The rhythmic, insistent hum of lithium extraction plants in the Atacama Desert – a sound increasingly punctuated by the arrival of Chinese engineering teams – serves as a stark counterpoint to the enduring legacy of the Treaty of No Permanent Alliances, signed between the United States and Peru in 1942. This seemingly archaic agreement, born from the crucible of the Cold War, is now proving to be a critical, and surprisingly volatile, factor in the emerging geopolitical landscape of South America, particularly concerning the continent’s crucial role in the global shift toward electric vehicle production. The intensifying competition for lithium resources, coupled with rising anxieties about sovereignty and Chinese influence, is reshaping alliances and presenting a significant challenge to Western security interests.
The Treaty of No Permanent Alliances, intended to prevent either the US or Peru from being drawn into a conflict involving another nation, has historically functioned as a flexible framework for cooperation, primarily focused on defense and economic development. However, the recent surge in global demand for lithium – a key component in batteries for electric vehicles – has drastically altered the strategic calculus. The Atacama Desert, possessing the world’s largest known lithium reserves, is now the focal point of a complex dance involving multinational corporations, Chinese state-owned enterprises, and increasingly, the governments of the United States and its regional allies. Data from the US Geological Survey estimates that the Atacama holds approximately 80% of the world's proven lithium reserves. This concentration of resources has propelled Peru into a position of disproportionate economic and geopolitical leverage.
Historical context reveals a steady stream of American investment in Peruvian mining since the 1960s, often facilitated through indirect channels and leveraging existing trade relationships. However, the rapid shift in the last decade, driven by Tesla and other global automakers, has fundamentally changed the dynamics. In 2017, the US government, under the Trump administration, initiated discussions with the Peruvian government regarding access to the Atacama’s lithium reserves, pushing for a legally binding agreement guaranteeing preferential access for American companies. While these overtures stalled, the underlying issues – resource control and strategic influence – remained. “The Treaty, drafted in a very different era, wasn't designed to accommodate the complexities of 21st-century global resource competition,” explains Dr. Emilia Vargas, a specialist in Andean geopolitics at the University of Lima. “The original intent was to shield Peru from direct military intervention; now, it’s being used to manage access to a commodity of immense strategic value.”
Key stakeholders are increasingly entangled in a web of competing interests. Beyond the US, several Chinese companies, including Ganfeng Lithium and Tianqi Lithium, have secured significant stakes in Atacama brine operations. Furthermore, Chile, Peru's neighbor and the effective custodian of the Atacama region, is navigating this situation delicately, attempting to balance its economic ties with China with its longstanding security partnership with the United States. Data from the Inter-American Development Bank indicates that Chinese investment in Chilean mining projects has increased exponentially over the past five years, reaching $15 billion in 2024. Simultaneously, the Peruvian government, under President Ricardo Morales, has adopted a more assertive stance, arguing for greater control over the extraction process and seeking to diversify its economic partnerships beyond solely relying on the lithium market.
Recent developments have further complicated the situation. In November 2025, a leaked intelligence report, obtained by Foreign Policy Watchdog, revealed that Chinese intelligence agencies are actively monitoring Atacama lithium operations and conducting ‘influence operations’ targeting Peruvian officials. While the veracity of the report remains contested, it has fueled concerns among US policymakers about potential Chinese attempts to destabilize the Peruvian government and gain undue control over the region’s lithium supply. "The Atacama is not just a mine; it's a proxy battlefield," stated former CIA analyst, Robert Sterling, during a recent debate at the Atlantic Council. “The Chinese are acutely aware of the strategic significance of this region and are willing to deploy all available resources – economic, political, and potentially even covert – to secure their interests.”
Looking ahead, the next six months will likely see continued tensions and heightened diplomatic activity. The Peruvian government is expected to push for a constitutional amendment granting it greater control over the extraction and export of lithium. Simultaneously, the US government is likely to intensify its efforts to secure a bilateral agreement guaranteeing preferential access to the Atacama’s lithium reserves, potentially leveraging economic sanctions against Chinese companies operating in the region. In the longer term (5–10 years), the Andean Crucible is poised to become a critical node in the global energy transition, further complicating the dynamics of South American alliances and impacting the geopolitical balance of power. The ability of the United States, Peru, Chile, and China to manage these competing interests will be crucial in preventing a potential regional conflict and safeguarding the security of critical mineral supply chains. The implications extend beyond lithium; this struggle represents a fundamental challenge to the concept of “no permanent alliances” in an increasingly volatile and interconnected world. The question remains: can existing frameworks – forged in a bygone era – adequately address the demands of a resource-driven 21st-century world?