Keiko Fujimori's Inauguration as President of Peru and the South American Expansion of US-China Strategic Competition: South Korea's Third Partner Strategy

Executive Summary

With Keiko Fujimori's inauguration as Peru's first elected female president in July 2026, the structural contradiction between her pro-US ideological alignment and economic dependence on China has emerged as a key test for Peruvian diplomacy. Fujimori has publicly declared her intention to participate in the Trump administration's 'Escudo de las Américas' initiative. However, the structural reality of reliance on trade with China, coupled with the operation of the Chancay port by China COSCO, makes a clear alignment virtually impossible, suggesting a prolonged period of strategic ambiguity. Peru's shift to a right-wing government, following Argentina, Chile, and Ecuador, will accelerate the structural rightward shift in the South American political landscape and mark a turning point for the full-scale intensification of US-China strategic competition in South America, centered on security, infrastructure, and mineral supply chains. South Korea must secure a preemptive position through a 'third trusted partner' strategy, avoiding alignment with either the US or China, focusing on three pillars: participation in the Chancay logistics network, investment in critical minerals, and cooperation in digital security. The initial 6-12 month policy formation period of the Fujimori government presents a critical window of opportunity to minimize South Korea's entry costs.

I. Issue Situation Analysis

Keiko Fujimori's Inauguration as President of Peru: A Testbed for China-US Balancing Diplomacy

Issue Situation Analysis

1. Background and Course of the Issue

Peru has experienced extreme political instability over the past decade. Prior to Fujimori's inauguration, Peru witnessed an unprecedented turmoil with nine presidents changing in ten years [15], marked by repeated impeachment, resignations, and parliamentary dissolutions. Amidst this structural governance crisis, economic recession and security deterioration have simultaneously intensified. Against this backdrop, Keiko Fujimori won the presidential election runoff in June 2026, narrowly defeating the left-wing candidate Pedro Castillo by less than 50,000 votes [16]. This victory came after her fourth presidential bid, succeeding after three previous runoff defeats since 2011 [16].

Keiko Fujimori is the daughter of former President Alberto Fujimori, who ruled Peru in the 1990s. Alberto Fujimori's tenure was characterized by 'Fujimorismo,' a blend of neoliberal economic policies, populism, and strong-arm security governance [9]. This political legacy continues to generate both strong support and deep divisions within Peruvian society. Keiko Fujimori employed an electoral strategy that inherited this political legacy while re-establishing it as a modern right-wing platform. At her inauguration ceremony held in Congress on July 28, 2026, she stated, "I swear to faithfully carry out the presidential duties entrusted to me by the nation from 2026 to 2031" [17], also setting a historical record as Peru's first elected female president [13].

2. Current Situation

Numerous regional leaders attended the inauguration, including Javier Milei of Argentina, José Antonio Kast of Chile, Rodrigo Paz of Bolivia, Daniel Noboa of Ecuador, and Yamandú Orsi of Uruguay [16]. Notably, Chilean President Kast made a special trip to attend the inauguration, actively demonstrating solidarity with Fujimori [14]. This was widely reported by regional media as a symbol of the consolidation of the Latin American right-wing bloc.

Immediately after taking office, Fujimori declared a tough security strategy, prioritizing the response to the security crisis by deploying the military to high-crime areas [15]. Peru is currently suffering from the worst gang violence, extortion, and illegal mining in decades, and voter anger over these issues was a key driver of Fujimori's election victory [13]. Furthermore, she publicly expressed Peru's intention to join the 'Escudo de las Américas' (Shield of the Americas) initiative, a continental alliance to combat transnational criminal organizations, promoted by the Trump administration [1][4][7].

However, it is noteworthy that then-President Trump did not publicly endorse Fujimori during his campaign or send a direct congratulatory message after her election [1][4]. This suggests that the US-Peru relationship has not yet been clearly positioned as a strategic priority for the US, contrary to Fujimori's intentions. Major regional media outlets, including Última Hora (Paraguay), El Nacional (Venezuela), and El País (Uruguay), focused on the potential conflict between Fujimori's presidency strengthening the right-wing bloc in Latin America and the reality of China's deep entrenchment in the Peruvian economy [1][4][7].

