The United States has given a heads up to a potential $1.5 billion Foreign Military Sale to Peru for redesigning and relocating the country’s major naval hub in Callao.

The move is a strategic effort to boost American presence in South America as China is rapidly expanding its maritime footprint in the region.

The proposed agreement involves the construction of new facilities at Callao Naval base, situated near Peru’s busiest commercial port in Callao.

The base is less than 80 km south of the new Chancay mega-port, which is a $1.3 billion facility developed and operated by China’s state-owned COSCO Shipping.

According to the Pentagon’s Defence Security Cooperation Agency (DSCA), the project will improve Peru’s port infrastructure to accommodate both current and future naval logistics.

It would also reduce the civilian-military interactions at the existing facility that shares waterways with the commercial port.

The separation of military and civilian vessel traffic will create a safe platform for naval operations while freeing up space for the existing commercial port to expand its operations.

“This proposed sale will support the foreign policy objectives of the United States by helping to improve the security of an important partner, which is a force for political stability, peace, and economic progress in South America,” the DSCA said in a statement.

The contractors for the potential sale will be chosen through a transparent, competitive process.

The timing of the project highlights the increasing American unease regarding China’s economic and infrastructural reach in the Western Hemisphere.

China’s Chancay port, operational since 2024, under the Belt and Road Initiative, has reshaped shipping in the region.

By improving connectivity and logistics between South America and China, the region’s most important trading partner, the port could redirect Pacific Shipping away from U.S infrastructure, which has worried Washington.

The U.S has also raised concerns about the ‘dual-use’ of Chinese ports, stating commercial facilities could be used for military ambitions.

The American investment in Callao ensures that the U.S maintains close relations with the Peruvian defence forces deployed in the region.

The deal shows long-term engagement between the two nations, and if sealed, around 20 US government or contractor representatives will be sent to Peru for at least a decade to manage construction and oversee the completion of the relocation project.