Draft

March 1, 2026

Panama Canal the Latest Ping-Pong of U.S.-China Rivalry

Panama Ports Co., a subsidiary of Hong Kong-based CK Hutchison, gained the operational authority of running two key ports on either end of the Panama Canal in 1997. The Balboa Port on the Pacific side and the Cristobal Port on the Atlantic side employ about 7,000 workers and play a vital economic and international security roles. President Donald Trump during his 2024 Presidential campaign has repeatedly alluded to the 25-year contract renewal signed in 2021 favoring the PPC, implying that the flow of U.S. commodities, commerce and military ware would be impeded by China although the operation of Panama Canal is under the jurisdiction of a separate, autonomous entity: Panama Canal Authority. The U.S.-built canal was handed over to the Panamanians in 1999. 

The day Trump returned to power in Washington D.C., January 20, 2025, Panama's Comptroller's Office opened the concession granted to PPC. Two weeks later, U.S. State Secretary Marco Rubio visited Panama, lecturing the officials there that Chinese operation of Panama Canal won't be supported by Trump administration that put indirect pressure on Panamanian authorities. 

On July 30, 2025, Panama's Comptroller said that he was filing a suit in the nation's supreme court to find the concessions accorded to Panama Ports Co. unconstitutional. In January 2026, Panama Supreme Court determined the concessions unconstitutional, a ruling that invited a prompt criticism from the Beijing office handling the Hong Kong's affairs that said of apex court's ruling as the result of "hegemonic pressure". Panamanian President Jose Raul Mulino responded on February 26, 2026, cautioning Beijing to "be careful".

On February 26, 2026, Panamanian authorities seized documents from PPC offices and assumed the operational control of Balboa Port and Cristobal Port.