The Chancay megaport aims to streamline trade between South America and Asia and marks a significant step in China's Belt and Road Initiative. It has raised alarm bells in Washington.

Chinese President Xi Jinping and Peruvian counterpart Dina Boluarte inaugurated a $1.3 billion port that could transform South American trade with Asia just as Beijing prepares for a potential trade war with the US.

Chinese President Xi Jinping will arrive in Lima on Thursday, kicking off a week-long diplomatic blitz in Latin America by inaugurating the massive Chancay deep-water port, one of Beijing's most ambitious infrastructure investments in Latin America.

The port opening in Chancay underscores China’s growing clout in a region that once looked primarily to the United States for economic opportunity.