Peru, China: Game of Chancay

Also: Argentina, the US, Iran, Israel, Palestine, and Sri Lanka.

Painted panel, Chancay culture, Peru, c1000-1476, paint on cotton, Art Institute of Chicago, Illinois.

In today’s dispatch, we examine China's new port north of Lima and how it fits into Beijing's plans for South America. Meanwhile, the US and its allies aren't sitting still, with a meeting between Donald Trump and Javier Milei in Florida. Elsewhere, more signs of a deal with Iran emerge, Israel's settlers face a backlash, and Sri Lanka overwhelmingly elects a new socialist government.

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Michael Feller, Chief Strategist

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PERU. CHINA. Game of Chancay

Xi’s new port is only a bridgehead.

Xi Jinping and his Peruvian counterpart, Dina Boluarte, inaugurated Thursday the port of Chancay, 80 kilometres north of Lima. An adviser to Lula da Silva said Brazil would not join China's Belt and Road initiative but examine "synergies".

INTELLIGENCE. Chancay, which covers 1,000 hectares and cost $3.5 billion to build, will unlikely turn a profit if it services bilateral trade alone, but it could upend the role of US and Mexico in facilitating regional trade if it precedes other promised projects. A decision by Brazil to not join China’s Belt and Road, right before Xi’s visit for the G20, would appear a blow, but the logistics of building across the Andes (and the Amazon) were likely a bigger obstacle.

FOR BUSINESS. Chancay has been labelled as a threat to US regional primacy, but it could also end up being another cautionary tale for Chinese investors and local governments alike. To Peru's north, Ecuador’s $2.25 billion Coca Codo Sinclair dam is seen not only as an economic boondoggle but an ecological disaster. To the south, Chinese investment in Chile’s energy and mining sectors has become a political football, seen by many as an intolerable risk.

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ARGENTINA. UNITED STATES. Milei-a-Lago

The Trump of the south goes all-in.

Javier Milei became the first foreign leader to visit Donald Trump after the US election Thursday, with a meeting at Mar-a-Lago followed by a speech to a Republican think tank. Local media said Milei wanted a new trade deal with the US.

INTELLIGENCE. Milei is allegedly pushing for an Argentina-US trade pact that would bypass Mercosur. But how this squares with