Washington pressures Peru to line up with US war policy against China

Cesar Uco

The Trump administration is strongly pressuring the crisis-ridden and deeply unpopular Peruvian government of President Dina Boluarte to distance itself from China and closely align with US imperialism’s drive to reassert its hegemonic position in Latin America.

Defense Secretary Pete Hegseth, Peruvian Defense Minister Walter Astudillo and Foreign Minister Elmer Schialer stand for the US and Peruvian national anthems before a May 5 Pentagon meeting. [Photo: Navy Petty Officer 1st Class Alexander Kubitza, DOD]

At a meeting held at the Pentagon at the beginning of last month between US Defense Secretary Pete Hegseth and Peruvian Minister of Defense Walter Astudillo and Minister of Foreign Affairs Elmer Schialer, Hegseth warned Peru that China poses a “significant threat to peace and security in Latin America.'

The Pentagon chief continued, telling the visiting Peruvian officials:

Beijing is investing and operating in the region for unfair economic gain and together, in order to prevent conflict, we need to robustly deter China's potential threats in the hemisphere.

The meeting was billed as an event designed to “strengthen cooperation between the two countries.” Hegseth stressed that “putting America first also means we're putting the Americas first considering what we're up against. We share a lot of the same challenges and common threats that require a very serious response.”

Responding to Hegseth’s demands for mutual commitment to unleashing “a very serious response” against China, General Astudillo made a subservient declaration of Peru’s “commitment to this relationship”, going on to declare Washington “a historic, and key partner.”

Schialer went further, declaring that for Peru, the US constituted an “historic ally in many things” including supposedly shared “values ... from the Western world”. He emphasized that the Peruvian government wants to “upgrade” its ties to Washington to achieve “a comprehensive or integral strategic relationship”.

The statements made by Hegseth, Astudillo, and Schialer go beyond the typical rhetoric of bilateral dialogue. They take as their starting point that a confrontation between US imperialism and China in South America is imminent, as Washington turns to militarism as a means of offsetting its diminished economic influence in the region.

As for the obsequious tributes by the visiting Peruvian ministers to a supposed “historic” partnership and shared “values”, they failed to elaborate on that record for good reason. Washington’s ties to Peru, along with the rest of the region, are based upon ruthless exploitation of labor and natural resources, along with the fomenting of coups and support for regimes based on mass murder, “disappearances” and torture.

Among Washington’s “gifts” to Peru was Vladimir Montesinos, the US School of the Americas-trained officer who became a long-time CIA “asset” and the power behind the throne of dictator Alberto Fujimori, directing death squad massacres and a ferocious campaign of military repression whose legacy still scars Peru.

Peru has become the epicenter of Washington’s clash with China over dominance in Latin America in part because of the recent opening of the mega seaport of Chancay, built by the Chinese state-owned company COSCO.

Located 73 kilometers north of Peru's capital, Lima, the Chancay seaport was constructed to serve as the central hub for exports from South America to China. In its completed phase, it is expected to serve as the final link in a pipeline bringing exports from across the region, with modern rail and road networks running from Brazil’s Atlantic coast all the way to the Pacific. Built using the most modern technology, it can also serve Chile and Ecuador, with ships departing from Valparaiso and Guayaquil towards Chancay, where exports to China from all South America will be concentrated.

The Chancay Seaport will significantly reduce shipping time and costs, providing an incentive for expanded Chinese investments in Peru. With an initial investment of US$1.2 billion, the Chinese have expressed interest in investing an additional US$2.3 billion, bringing the total to US$3.5 billion. The extra investment is contingent upon deals between Brazil and China.

China’s goal goes beyond using the seaport to export goods to China. The overall project includes the Chancay Logistics and Industrial Complex, spanning a total area of 842.5 hectares. The initial investment for the complex was around US$240 million. The opening of electric car assembly plants will position Peru as a key center for the production and distribution of EVs in South America. The latter stages (mainly industrial) are expected to generate approximately 20,000 direct jobs upon completion.

Peru is the world’s third-largest copper exporter – after Chile and the Democratic Republic of the Congo – and China is overwhelmingly its main customer. In the first quarter of this year, Peru exported US$6.62 billion worth of the strategic mineral, with US$4.88 billion of the total going to China.

