Panama President defies Beijing’s threats over canal port evictions

WEB DESK: Panama’s President José Raúl Mulino has issued a sharp rebuttal to China after Beijing warned the Central American nation would pay a “heavy price” for evicting a Hong Kong-based company from two strategic ports on the Panama Canal.

The escalating row highlights the intensifying struggle between the United States and China for influence over one of the world’s most critical maritime trade routes.

The Conflict: Sovereignty vs. Investment

The dispute was triggered by a recent Panama Supreme Court ruling that invalidated a long-standing contract with CK Hutchison, a Hong Kong-based conglomerate. For nearly 30 years, the company had operated the ports of Cristobal (Atlantic side) and Balboa (Pacific side) through its subsidiary, the Panama Ports Company.

Following the court’s decision to declare the concession “unconstitutional,” the Chinese government’s Hong Kong and Macao Affairs Office (HKMAO) labeled the move “absurd” and “shameful.” Beijing warned that Panama would face severe political and economic consequences if it did not “correct its course.”

President Mulino’s Response

Writing on social media on Wednesday, President Mulino “strongly” rejected the threats. He emphasised that Panama is a sovereign nation governed by the rule of law and that its judiciary remains independent of the central government.

“Panama respects the decisions of the judiciary,” Mulino stated, pushing back against the notion that the government could or would overturn the court’s ruling to appease foreign powers.

The “Trump Factor”

The eviction follows months of intense pressure from US President Donald Trump, who has made the Panama Canal a key focus of his foreign policy. Last year, Trump threatened to seize the canal or take military action to ensure it remained under “friendly” control, citing the involvement of Chinese-linked companies as a national security risk. In response to these threats, Panama’s comptroller general reviewed the CK Hutchison contract and ultimately recommended its annulment, concluding that it ran counter to Panamanian interests.

Immediate Aftermath

In the wake of the ruling, the Panamanian government has appointed the Danish shipping giant Maersk to take over temporary management of the port terminals. A new bidding process for a permanent concession is expected to follow.

Meanwhile, China’s Foreign Ministry has accused the U.S. of harboring a “Cold War mentality” and using “ideological bias” to erode international law. Spokesman Lin Jian stated that China would “firmly defend” the rights of its companies.

Why It Matters

The Panama Canal is the lifeblood of global trade, and the removal of CK Hutchison marks a significant shift in the region’s geopolitical landscape. Panama’s recent exit from China’s Belt and Road Initiative further signals a pivot back toward Washington, even as President Mulino attempts to balance his country’s sovereignty against the demands of the world’s two largest superpowers.