US Approves $1.5 Billion Deal to Expand Naval Base in Peru

The United States has approved a $1.5 billion defense deal to expand and modernize a major naval base in Peru, underscoring Washington’s efforts to strengthen its strategic footprint in Latin America amid growing Chinese influence in the region.

According to the US State Department, Peru formally requested the purchase of equipment and services worth $1.5 billion to upgrade its main naval base in Callao, located near Lima’s international airport. The project is aimed at enhancing operational capacity and long-term maritime security.

The department said that around 20 US government and private-sector personnel will be deployed to Peru for up to ten years as part of the implementation of the project.

In an official statement, Washington described the agreement as a step that “enhances the security of an important partner that serves as a driving force for political stability, peace, and economic progress in South America.”

The US maintains a long-standing security partnership with Peru, and Peruvian authorities have authorized the presence of US forces on their territory under existing bilateral arrangements.

The announcement comes against the backdrop of expanding Chinese investment in Peru. In 2024, Chinese President Xi Jinping inaugurated a $3.5 billion commercial port in the country, the first project of its kind financed and developed by Beijing in Latin America. While China funded the port, Peru is financing the expansion of the naval base independently.

The administration of US President Donald Trump has repeatedly stressed its determination to prevent rival powers from establishing a dominant presence in Latin America, a region Washington views as strategically vital to US interests.

Separately, the commercial port of Callao announced in 2024 a $400 million agreement with a UAE-based company to increase its capacity by 80%, further highlighting the port’s growing importance as a regional logistics and security hub.

The deal reflects intensifying geopolitical competition in South America, as the US and China expand their economic and strategic engagements across the continent.