the Panama Canal in terms of cost and transit time.

US experts believe that a successful corridor could end America’s monopoly over regional maritime trade.

How The Project Challenges Panama Canal

Cargo from the Pacific can now be transported overland to the Atlantic, reducing delays and cutting the high costs traditionally associated with the Panama Canal. The Chinese corridor bypasses common bottlenecks, including congestion and droughts that have already limited the canal’s capacity.

Beyond efficiency, China’s funding, construction and operational presence gives Beijing potential control over regional supply chains. Latin American exporters may have to coordinate pricing and logistics according to China’s interests, directly challenging the influence of the United States and other Western powers.

Horizon Advisory warns that the corridor will serve both commercial and political purposes. A US State Department spokesperson told The Daily Caller that Washington encourages host countries to exercise sovereignty over critical infrastructure and avoid investment conditions that undermine local economies and labour.

Analysts say that in coming years, the corridor could reshape trade routes and create a new geopolitical arena in Latin America between China and the United States.