The cancellation of a Chinese-linked ports contract at the Panama Canal is more than a legal decision by a national court. It is a geopolitical signal. With a ruling from Panama’s supreme court terminating a long-standing concession held by Hong Kong – based CK Hutchison, the Trump administration has secured a symbolic and strategic victory in its effort to reassert US dominance across the western hemisphere. Supporters are already calling it a defining moment for what Trump himself has labelled the “Donroe Doctrine” – an updated, interventionist interpretation of America’s historic claim to primacy in the region. At the heart of the case were contracts granting CK Hutchison control over terminal operations at both entrances to the Panama Canal, one of the most critical chokepoints in global trade. Roughly 5% of the world’s maritime commerce passes through the canal, linking the Pacific and Atlantic oceans. While Panama retains sovereignty over the waterway, the firms managing its ports exercise substantial influence over logistics, scheduling and commercial flows. For Washington, the presence of a company with ties to China’s government in such a position was increasingly viewed as intolerable.
The legal trigger was an audit commissioned by Panama’s government, which concluded that CK Hutchison had breached the terms of its concession agreements, allegedly costing Panamanian taxpayers around $1.3 billion and violating constitutional provisions. On that basis, the government filed suit to annul the contracts, a move encouraged – and closely monitored – by the Trump White House. When the supreme court ruled to cancel the concessions, administration officials wasted no time framing the outcome as a geopolitical triumph. “This is not just a huge win for Panama’s taxpayers,” one senior US official said, “it’s a big win for America and certainly for President Trump.” The ruling is expected to enjoy broad support among the judges, underlining how domestic legal arguments and external pressure converged in this case. Temporarily, the Danish shipping giant Maersk is expected to manage the terminal operations until Panama puts the concessions out to open bid.
The decision fits squarely into Trump’s broader hemispheric strategy. Since returning to office, he has pursued an aggressive posture aimed at pushing back against Chinese influence from the southern tip of South America to the Arctic. The administration’s actions in Panama echo other dramatic moves, including the capture of Venezuelan leader Nicolás Maduro earlier this year and his transfer to New York to face federal drug trafficking charges. In both cases, the legal justifications masked much larger strategic objectives. Trump himself has been explicit about his intentions. Before taking office in 2025, he warned that if US interests were not adequately protected, he would “demand that the Panama Canal be returned to us, in full, quickly and without question.” While the canal’s sovereignty was formally transferred to Panama in 1999, Trump and his allies argue that Chinese commercial control over key infrastructure amounts to a backdoor challenge to US security.
Secretary of state Marco Rubio has been one of the most vocal proponents of this view. On his first foreign trip after assuming office, Rubio travelled to Panama to raise concerns about the canal ports. He and Trump have repeatedly argued that under China’s political system, businesses based in Hong Kong cannot be considered independent of the Chinese Communist party or the People’s Liberation Army. From this perspective, CK Hutchison’s role was framed not as a commercial issue, but as a national security risk. The saga took several twists before reaching its conclusion. Under mounting US pressure, CK Hutchison agreed last year to sell its Panama Canal assets to the American investment firm BlackRock as part of a $22.8 billion deal, which Trump publicly praised. That arrangement appeared to satisfy Washington – until BlackRock announced plans to bring in the Chinese shipping giant Cosco as a “major strategic investor.” For the Trump administration, this was a red line. Officials made clear that replacing one Chinese-linked operator with another was unacceptable.
Within days of BlackRock’s announcement, Panama’s comptroller filed the lawsuit that ultimately led to the court’s ruling. Since then, the deal had been mired in uncertainty, and the supreme court’s decision now effectively kills it. BlackRock has declined to comment, but the message from Washington is unmistakable: Chinese participation in critical western hemispheric infrastructure will face sustained and coordinated resistance.
For Panama, the ruling is a delicate balancing act. On one hand, it reinforces national sovereignty and promises financial redress. On the other, it places the country firmly within Washington’s strategic orbit at a time of intensifying great-power competition. For China, it is a setback that illustrates the growing limits of its commercial diplomacy in regions traditionally regarded by the US as its sphere of influence. More broadly, the episode illustrates how Trump’s “Donroe Doctrine” is taking shape in practice. Like the original Monroe Doctrine, it asserts that external powers should not interfere in the Americas. Unlike its 19th-century predecessor, it relies less on formal declarations and more on legal pressure, economic leverage and selective displays of force. Drug charges, audits and contract disputes become tools of geopolitical contestation.
Supporters argue that the strategy restores clarity and deterrence to US policy, countering what they see as years of Chinese encroachment. Critics warn that it risks destabilising the region, undermining international norms and reducing complex economic relationships to zero-sum confrontations. Either way, the cancellation of the Panama Canal contract makes one thing clear: the western hemisphere is once again a central arena of great-power rivalry, and the Panama Canal remains not just a marvel of engineering, but a prize of global strategic significance.
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