3. Key Actors and Their Positions/Interests

Keiko Fujimori and the new Peruvian governmentare ideologically inclined towards close ties with the Trump administration but face a structural dilemma where they cannot ignore their economic relationship with China. China is firmly established as Peru's largest trading partner [1][4][7], and this economic interdependence is a key variable constraining the Fujimori government's foreign policy. For the Fujimori government, maintaining dual balancing diplomacy—security cooperation with the US and economic cooperation with China—is not a choice but an unavoidable reality.

Chinais utilizing Peru as a bridgehead for its South American strategy by operating the Chancay port as a key logistics hub on the Pacific coast of South America [1][4][7]. The Chancay port is more than just a trade infrastructure; it is a strategic asset symbolizing China's control over South American supply chains and its expansion of geopolitical influence. As the Fujimori government strengthens ties with the US, tensions surrounding this Chinese hub are bound to escalate.

The US Trump Administrationis pursuing a strategy to counter China's regional influence by forging alliances with right-wing governments in South America. According to an analysis by the Peterson Institute for International Economics (PIIE), the Trump administration is attempting to control supply chains through seven mechanisms—excluding forced labor, restricting trade with third countries, and origin regulations—in its Trade Agreements with the Americas (ARTs) signed with countries like Argentina, Ecuador, El Salvador, and Guatemala, without explicitly naming China [3]. Although Peru is not yet included in these agreements, Fujimori's expressed intention to join the 'Escudo de las Américas' is interpreted as a signal of its desire to be incorporated into the US's strategic network in the Americas.

Regional Right-Wing Leaders, particularly Kast of Chile, Milei of Argentina, and Noboa of Ecuador, demonstrated a visible consolidation of right-wing solidarity in Latin America by attending Fujimori's inauguration [14][16]. They are emerging as key actors in reshaping the regional political landscape, sharing common agendas of combating criminal organizations, economic liberalization, and anti-leftist solidarity.

Brazilunder the left-wing Lula government is responding to the Trump administration's tariff pressures by filing a case with the WTO and accelerating trade agreement negotiations with China within Mercosur [2]. Brazil's actions form another strategic axis in South America, contrasting with Peru's approach, and are deepening the diplomatic divergence between the left and right blocs in the region.

4. Summary of Key Issues

First, geopolitical tensions surrounding the Chancay portis the most critical issue. The Chancay port, operated by China, serves as a strategic logistics hub on the Pacific coast of South America, directly clashing with the US strategy to contain China's infrastructure influence in the region. If the Fujimori government restricts or renegotiates China's operating rights for this port at the behest of the US, it is expected to have severe repercussions on Peru-China economic relations as a whole.

Second, the contradiction between participation in the 'Escudo de las Américas' and economic dependence on Chinais a key issue. Fujimori's participation in the US-led security cooperation initiative while simultaneously maintaining China as its largest trading partner inherently creates tension. Given that the Trump administration's Trade Agreements with the Americas (ARTs) are effectively designed to counter China [3], Peru's pursuit of these agreements would inevitably lead to a deterioration of relations with China.

Third, the sustainability of the Latin American right-wing blocis a key issue. The convergence of right-wing leaders like Milei, Kast, Noboa, and Fujimori is reshaping the regional political landscape in the short term. However, given the differing economic realities and levels of dependence on China among these countries, it remains uncertain whether this alliance will translate into substantive policy coordination. Notably, Brazil's move towards closer ties with China [2] suggests that the regional division between blocs will likely deepen.

Fourth, the instability of Peruvian domestic politicsis a key issue. Fujimori won by a narrow margin of less than 50,000 votes [15][16], and deep divisions within Peruvian society regarding Fujimorismo persist [9]. Whether she can secure a stable majority in Congress and manage judicial risks will be crucial factors determining her policy implementation capacity. Continued domestic political instability could also hinder the consistency of her foreign policy.

