The announcement of an agreement to build a Pacific-Atlantic rail link across South America is important to global commerce. If it actually succeeds, it would allow many goods to skip the Panama Canal in transit from Brazil to the Far East, including China.
The idea seems to be a combined intermodal and bulk rail line from the East Coast of Brazil to Chancay Port in Peru.
China of course imports bulk grain and oilseed cargoes from Brazil. Brazil also is home to some manufacturing which might be cheaper than Chinese manufacturing has become. And Brazil consumes many manufactured goods now as the country develops. China is an ideal source for these.
It’s called the “Two-Ocean Railway”. It should cut the China-Brazil trip to 10 days.
China is already investing $1.3B in Chancay Port in Peru. This railway will create guaranteed demand for the port’s capabilities.
In the light of President Trump’s tariff machinations and his threats surrounding the Panama Canal, it’s wise for the Chinese to create an alternative.
Brazil and China are an ideal trading pair to show comparative advantage at work; each nation produces what it’s best at, and trades for the other goods. The result produces lower costs for both parties, even including transport costs.
Katherine Si, China Correspondent July 15, 2025
Supply Chain and Logistics 