Thu Feb 05 06:59:02 UTC 2026: Headline: Panama Rejects China’s “Heavy Price” Threat Amid US-China Power Struggle Over Panama Canal

The Story:
Panama’s President Jose Raul Mulino has publicly rebuffed China’s warning of “heavy prices” following the invalidation of a contract held by Hong Kong-based CK Hutchison to operate two ports on the Panama Canal. The Supreme Court of Panama deemed the contract “unconstitutional,” leading to the termination of CK Hutchison’s concession. This development occurred against the backdrop of escalating tensions between the United States and China, with former President Donald Trump having previously threatened to take control of the Panama Canal and demanded the cancellation of CK Hutchison’s contracts. Mulino asserted Panama’s commitment to the rule of law and an independent judiciary in response to Beijing’s criticism.

Key Points:

  • President Jose Raul Mulino rejected China’s threat of “heavy prices” after a Hong Kong company lost its port concession.
  • The concession, held by CK Hutchison since 1997, was deemed “unconstitutional” by Panama’s Supreme Court.
  • Former President Donald Trump had previously threatened to seize the Panama Canal and demanded the cancellation of CK Hutchison’s contracts.
  • China’s Hong Kong and Macao Affairs Office (HKMAO) called the court’s decision “absurd” and “shameful.”
  • Danish shipping company Maersk has temporarily taken over management of the port terminals.

Critical Analysis:

This situation exemplifies the intensifying geopolitical rivalry between the United States and China for influence in Latin America. The primary article, paired with the contextual article from February 5, 2026, highlighting “Taiwan-U.S. ties are ‘rock solid’,” reveals a pattern of US support for countries standing up to Chinese pressure. The US is actively working to contain China’s expansion of influence across multiple fronts, with trade and infrastructure playing key roles.

Key Takeaways:

  • The Panama Canal has become a focal point in the US-China power struggle.
  • Panama is asserting its sovereignty and commitment to its legal processes.
  • The US is actively countering Chinese influence in Latin America.
  • China is willing to exert economic and political pressure to protect its interests.
  • The dynamics of global trade routes will be strongly impacted in the future.

Impact Analysis:

This event series has significant long-term implications for international trade, US-China relations, and the sovereignty of smaller nations navigating the competition between global superpowers. Panama’s actions and the US backing will likely embolden other countries to scrutinize Chinese investments and contracts. The incident could also lead to increased tensions between the US and China. China may seek to develop alternative trade routes or partnerships to circumvent the Panama Canal, potentially impacting the canal’s future economic viability and Panama’s geopolitical importance. The Panama Canal Authority and the Panamanian government must make smart decisions to ensure the vitality of the economy.

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