II. In-depth Issue Analysis

Keiko Fujimori's Inauguration as President of Peru: A Testbed for China-US Balancing Diplomacy

In-depth Issue Analysis: Analysis of Root Causes, Structural Context, and Historical Precedents

1. Analysis of Root Causes

The root causes of Keiko Fujimori's rise to power and the ensuing geopolitical tensions extend beyond mere internal political shifts in Peru. They are deeply intertwined with the chronic failures of Peruvian state governance, the country's economic dependence on external actors, and the structural trend of US-China strategic competition expanding into the South American continent.

The most direct cause is Peru's political dysfunction. In the extreme instability of the past decade, marked by nine presidential changes, Peruvian voters have increasingly narrowed their choices, prioritizing stability and order over ideology [15]. In a system plagued by repeated impeachments, resignations, and parliamentary dissolutions, the state's administrative capacity has been virtually paralyzed, creating a vacuum filled by criminal gangs and illegal mining operations. Fujimori's narrow victory, by less than 50,000 votes, reflects the desperate public demand for a 'strong state' rather than her ideological appeal [16]. Paradoxically, this also highlights the fragility of the Fujimori administration, as a government built on such a slim popular mandate is constantly exposed to internal divisions and congressional oversight.

From an economic perspective, Peru's structural dependence on China is a key variable. China has firmly established itself as Peru's largest trading partner, and the Chancay port has emerged as the largest infrastructure hub in South America operated by the Chinese state-owned shipping company COSCO [1][4][7]. This port is more than just a logistics facility; it is a strategic asset symbolizing China's control over South American supply chains and is a focal point of US scrutiny. The structural contradiction arises precisely from Fujimori's need to maintain economic ties with China while simultaneously declaring close alignment with the Trump administration. Ideological orientation and economic reality are in direct conflict.

From a security standpoint, the expansion of transnational criminal organizations is a significant factor. Peru is the world's largest producer of cocaine, and illegal mining and gang economies have infiltrated local governance to a considerable extent [15]. This issue provides the Trump administration with a rationale for its 'Escudo de las Américas' initiative, aiming to build a cooperative response system with right-wing governments in the region, thereby strengthening the political logic for Fujimori's participation in US-led security cooperation [1][4]. However, as this security cooperation framework creates points of conflict with China's economic interests, the security issue transcends mere public safety concerns and becomes a matter of geopolitical alignment.

2. Structural Context

Political Structure

Fujimori's ascent to power is not an isolated event but reflects a structural shift in the right-wing political landscape across Latin America. A trend of right-wing or far-right leaders consecutively coming to power in major South American countries—Milei in Argentina, Kast in Chile, Noboa in Ecuador, and now Fujimori in Peru—is taking shape [16]. Their joint attendance at each other's inaugurations signifies more than mere diplomatic courtesy; it is interpreted as a visible consolidation of ideological solidarity and a signal of a collective counter-stance against regional left-wing governments [14].

This political structural change aligns with the Trump administration's strategy towards South America. The Trump administration seeks to contain China's expanding influence in the region by co-opting right-wing governments as partners in the 'Escudo de las Américas' initiative [1]. However, the fact that Trump did not publicly endorse Fujimori or send a direct congratulatory message after her election suggests that the US is in a phase of passively accepting this relationship rather than actively managing it as a strategic asset [1][4][7]. This reveals a gap between the diplomatic support Fujimori's government expects from the US and the support it can realistically receive, which could become a factor of uncertainty in future policy operations.

Economic Structure

Peru's structural dependence on China is an economic reality that cannot be resolved in the short term. China is the largest importer and investor in Peru's key mineral resources such as copper, zinc, and iron ore, and the economic relationship between the two countries has been deeply entrenched over decades [9]. The Chancay port is the physical manifestation of this economic relationship; operated by COSCO, it functions as a logistics hub on the Pacific coast of South America, institutionalizing China's supply chain control at a regional level [1][4][7].

The Trade Agreements with the Americas (ARTs) promoted by the Trump administration directly challenge this structure. According to PIIE analysis, the ARTs signed by the US with South and Central American countries like Argentina, Ecuador, El Salvador, and Guatemala include seven supply chain control mechanisms—excluding forced labor, restricting trade with third countries, controlling third-country enterprises, aligning export controls, investment security, rules of origin, and penalty clauses for violations—designed explicitly to target China [3]. If Peru were to join this framework, structural friction with China would be unavoidable. Conversely, refusing to do so would create a dilemma where Fujimori's political stance of close alignment with the US would become hollow.

