China dangerously close to circumventing the Panama Canal, report finds

China is aggressively expanding its Latin American influence operation by taking on major megaprojects aimed at circumventing the Panama Canal, a Horizon Advisory report revealed Tuesday.

China has been courting Brazil and Peru in order to build a series of massive infrastructure projects aimed at circumventing the Panama Canal amid the Trump administration’s extensive mission against Chinese influence in the vital shipping lane, the report revealed. Specifically, China has made inroads with Peru and Brazil to channel large investments in a vital port in Peru that would combine with a massive railroad through Brazil to open the door for China to the Atlantic Ocean.

“We’re catching up to the threat,” Nate Picarsic, senior fellow at the Foundation for the Defense of Democracies and Horizon Advisory co-founder, told the Daily Caller News Foundation. “We’re 20-some years behind China having its fingers into the Panama Canal, and as we belatedly get to catching up and competing there, they’re launching these massive new projects in Peru. They’re going to allow them to circumvent the Panama Canal.”

The Chancay Port came online in November 2024 after China made massive investments with Peru in order to promote its Belt and Road Initiative (BRI), a global infrastructure initiative critics have described as a debt trap and key influence arm for Beijing. He Bo, a local leader of the state-owned COSCO Shipping Ports Peru Chancay, said in August 2025 that “the growth in transportation demand is faster than we expected.”

“The problem is that access to the Chinese market comes at the cost of both market and operational dependence on Beijing,” the report reads. “China frames the effort as a ‘win-win’ opportunity, but Beijing’s real goal is to ensure that Peru’s economy, and the larger regional economy, rely on China.”

The proposed Bi-Oceanic rail line, which would stretch 3,000 miles through Brazil, aims to connect the port with the Atlantic Ocean. The project’s theoretical transit times for Brazilian goods could potentially outpace the Panama Canal, allowing China to further dominate the large South American nation.

Picarsic stressed the importance of curtailing China’s rapid Latin American expansion, while also commending the Trump administration for giving renewed attention to America’s southern backyard.

“I think it’s a very welcome development to focus on hemispheric security,” Picarsic told the DCNF. and obviously the devil’s in the details and how we execute and follow through on many strategic directions, what really matters, but I think [we’re] going in a direction where we want to solidify our foundation in our hemisphere, guarantee security and the chance for peace and prosperity of our neighborhood.”

The report ends by urging the U.S. not to simply compete with China on a business front, but to take on “China’s military-civil fusion apparatus” that has enabled the projects.

The Chinese Embassy and the State Department did not immediately respond to the Daily Caller News Foundation’s request for comment.

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