In a win for the Trump administration, Panama's Supreme Court on Thursday canceled a crucial Panama Canal ports contract operated by a firm with ties to China's government.
- Axios exclusively reported earlier that the White House expected the ruling Thursday evening to cancel the contract.
Why it matters: Removing Chinese influence in the Western Hemisphere is central to President Trump's strategy to reassert unquestioned U.S. dominance from the Straits of Magellan to Greenland.
- The contracts for managing terminal operations at both ends of the Panama Canal, which was held by Hong Kong's CK Hutchison, help dictate a measure of control of all shipping between the Pacific and Atlantic oceans.
Zoom in: At issue in the lawsuit before the Panama Supreme Court was whether CK Hutchison breached the concession contracts, including one renewed in 2021, allegedly harming taxpayers and violating the country's constitution.
- The suit brought by Panama's government at the urging of the Trump administration stemmed from an audit that claimed CK Hutchison's management of the contracts shortchanged Panama by $1.3 billion.
- Danish shipping company Maersk is expected to temporarily manage the concessions contract until Panama puts it out to bid, a senior Trump administration official said.
What they're saying: "It's not just a huge win for Panama's taxpayers, it's a big win for America and certainly for President Trump," the official said.
- The official said a source with Panama's government had informed the ruling has majority if not unanimous support on the panel, and should be issued soon.
- A second source said the administration expects a favorable ruling, "but we will believe it when we see it. Hedging is good in this hemisphere."
Zoom out: The administration's aggressive involvement in Panama is the another big domino in Trump's Western Hemisphere plan this year. The U.S. military snatched Venezuelan leader Nicolas Maduro on Jan. 3 and took him to New York City to face federal drug trafficking charges.
- A month before, Trump hailed the 202nd anniversary of the Monroe Doctrine and drew attention to a "Trump Corollary" — his interventionist policy for the hemisphere.
- Maduro's capture came on the 36th anniversary of the U.S. arrest of Panamanian strongman Manuel Noriega, who also had been indicted for drug trafficking.
- In both cases, the U.S. geopolitical interests far exceeded the drug charges that were the pretexts for the military actions.
Catch up quick: A month before taking office in 2025, Trump said he would "demand that the Panama Canal be returned to us, in full, quickly and without question," if U.S. interests were not furthered.
- China's totalitarian government, and therefore its military, controls businesses based in Hong Kong, according to Trump and Secretary of State Marco Rubio, who made the Panama Canal and CK Hutchison contracts a top issue for the administration.
The timeline: The Panama Canal concessions contracts had a complicated history after the Trump administration targeted the deal.
- Almost a year ago, on Jan. 31, 2025, Rubio went to Panama on his first foreign trip as secretary and raised the issue of ports control.
- Under U.S. pressure, CK Hutcheson agreed to sell the Panama Canal contract to the American investment firm BlackRock as part of a $22.8 billion deal, which Trump praised in March.
Four months later, in July, BlackRock announced it would add as a "major strategic investor" — understood to be the Chinese shipping firm Cosco — a move that Trump administration officials said was untenable.
- On July 30, two days after BlackRock's Cosco announcement, Panama's comptroller sued to cancel the Hutcheson contracts. The deal has been stuck in limbo, and would seem to be dead if Panama's court deems Hutchison an untenable seller.
- BlackRock did not respond to a request for comment.
This story has been updated with the court's decision.