In 2023, China accounted for more than double the exports going to the US, US$22.5 billion as opposed to US$9.3 billion, with the gap only widening since. The 2023 figures also show China with a substantial lead over the US as a source of Peruvian imports, US$13.8 billion vs. US$11.1 billion.

On the eve of the US-Peru Pentagon meeting, Peruvian exports to China rose by 12.4 percent in March, the sharpest increase since October 2024, driven in large part by the Trump administration’s tariffs regime.

Similarly in neighboring Bolivia, China accounted for US$1.21 billion in exports, as opposed to just US$279 million going to the US in 2023. The country has come into the crosshairs of US imperialist policy in the region in no small measure because it boasts the world's largest reserves of lithium, a key component for electric vehicles, high-tech products, and advanced weapons systems. Deals to initiate significant extraction and processing of the strategic mineral have been signed with Chinese and Russian firms, but are currently tied up in court as a result of what the government charges are politically motivated lawsuits.

For Brazil, Latin America’s largest economy with a GDP of US$2.18 trillion, exports to China totaled US$94.41 billion in 2023, while exports to the US amounted to just US$38.15 billion. The difference in imports was not as extreme, with Brazil importing $67.77 billion from China and $54.33 billion from the US.

The struggle between the US and China for dominance in Latin America confronts the capitalist ruling class in Peru and throughout Latin America with an existential dilemma. On the one hand, reversing the economic integration of the Latin American and Chinese economies, which has grown steadily over the course of decades, would cut across profit interests that have developed in tandem with exports to China.

Moreover, any attempt to redirect supply chains to the US as part of a “Fortress Americas” strategy of unrestrained US domination of the Western Hemisphere in preparation for war with China would mean a violent dislocation of national economies leading to an eruption of class struggle

On the other hand, these same layers of the Latin American national bourgeoisie depend upon US imperialism as the cockpit of global counterrevolution in their confrontations with the powerful and growing workers struggles across the region.

Washington is forging close ties to far right regimes from that of Milei in Argentina, to those of Bukele in El Salvador and Noboa in Ecuador. Peru’s President Boluarte has shown every indication of wishing to join this rogues’ gallery, from her slavish appeals to President Trump to her government’s recent announcement that it is looking to follow Trump’s example in seeking an agreement with Bukele to send 'highly dangerous foreign inmates' to El Salvador’s infamous CECOT mega-prison.

Undercutting the strategy of war and counterrevolution pursued by both US imperialism and its junior partners in the Latin American national bourgeoisie is the fact that the crisis of US capitalism and the reactionary policies pursued by the Trump administration are provoking an increasingly broad and determined struggle on the part of the US working class and broad masses of the population.

Conditions for a financial crisis building up

Nick Beams

An immediate economic fallout from the US bombing of Iran, such as from the closure of the Strait of Hormuz and an escalation in oil prices appears to have been averted. However, there is a growing amount of combustible material in the financial system which could ignite as US imperialism continues its military rampage.

Two recent reports have pointed to some of the potential triggers for financial turmoil.

Last week the Financial Stability Board (FSB), a global body comprising regulators from major economies, issued a warning about “vulnerabilities” in the global $12 trillion commercial real estate (CRE) market arising from the high level of debt and the rise in interest rates over the past three years.

Commercial Real Estate sale sign sits on a lot in Wheeling, Ill., Tuesday, Nov. 7, 2023 [AP Photo/Nam Y. Huh]

Earlier this month, a study of the private credit system carried out by Moody’s Analytics, together with the US Securities and Exchange Commission and a former top adviser to the Treasury, reported that it was so intertwined with the banking system that it could become a “locus of contagion” in a financial crisis.

The CRE sector was hit by the decline in demand for office space as a result of COVID-19 and the rise in interest rates that followed.

The report said that CRE had “weathered the recent adverse developments” but warned that problems were by no means behind it. Non-performing loans issued by US and Australian banks for office buildings had “increased significantly” in 2023.

The FSB said that interest rates for commercial real estate-backed mortgage securities, comprising individual loans bundled into a package, had risen compared to other corporate loans.