Brazil's case provides a precedent for this structural dilemma. Faced with the tariff offensive of the Trump administration, Brazil defined it as an infringement of its sovereignty and responded by filing a complaint with the WTO and accelerating negotiations for a Mercosur trade agreement with China. This is realizing a scenario of prolonged US-Brazil conflict and deepening South America's closeness to China [2]. If the Fujimori government chooses to integrate into the US-led trade system, friction may arise in the regional economic cooperation framework with Brazil, indicating that the economic structure has regional complexity beyond simple bilateral relations.

Security Structure

On the security front, Peru is in a position where it is forced to choose between the US-led continental security cooperation system and China's expansion of influence through infrastructure. The Trump administration's 'Shield of the Americas' initiative ostensibly aims to combat transnational criminal organizations, but its dual purpose is to integrate regional right-wing governments into the US-led security order while simultaneously blocking Chinese military and intelligence access [1][4]. The strategic location of the Chancay port emerges as a key US concern in this context. The fact that the logistics hub on the Pacific coast of South America is in the hands of a Chinese state-owned enterprise stimulates US security concerns that it could be repurposed for military or intelligence purposes in case of emergency [11].

The case of the Solomon Islands provides a useful comparative framework for understanding the workings of this security structure. The Solomon Islands is pursuing a dual-balancing diplomacy, simultaneously seeking a ship-rider agreement with the United States and maintaining economic cooperation with China, which is evaluated as a typical manifestation of strategic ambiguity where a weak nation exploits great power competition [12]. Peru is also likely to employ a similar strategic ambiguity, but unlike the Solomon Islands, Peru has a much larger economy and a more complex domestic political structure, placing the sustainability of this strategy on a more unstable foundation.

3. Comparative Analysis of Historical Precedents and Similar Cases

The Legacy of Alberto Fujimori's Era

To understand Keiko Fujimori's rise to power, one must first examine the legacy of her father, Alberto Fujimori's, rule. Alberto Fujimori, who governed from 1990 to 2000, achieved both the suppression of the Shining Path insurgency and economic stabilization through a unique governing style that combined neoliberal economic reforms, hardline public security policies, and populist mass mobilization [9]. However, his rule is also remembered for its authoritarian methods, including the dissolution of parliament, control over the judiciary, and human rights abuses, which form the historical backdrop structuring Peruvian society's divided views on Keiko Fujimori. The fact that Keiko won by a narrow margin demonstrates that this historical division remains actively at play today [16].

Another legacy of Alberto Fujimori's era is his economic liberalization policy. His neoliberal reforms laid the groundwork for opening Peru to foreign direct investment, and this structure became the institutional foundation that enabled the massive influx of Chinese capital thereafter. Keiko Fujimori's emphasis on closer ties with the United States, while inheriting her father's economic path, can be interpreted as an attempt to readjust investment partners within this economic liberalization structure. However, replacing deeply entrenched Chinese capital in a short period is structurally close to impossible.

Historical Patterns of Right-Wing Solidarity in Latin America

The phenomenon of right-wing governments in Latin America displaying ideological solidarity is not new. During the Washington Consensus era of the 1990s, regional right-wing governments shared the US-led economic liberalization agenda and formed a collective identity. However, this solidarity temporarily weakened with the 'Pink Tide' of left-wing movements led by figures like Hugo Chávez in Venezuela, Lula da Silva in Brazil, and Evo Morales in Bolivia in the 2000s. Since the late 2010s, with the re-emergence of right-wing governments such as Jair Bolsonaro in Brazil and Sebastián Piñera in Chile, the region's political pendulum has begun to swing back to the right, and the current strengthening of right-wing solidarity is an extension of this long-term pendulum movement [1][4].

However, the current right-wing solidarity has distinct characteristics compared to the past. While past solidarity was primarily formed around the common agenda of economic liberalization, the current solidarity differs in that it centers on responding to security crises and anti-immigrant/anti-crime discourse as its core adhesive. Furthermore, the Trump administration's 'Shield of the Americas' initiative providing an external focal point for this solidarity is another structural characteristic different from the past [1][4][7]. This signifies that regional right-wing solidarity is evolving beyond mere ideological affinity towards institutional integration with US strategy towards South America.

