Trump’s Pressure Pays Off: Panama Ends China’s Grip on Canal

Paul Riverbank, 1/31/2026Panama rejects Chinese canal control, sparking global pushback and debate on managing China’s rise.

Panama’s relationship with China serves as a stark example of this changing tide. For decades, Chinese firms—most prominently CK Hutchison, operating out of Hong Kong—controlled prime territory on both ends of the Panama Canal, at Balboa and Cristóbal. The 2017 Belt and Road agreement drew the two countries even closer, raising eyebrows in Washington but proceeding nonetheless. That era ended with remarkable abruptness: on February 3, 2025, Panama’s government said goodbye to the Belt and Road Initiative, a decision likely nudged along by sustained pressure from the Trump administration. Soon after, Panama’s Supreme Court declared the longstanding Chinese port leases unconstitutional—a decision that stunned investors and sent the existing business arrangements tumbling.

The exit wasn’t exactly orderly. There were offers and counteroffers. BlackRock—a heavyweight in American finance—stepped in, ready to spend more than $22 billion to take over the strategic leases. Predictably, Chinese interests tried to hold their ground. Ultimately, the emergency solution came from Europe: APM Terminals, based in the Netherlands, got the nod to run things for now, while Panama ponders its next move. The country’s president was blunt: Panama’s ports, for now at least, would no longer be up for foreign control.

None of this played out in a vacuum. There’s a case to be made that America’s own recalibrated approach helped set this in motion. One partisan commentator—writing for RedState—argued that President Trump’s actions are a sign the US can still throw its weight around if it chooses to lead rather than settle for gradual decline. What we know for certain is this: Washington has been drawing clearer lines in the sand, encouraging allies to weigh their loyalties carefully.

A similar drama unfolded thousands of miles away in Australia. Ever since the Port of Darwin was leased to China’s Shandong Landbridge Group in a 99-year deal, it’s been a political sore spot. That anxiety only deepened as Chinese naval vessels began to make their presence felt in waters around Australia earlier this year. Politicians from both sides of the aisle braced for confrontation, moving to shut down the decades-long lease—despite stern warnings from Beijing. China’s ambassador issued a not-so-veiled threat: any drastic action over Darwin’s port “obliges us to take measures to protect the Chinese company’s interest.” The unease in Canberra is palpable, and the world is watching to see whether Australia blinks.

Not every government is on guard. The UK, as is often the case, played a different hand. Rather than drawing lines, British officials have adopted what they call “clear-eyed engagement.” The Prime Minister’s recent visit to China led to an enthusiastic government statement spotlighting new export and investment wins worth billions. There were immediate deliverables: steep reductions in whisky tariffs, fresh opportunities in green tech, car manufacturing, and the creative sector. With China now the UK’s third-largest trading partner—supporting close to 370,000 British jobs—the pressure is on to keep the relationship balanced: pursue the economic upside, but not at the expense of national security.

Of course, beneath all these headline moves lies the simple fact that global trade with China remains robust. Take energy: China’s hunger for liquefied natural gas rebounded sharply after a sluggish 2025. According to data tracked by Kpler, China bought nearly 7 million tons in January alone, up 15% year-on-year. In typical fashion, hard numbers are contentious—Chinese customs often report higher-than-expected import figures compared to Western trackers. Some analysts chalk this up to the “shadow fleet,” with vessels whose cargoes are missed by standard shipping data.

Meanwhile, across Europe, natural gas supplies are tight as winter deepens and storage runs low. It’s a scramble, and every major player—Washington, Beijing, Brussels—is seeking any advantage it can muster.

Zooming out, it’s clear China spent much of the last decade constructing a global network of ports, pipelines, and dependencies. The goals were rarely disguised. Now, the blowback in places like Panama and Australia underscores a hard lesson: countries will tolerate a certain amount of outside influence, but not if it starts to feel threatening. The UK’s maneuvering, by contrast, suggests there are still rewards in engagement—proof, Britain insists, that one doesn’t have to choose sides in every trade spat.

The world is at a crossroads. Some policymakers still believe mutual reliance in trade and investment can smooth over deeper tensions. Others are convinced that only firm boundaries will protect national interests. Which strategy prevails in the years ahead remains to be seen. If one theme echoes through all these stories, it’s that governments are wide awake to the risks and rewards of dealing with China—and far less willing to give a free pass than they once were.