“Distress was evident in multiple sectors” of the markets. Office and real estate segments had “the highest rate at 12.6 percent and 11.2 percent respectively” as of September last year.

The CRE market is vulnerable to shocks, the report noted, because there is an “inherent opacity in the valuations” of assets.

“The CRE market is illiquid [meaning assets are not easily turned into cash] and, as a consequence, it may be difficult to price assets in times of stress. Book valuations for assets and collateral disclosed by market participants (both banks and non-banks) may recognise losses with delay, and losses may therefore emerge abruptly in a prolonged downturn.”

It also pointed to the practice of “extend and pretend” whereby banks roll over loans based on book valuations rather than recognise that losses have already been incurred based on market valuations.

Another source of instability is that banks not only provide loans directly to the CRE sector. They also finance non-bank financial bodies such as hedge funds and real estate investment trusts which then finance CRE development. But these connections are “complex and difficult to capture.”

“Shocks to the CRE sector could spill over to the banking sector, thereby highlighting the importance of monitoring banks’ lending to non-bank CRE investors in addition to banks’ own CRE loan portfolio.”

The report pointed to the high level of leverage (debt) in the sector which globally was about 45 percent of total assets. The figure is an average and at the extreme was much higher. There was a “tail” of real estate investment and other property funds in the US, Canada, Singapore and Germany that has “large levels of leverage with debt being at least three times equity.”

It said there were still “considerable data gaps” on the links between banks and non-banks and called on regulators to take action. There have been many such calls in the recent period as non-bank private sources of credit play an increasing role in the financial system, but there has been little movement on this front.

The Moody’s Analytics report was described by the Financial Times (FT) as “one of the most comprehensive analyses to date on how private credit would affect the broader financial system during a period of market upheaval.”

It found that these funds had become enmeshed with the banking system creating “new linkages [that] introduce new modes of systemic stress.”

The significance of private funds has grown in leaps and bounds since the global financial crisis of 2008 and the introduction of tighter lender standards on the banks. But just as water finds the gaps in any system meant to contain it, finance has managed to fund new ways to get around the restrictions in the search for higher returns that come from riskier loans.

The report said that the “opaqueness” of private credit funds and their “role in making the financial network more densely connected mean they could disproportionately amplify a future crisis.”

Reporting on the analysis, the FT said the researchers had found that “during moments of market stress, business development companies had become more tightly correlated with the turmoil in other sectors than they were previously.”

The implication of this development is that a crisis which develops in one area of the market is much more difficult to contain than it was in the past.

“Today’s network of interconnections in the financial system is more distributed, with a denser web of connections than it had pre-crisis, when the system operated more like a ‘hub and spoke’ model with banks at the centre of the model,” the report said.

In a report issued in May, the Boston branch of the Federal Reserve also warned that bank lending to the $1.6 trillion private credit sector posed risks to the entire US financial system.

“Banks’ extensive links to the private credit market could be a concern because those links indirectly expose banks to the traditionally higher risks associated with private credit loans,” the Boston Fed report said.

A potentially toxic mix of high debt and elevated interest rates is developing in conditions where there are number of shocks being delivered to the economy—from tariff hikes to war.

“Private credit lenders’ reliance on banks for liquidity could pose systemic liquidity risks to the banking sector if a sufficient number of private credit lenders… draw down on their bank credit lines simultaneously in response to adverse aggregate shocks,” it said.

All the conditions are present for the eruption of a new crisis in the US and global financial system. How rapidly it will emerge cannot be predicted. But the characteristic feature of the present period is the speed of events.

In just a matter of months, the post-war trading order has been upended, democratic rights in the US are being shattered, the most powerful bombs, short of nuclear weapons, have been used against Iran, the dollar has declined, and the price of gold has hit new record highs—a 30 percent increase so far this year. In this situation a financial crisis is likely to make its appearance very much sooner than later.

Supreme Court order threatens “thousands” of immigrants with risk of torture and death

Patrick Martin

President Trump and White House deputy chief of staff Stephen Miller, who spearheads the anti-immigrant witch-hunt. [AP Photo/Paul Sancya]

In a decision Monday that rubber-stamps the Trump administration’s brutal anti-immigrant agenda, the US Supreme Court stayed a lower court ruling that would have required federal authorities to give meaningful notice before deporting immigrants to third countries with which they have no ties—even if they face the risk of torture or death.