The "Third Country Battlefield" of US-China Competition: A Comparative Analysis of Similar Cases

Peru's situation can be classified as a typical example of the pattern where US-China strategic competition uses the domestic politics and economic structures of third countries as a battlefield. In addition to the Solomon Islands mentioned earlier, Zambia in Africa, Malaysia in Southeast Asia, and Kazakhstan in Central Asia have experienced similar dilemmas of dual balancing diplomacy. The commonality among these countries is that they are pressured by the US-led supply chain reorganization while already being structured to depend on China's infrastructure investment and resource exports [3].

The case of Ecuador provides the most similar precedent to Peru's situation. Ecuador has already signed a Trade Facilitation Agreement (TFA) with the United States [3], and in the process, experienced internal conflicts over how to adjust its energy and infrastructure cooperation with China. The fact that Ecuadorian President Noboa attended Fujimori's inauguration ceremony [16] suggests that these two countries share common strategic directions at a similar geopolitical crossroads. However, unlike Ecuador, Peru possesses the much more concrete and strategically sensitive Chinese infrastructure asset of the Chancay port within its own territory, making the cost of its choices significantly higher.

4. Key Variables in Issue Development

Variable 1: Geopolitical Handling of the Chancay Port

The most decisive variable in the future development of this issue will be the Fujimori government's policy choices regarding the Chancay port [1][4][7][11]. The United States is likely to pressure for changes in its operational structure or increased participation by US companies, viewing it as a strategic base for China in South America. Conversely, China will seek to protect this port as a key achievement of the Belt and Road Initiative's (BRI) expansion into South America. The Fujimori government's stance on this issue could fundamentally alter its relationship with both the US and China. The key turning point will be whether a dual strategy of strengthening security cooperation with the US without altering the port's operational structure is feasible, or whether the US will not accept this and demand a clear choice.

Variable 2: Progress of US Trade Facilitation Agreement (TFA) Negotiations

If the Trump administration seriously pursues negotiations for a TFA with Peru, the supply chain control provisions within the agreement will impose direct restrictions on economic relations with China [3]. In particular, provisions controlling third-country companies and rules of origin could cause structural shocks to Peru's mining and logistics sectors, where Chinese capital is deeply entrenched. The speed of progress and the stringency of the provisions in these negotiations will act as external variables determining the extent of the Fujimori government's adjustments to its relationship with China. Furthermore, if the trend of Brazil accelerating negotiations for a Mercosur agreement with China in response to US tariff measures [2] exerts similar pressure on Peru, the Fujimori government will be forced to make choices within the regional economic cooperation framework.

Variable 3: Stability of Peruvian Domestic Politics

The Fujimori government's ability to manage its foreign policy strategy will be significantly constrained by domestic political stability. The narrow margin of victory, with less than 50,000 votes, makes it difficult to secure a stable majority in Congress, and the possibility of renewed conflict between Congress and the executive branch, as seen in past Peruvian political patterns, cannot be ruled out [15][16]. In particular, the divided views within Peruvian society regarding Fujimorismo, when combined with human rights controversies during the implementation of hardline public security policies, could trigger a political crisis. The more unstable domestic politics become, the more likely the Fujimori government is to lose diplomatic autonomy and lean towards greater dependence on either the US or China.

Variable 4: Maintenance of Cohesion in Regional Right-Wing Solidarity

Whether the solidarity with regional right-wing leaders such as Kast (Chile), Milei (Argentina), and Noboa (Ecuador) can develop into substantive policy cooperation is also an important variable [14][16]. If this solidarity deepens beyond symbolic photo opportunities into institutional cooperation, the Trump administration's 'Shield of the Americas' initiative could evolve into a tangible multilateral security system. Conversely, if each country chooses to individually adjust its relationship with China based on its own economic interests, this solidarity may remain mere ideological rhetoric. The trend of Brazil's Lula government strengthening cooperation with China outside this solidarity framework [2] demonstrates the structural limitations of regional right-wing solidarity in defining the geopolitical direction of South America as a whole.