For years, Beijing moved across continents with a quiet confidence, stitching its influence through a tapestry of port rights, infrastructure projects, and hefty checks. But recently, the current has begun to shift. The last few months, particularly in Panama and Australia, have seen China’s ambitions running into something sturdier than expected—national self-interest and local pushback.Panama’s relationship with China serves as a stark example of this changing tide. For decades, Chinese firms—most prominently CK Hutchison, operating out of Hong Kong—controlled prime territory on both ends of the Panama Canal, at Balboa and Cristóbal. The 2017 Belt and Road agreement drew the two countries even closer, raising eyebrows in Washington but proceeding nonetheless. That era ended with remarkable abruptness: on February 3, 2025, Panama’s government said goodbye to the Belt and Road Initiative, a decision likely nudged along by sustained pressure from the Trump administration. Soon after, Panama’s Supreme Court declared the longstanding Chinese port leases unconstitutional—a decision that stunned investors and sent the existing business arrangements tumbling.The exit wasn’t exactly orderly. There were offers and counteroffers. BlackRock—a heavyweight in American finance—stepped in, ready to spend more than $22 billion to take over the strategic leases. Predictably, Chinese interests tried to hold their ground. Ultimately, the emergency solution came from Europe: APM Terminals, based in the Netherlands, got the nod to run things for now, while Panama ponders its next move. The country’s president was blunt: Panama’s ports, for now at least, would no longer be up for foreign control.None of this played out in a vacuum. There’s a case to be made that America’s own recalibrated approach helped set this in motion. One partisan commentator—writing for RedState—argued that President Trump’s actions are a sign the US can still throw its weight around if it chooses to lead rather than settle for gradual decline. What we know for certain is this: Washington has been drawing clearer lines in the sand, encouraging allies to weigh their loyalties carefully.A similar drama unfolded thousands of miles away in Australia. Ever since the Port of Darwin was leased to China’s Shandong Landbridge Group in a 99-year deal, it’s been a political sore spot. That anxiety only deepened as Chinese naval vessels began to make their presence felt in waters around Australia earlier this year. Politicians from both sides of the aisle braced for confrontation, moving to shut down the decades-long lease—despite stern warnings from Beijing. China’s ambassador issued a not-so-veiled threat: any drastic action over Darwin’s port “obliges us to take measures to protect the Chinese company’s interest.” The unease in Canberra is palpable, and the world is watching to see whether Australia blinks.Not every government is on guard. The UK, as is often the case, played a different hand. Rather than drawing lines, British officials have adopted what they call “clear-eyed engagement.” The Prime Minister’s recent visit to China led to an enthusiastic government statement spotlighting new export and investment wins worth billions. There were immediate deliverables: steep reductions in whisky tariffs, fresh opportunities in green tech, car manufacturing, and the creative sector. With China now the UK’s third-largest trading partner—supporting close to 370,000 British jobs—the pressure is on to keep the relationship balanced: pursue the economic upside, but not at the expense of national security.Of course, beneath all these headline moves lies the simple fact that global trade with China remains robust. Take energy: China’s hunger for liquefied natural gas rebounded sharply after a sluggish 2025. According to data tracked by Kpler, China bought nearly 7 million tons in January alone, up 15% year-on-year. In typical fashion, hard numbers are contentious—Chinese customs often report higher-than-expected import figures compared to Western trackers. Some analysts chalk this up to the “shadow fleet,” with vessels whose cargoes are missed by standard shipping data.Meanwhile, across Europe, natural gas supplies are tight as winter deepens and storage runs low. It’s a scramble, and every major player—Washington, Beijing, Brussels—is seeking any advantage it can muster.Zooming out, it’s clear China spent much of the last decade constructing a global network of ports, pipelines, and dependencies. The goals were rarely disguised. Now, the blowback in places like Panama and Australia underscores a hard lesson: countries will tolerate a certain amount of outside influence, but not if it starts to feel threatening. The UK’s maneuvering, by contrast, suggests there are still rewards in engagement—proof, Britain insists, that one doesn’t have to choose sides in every trade spat.The world is at a crossroads. Some policymakers still believe mutual reliance in trade and investment can smooth over deeper tensions. Others are convinced that only firm boundaries will protect national interests. Which strategy prevails in the years ahead remains to be seen. If one theme echoes through all these stories, it’s that governments are wide awake to the risks and rewards of dealing with China—and far less willing to give a free pass than they once were.