The ultra-right majority offered no justification for its action. In a 6–3 decision, the court stayed a nationwide injunction issued by a federal district judge in Boston and upheld by the First Circuit Court of Appeals. That order had required the Department of Homeland Security (DHS) to provide at least 10 days’ advance notice before deporting a detained migrant to a country other than their own. If the migrant objected because of a fear of torture or death, and the DHS refused to reconsider, the migrant would then have 15 days to file an appeal.

While the decision was technically a procedural one—allowing the government to continue carrying out no-notice third-country deportations while the issue is litigated in the federal courts—that process could take years. In the interim, this would mean “exposing thousands to the risk of torture or death,” as the three moderate-liberal justices warned in a 20-page dissent.

The Trump administration’s purpose goes beyond the specific individuals it is seeking to deport to countries like Libya and South Sudan, which are wracked by civil war, mass starvation, or both. It aims to use the threat of such a fate to terrorize many more immigrants into fleeing the United States (“self-deportation”), rather than face being shipped to a country where they don’t speak the language, have no prior connection, are separated from their families, and live under the constant risk of torture and death.

The initial case involved eight detained immigrants whom the administration planned to deport to South Sudan, even though only one was actually from that country. One was to be trans-shipped eventually to his country of origin, Myanmar. The remaining six were from Latin America or Southeast Asia and had either been denied reentry by their home countries or refused to return.

After Boston federal judge Brian Murphy issued a stay, the Department of Homeland Security flew the migrants to a US military base in Djibouti, where they have been detained in a shipping container pending the appeal.

Soldiers arrive to the Allafah market, in an area recently recaptured by Sudan's army from the Rapid Support Forces paramilitary group, in the Al Kalalah district, south of Khartoum, Sudan, March 27, 2025. [AP Photo/AP Photo, File]

A second group of immigrants was reportedly slated for deportation to Libya, despite denials by both of the right-wing factions vying for control of the war-torn country. Libya has endured 14 years of civil war following the US-NATO intervention that overthrew the nationalist regime of Colonel Muammar Gaddafi. Both rival governments have denied making any agreement with the United States to accept non-Libyan deportees.

In response to the ruling, Trina Realmuto, executive director of the National Immigration Litigation Alliance—one of the groups representing the migrants facing deportation to South Sudan—warned, “The ramifications of the Supreme Court’s order will be horrifying; it strips away critical due process protections that have been protecting our class members from torture and death.” 

Realmuto and other legal representatives of the migrants refuted the Trump administration’s typical claim—made again in its filing with the Supreme Court—that its deportations are aimed at “the worst of the worst.” In reality, they noted, many of the migrants facing deportation have no criminal record whatsoever.

They also pointed out the staggering hypocrisy of the Department of Homeland Security’s actions: While it was deporting migrants to South Sudan, the US State Department had issued a travel advisory instructing all non-essential US personnel to leave the country due to “armed conflict” and “fighting between various political and ethnic groups.”

Solicitor General John Sauer, who argued the case before the Supreme Court on behalf of the Trump administration, previously represented Trump personally in Trump v. United States. In that landmark decision issued a year ago, the Court ruled that a sitting president is immune from prosecution for any crime committed while carrying out his official duties.

The dissenting opinion in the deportation case, authored by Justice Sonia Sotomayor and joined by Justices Elena Kagan and Ketanji Brown Jackson, excoriated the majority’s action in language rarely seen in legal documents of this kind.

The Trump administration was engaged in flagrant defiance of temporary restraining orders issued by the lower courts, for which the Supreme Court majority was rewarding it, Sotomayor wrote. The government “openly flouted two court orders, in­cluding the one from which it now seeks relief… This is not the first time the Court closes its eyes to noncompliance, nor, I fear, will it be the last.”

She continued, “The Government has made clear in word and deed that it feels itself unconstrained by law, free to deport anyone anywhere without notice or an opportunity to be heard. The episodes of noncompliance in this very case illustrate the risks.”

Citing the narrow escape of two groups of detainees, one bound for Libya and the other for South Sudan, Sotomayor wrote: “Only the District Court’s careful attention to this case prevented worse outcomes. Yet today the Court obstructs those proceedings, exposing thousands to the risk of torture or death.”

