When Washington forced Dubai Ports World to divest its American port operations in March 2006, it triggered a geopolitical disaster. Dubai Ports World had bought Peninsular & Oriental for $6.8 billion, a deal approved by the U.S. Committee on Foreign Investment in the United States. However, the Senate gave in to political theater. Senators Chuck Schumer (D-NY) and Chris Dodd (D-CT) characterized the Emirati operator at a U.S. port as a “national security breach.” Dubai Ports World eventually transferred its leases and walked away. Beijing took advantage of the company’s humiliation.
Dubai Ports World controls the strategic South American choke points the United States has been unwilling to protect.
Today, Dubai Ports World controls the strategic South American choke points the United States has been unwilling to protect. On August 13, 2026, the company, marking its twentieth year in Peru, submitted its proposal for Addendum No. 4, which seeks to extend its port concession from 2036 to 2066. This new agreement outlines a $1.47 billion investment package to expand Peru’s Callao South Terminal capacity from 2.7 to 4.3 million Twenty-Foot Equivalent Units, the standard unit for shipping capacity. Indeed, Callao’s South Terminal processes around 60 percent of Peru’s containerized cargo. Moreover, between January and May 2026, this single quay accounted for 48 percent of Peru’s exports and 61 percent of its imports. The new project will build upon the company’s $1 billion footprint in the port, which recently culminated in the $400 million Bicentennial Pier expansion.
Meanwhile, COSCO Shipping Ports represents China’s rival bet. The Chinese state carrier owns 60 percent of the nearby Chancay megaport. Chinese President Xi Jinping and former Peruvian President Dina Boluarte inaugurated the complex on November 14, 2024, after China Harbour Engineering built it. Five Chinese state banks financed the company’s project with $975 million, and Lima rewrote national statutes to grant COSCO exclusive use. Although Chancay’s phase one cost around $1.3 billion and was originally planned within a $3.6 billion master design to deliver 1.5 million Twenty-Foot Equivalent Units, Callao already surpasses that capacity. The main distinction is operational: While Dubai buys off commercial privileges by tapping into the efficiencies of the marketplace, Beijing buys its way to influence by purchasing infrastructure, distorting local laws, and engaging in political farce.
Historically, Spain recognized the ports were more important, in many cases, than the capitals. On May 2, 1866, Spanish Naval Officer Casto Méndez Núñez bombarded the Peruvian port of Callao. The republic depended upon the revenues from the guano, and so the customs pier became the lynchpin to the treasury. Chilean President Domingo Santa María later pursued the same strategy in Chile’s 1879–84 War of the Pacific against a Peru-Bolivia alliance, prioritizing the coast rather than the capital. In both cases, Núñez and Santa María understood the quay shapes the Treasury before the Treasury could support the state.
Today, Washington must remedy its historic myopia and declare its support for the Emirati quay. The United Arab Emirates signed the Abraham Accords on September 15, 2020, and hosts critical U.S. airpower at Al Dhafra. In contrast, COSCO answers to a hostile state, its state builders, and a predatory banking syndicate. Evicting Dubai for the second time would leave the Pacific growth to a communist adversary.
Evicting Dubai for the second time would leave the Pacific growth to a communist adversary.
While the Abraham Accords successfully cover Middle Eastern trade and defense, they lack a Latin American theater. Callao provides that missing annex. The White House should execute an Abraham Accords “Callao Annex” before Lima signs Addendum No. 4. This should include the Emirati concession as a host for an Israeli coastal intelligence picket: Elta radar, a fused identification picture, and Rafael access control at Callao and Paita, with Southern Command as the primary customer. Under this framework, Dubai finances the infrastructure, Israel owns the surveillance picture, and Peru signs on as an ally under the leadership of Peruvian President Keiko Fujimori. The emerging “Abrahamic Security Alliance” on the Pacific coast could blind COSCO’s sensor layers.
Finally, Congress should include this annex in any renewed Peru trade preferences agreement. The text should withhold Development Finance Corporation cover for the $1.47 billion package unless the measure forbids Chinese terminal software, exclusive-use clones, and COSCO equity at Callao, while also reserving a crisis berth for American and Israeli navies.
Grapes, avocados, and pomegranates already traverse Dubai’s pier. The Trump administration should staple an allied radar picture to that cargo, leaving Chancay an isolated Chinese outpost with no claim on the coast or the port feeding the capital.
