By: Staff Writer
May 1, 2026
The office of the United States Secretary of State in a statement issued on April 28, said Bolivia, Costa Rica, Guyana, Paraguay, Trinidad and Tobago, and the United States have joined in support of Panama, while criticising Chinese economic retaliation, after a Hong Kong-based conglomerate lost a legal dispute over the management of ports on the Panama Canal.
Panama’s Supreme Court in late January annulled contracts that had allowed a subsidiary of Hong Kong’s CK Hutchison to administer the Balboa and Cristobal port terminals on the Panama Canal after deeming the decades-old agreements unconstitutional.
The decision was not without consequences. According to reports, CK Hutchison promptly launched arbitration proceedings against both Panama and Maersk, seeking more than $2 billion in damages. Meanwhile, Beijing sharply criticized the removal of the Hong Kong-linked operator, describing the Panamanian Supreme Court’s ruling as “absurd” and “shameful,” in one media outlet. The dispute quickly spiralled beyond legal wrangling, morphing into a full-blown diplomatic confrontation between the world’s two largest economies.
This Panamanian Supreme Court decision was after US Defence Secretary Pete Hegseth visited the country in April, 2025 in aims to strengthen security ties, aiming to counter Chinese influence and protect the Panama Canal. Hegseth emphasized joint military efforts, including increased patrols and training, to ensure the waterway remains secure and open, following Panama’s decision to leave China’s Belt and Road Initiative.
China detained nearly 70 Panamanian-flagged ships in March, according to the US Federal Maritime Commission, a number “far exceeding historical norms”.
“These actions – following the decision of Panama’s independent Supreme Court regarding the Balboa and Cristobal terminals – are a blatant attempt to politicise maritime trade and infringe on the sovereignty of the nations of our hemisphere,” the signatories said.
US Secretary of State Marco Rubio said separately on X that Washington was “deeply concerned” by China’s economic pressure on Panama.
“We stand in solidarity with Panama. Any attempts to undermine Panama’s sovereignty are a threat to us all,” he said.
China has previously accused the US of “bullying” and trying to smear its reputation in Latin America, while it described the Panamanian Supreme Court ruling as “absurd” and “shameful”.