The position of the Trump administration, in the face of legal requirements that noncitizens should receive due process, including judicial hearings, before deportation, was “skip­ping such proceedings entirely and simply whisking noncitizens off the street and onto busses or planes out of the country.”

“The Due Process Clause represents ‘the principle that ours is a government of laws, not of men, and that we submit ourselves to rulers only if under rules’,” Sotomayor wrote. “By rewarding lawlessness, the Court once again undermines that foundational principle.”

She concluded, “Apparently, the Court finds the idea that thousands will suffer violence in far-flung locales more palatable than the remote possibility that a District Court exceeded its remedial powers when it ordered the Government to provide notice and process to which the plaintiffs are constitutionally and statutorily entitled. That use of discretion is as incomprehensible as it is inexcusable.”

The immediate impact of this ruling will be the shipping of planeloads of immigrants to El Salvador, South Sudan, Libya and any other country that will accept them in return for bribes—financial, military or political—from the US government.

European powers serve as accomplices to US-Israeli war against Iran

Peter Schwarz

German Defence Minister Boris Pistorius, right, speaks during a meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv, Ukraine, on Thursday, June 12, 2025 [AP Photo/Evgeniy Maloletka]

While the US and Israel have bombed Iran and set the entire Middle East ablaze, the European powers have served as accomplices. Under the guise of calling for “de-escalation” and a “diplomatic solution,” they demand that Tehran capitulate unconditionally to imperialist aggression.

The events are reminiscent of a mafia movie. Israel launched an unprovoked attack against Iran, bombing industrial facilities and cities and deliberately assassinating high-ranking politicians, scientists and officials. The US sent a fleet of strategic bombers across the Atlantic and has destroyed Iranian nuclear facilities. President Donald Trump and his Secretary of War Pete Hegseth have threatened the country with total annihilation in gangster language if it does not surrender voluntarily. And the Europeans are playing the lawyer and calling on the regime in Tehran to commit suicide voluntarily in order not to be murdered.

German Chancellor Friedrich Merz, French President Emmanuel Macron and British Prime Minister Keir Starmer responded to the US attack on Iran with a joint statement that contains not a single word of criticism of the assault, which violates international law. While they do not go so far as to explicitly welcome the US action, their joint statement can only be understood as approval.

They support the pretext used by Israel and the US to justify their attack on Iran: “We have consistently been clear that Iran can never have a nuclear weapon and can no longer pose a threat to regional security.” They comment on the US military strikes on the nuclear facilities in Fordo, Natanz and Isfahan with the words: “Our aim continues to be to prevent Iran from acquiring a nuclear weapon.” And they demand that Iran, whose chief negotiator was assassinated by the Israelis, “engage in negotiations leading to an agreement that addresses all concerns associated with its nuclear program.”

One can be sure that they will also support further US attacks after Iran fired several missiles at the US military base in Qatar late Monday. They caused no damage, as Qatar was warned in advance and the missiles were intercepted. Merz, Macron and Starmer are only against “escalation” when it comes from Iran, not when it comes from the US or Israel.

The justification of the US attack by Berlin, Paris and London does not mean that they have no differences with Washington. There are fears in European capitals that a conflagration in the Middle East could turn into a disaster and plunge the entire global economy into the abyss, especially if Iran carries out its threat to block the Strait of Hormuz, through which about one-fifth of the world’s oil supply is transported.

Just four days ago, President Macron warned that violent regime change in Iran, as sought by Israel and the US, would only lead to “chaos.” “The biggest mistake today is to try to bring about regime change in Iran by military means,” he said. “Does anyone believe that what was done in Iraq in 2003, what was done in Libya in the last decade, was a good idea? No!”

The European governments also fear that the Israeli and US attack on Iran would further discredit their war propaganda against Russia. After all, they accuse Russian President Putin of waging a “war of aggression contrary to international law” against Ukraine. But if anyone is waging a war of aggression contrary to international law, it is the US and Israel. International law experts largely agree on this.

But although the criminal nature of the war is obvious and European governments fear disaster, they are unreservedly siding with the aggressors. This alone shows that this is not about tactical issues, but about fundamental imperialist interests.

