U.S. signs off on $1.5 billion deal to expand Peru’s naval base

The State Department this week approved a deal worth $1.5 billion for equipment and services needed to expand Peru’s main naval base, which is 40 miles from a Chinese-built megaport.

The Peruvian government’s plans to expand the Callao base have been in effect since at least late 2024. 

“The proposed sale will improve Peru’s port infrastructure to accommodate current and future naval and logistical operations and requirements,” the Defense Security Cooperation Agency said in a statement. “The sale will also provide a safer, more efficient platform for naval operations by reducing civilian-military interactions at the existing facility.”

Thursday’s announcement of the expansion deal comes a year after the opening of the Port of Chancay, a Chinese-built deep-water facility north of Lima. It was developed as part of China’s Belt and Road Initiative and intended to become South America’s primary trade route with Asia. 

President Trump has expanded the Monroe Doctrine, traditionally warning against European colonization of the Americas, to assert U.S. dominance over the Western Hemisphere by countering the influence of China and Russia. The administration’s 2025 National Security Strategy prioritizes the region as part of its America First foreign policy.

“There will be no adverse impact on U.S. defense readiness as a result of this proposed sale,” the State Department said of Callao Naval Base.

The sale to Peru will include engineering studies and services, project management, technical support, infrastructure assessments and acquisition support.

“The proposed sale will contribute to the foreign policy objectives of the United States by helping the security of an important partner, which is a force for political stability, peace and economic progress in South  America,” the State Department said. “The proposed sale of this construction and support will not alter the regional military balance in the region.”

The State Department said at least 20 government employees or contractors will be based in Peru for at least a decade to provide construction management and oversight for the project. It’s expected to enhance Peru’s port infrastructure to meet naval and logistics requirements.