German Defense Minister Boris Pistorius summed it up on Sunday evening on ARD television: “Legitimate or legal is a subtle but important distinction.” If the German government considers a goal, such as the bombing of Iran, to be “legitimate,” it disregards the law and legality.

Germany, France and Britain may view Trump’s aggressive approach with unease, but sharing in the spoils is more important to them than moral or legal scruples. They have been participating in the wars to subjugate the Middle East since the first Iraq war 34 years ago. In 2001, they even invoked NATO’s collective defense clause for the attack on Afghanistan.

There have been at times differences with France and Germany, such as in 2003 during the second Iraq war and in 2011 during the Libyan war. However, the German government never went so far as to oppose the US or even prohibit it from using the military base in Ramstein, Germany, which is important for the war effort.

The UK has always acted as the US’s closest ally. Even now, Prime Minister Keir Starmer called Trump shortly after the attack on Iran to assure him of his support. This is not about “buddying up to the US,” as Business Secretary Jonathan Reynolds assured the press, but about “protecting British interests.”

Germany is, alongside the US, Israel’s most important supporter. It remains steadfastly loyal to the Netanyahu regime despite its war crimes in Gaza, and persecutes its opponents as alleged “anti-Semites.” Chancellor Friedrich Merz aptly described the relationship between Berlin and Jerusalem when he said that Israel does “the dirty work for all of us.”

Today, the NATO summit begins in The Hague, attended by the heads of state or government of all 32 member states, including Trump. The focus is on increasing military spending to 5 percent of GDP, which is two and a half times the previous NATO target of 2 percent. The massive arms offensive is intended to enable European NATO members to wage war against the nuclear-armed power Russia within three to five years.

The primary goals of the Europeans are to continue to commit the US to supporting the war in Ukraine and to prevent Trump from concluding an agreement with Russia over their heads. In return, they are expected to provide even stronger support for the US offensive in the Middle East and the encirclement of China.

As was the case before the First and Second World Wars, when one fateful decision followed another and all the imperialist powers were drawn deeper and deeper into the maelstrom of war, they are once again racing toward a catastrophe that threatens the survival of humanity.

What drives them is the insoluble crisis of the outdated capitalist system—the incompatibility of global production, which unites billions of workers in a single international production process, with the nation-state system and private property on which capitalism is based. As in 1914 and 1939, the capitalists are trying to resolve this crisis through the violent redivision of the world.

It would be fatal to expect any party that defends capitalism to provide a way out of this crisis. Whether right-wing extremist, like Trump’s Republicans, “centrist,” like the US Democrats and Macron, or social democratic, like Starmer’s Labour Party and Germany’s SPD—they all support war, rearmament and militarism and suppress social and political opposition to them.

The only realistic strategy against war and militarism is the mobilization of the international working class on the basis of an anti-capitalist, socialist program. The conditions for this are in place. The ruthless attack on Iran has also reignited resistance to the genocide in Gaza, against which hundreds of thousands have already taken to the streets. More and more workers, are fighting back against the social cuts and layoffs with which they are expected to pay for the costs of war.

But this movement needs a perspective and political leadership. The ruling class relies on pseudo-left parties to absorb and neutralize resistance.

In Germany, the Left Party has gained support because it criticized militarism and the far-right AfD. But its stance on the war in the Middle East differs little from that of the federal government. Like the government, it calls for an immediate halt to Iran’s nuclear program and claims that this can be achieved through diplomatic rather than military means.

In France, Jean-Luc Mélenchon, the leader of La France insoumise, is appealing to President Macron to oppose Trump and Netanyahu. He is trying to convince Macron that this is in France’s best interests:

As terrible as the context is, and perhaps precisely because of it, there is an opportunity for our country to demonstrate its well-understood greatness and influence. France must refuse to join the deadly duo. If it holds high the banner of peace and international law, its word will be received everywhere as liberation and support.

What a pitiful farce! France, like the US, Germany and Britain, is an imperialist power with a bloody trail of colonial crimes behind it—from Vietnam to Algeria to the Congo, to name but a few. To expect Macron, the president of the rich, to uphold peace and international law is the height of political deception.