The Tribune

with CHARLIE HARPER

IT seemed to be business as usual earlier this week at the bustling port of Balboa, the larger of two huge facilities that guard the Pacific Ocean entrance to the mighty Panama Canal. Giant cranes filled the clear blue sky, looming over many thousands of the familiar metal container boxes that have become the world’s maritime stock in trade.

Many of these durable containers were emblazoned with the names of some of the world’s largest, most influential shippers: China’s Cosco, Taiwan’s Evergreen, and Denmark’s Maersk. But even as this latter seemed to be part of a normal port tableau, Maersk was at the centre of a very recent, major seismic shift at the Panama Canal’s container ports that might portend future developments for us here in The Bahamas.

This is a story that has its recent roots in a visit to the Panama Canal by US Secretary of State Marco Rubio at the beginning of February 2025. The visit was part of Rubio’s first official trip as Secretary of State. The canal authority proudly issued a press release on the visit, part of which summarised as below the symbiosis of the canal and the US economy:

“The Panama Canal is a significant driver of the commercial relationship between the United States and Panama. In 2024, 52% of transits through the canal had ports of origin or destination in the United States. Additionally, more than 76% of the cargo that transited the canal had the United States as its origin or destination, and more than three-quarters of this cargo used the Neopanamax lock.” This Neopanamax lock was part of a major upgrade of canal locks undertaken by Panama around a decade ago.

Rubio’s own in-house State Department magazine described his visit thus:

The visit “underscored the importance of increased US attention on the Western Hemisphere to make America safer, stronger, and more prosperous. Rubio’s first stop was Panama, where he advanced an ‘America First’ foreign policy objective to counter pervasive, malign Chinese Communist Party (CCP) influence in the region; curb illegal migration; and promote clean American liquefied natural gas (LNG) exports.”

The State Department’s magazine further commented on Chinese influence. “In his first meeting of the visit, Rubio conveyed to (Panamanian president) Mulino the US position that the CCP’s influence and control over the Panama Canal represented a violation of the Canal Neutrality Treaty (between the US and Panama) and encouraged Panama to take immediate action to address US concerns related to China-based companies in the Panama Canal area.”

That all took place slightly over one year ago, as the second Trump administration was just getting started. Now, within just the past couple of weeks, we have seen the result.

At the end of last month, according to several news reports, Panama took control of two ports at the Atlantic and Pacific entrances of the Panama Canal after a Panamanian Supreme Court ruling voided Panama’s management agreement with the Hong Kong-based port operator CK Hutchinson, a move Washington officials said was “in line with President Donald Trump’s drive to curb Chinese influence” over the strategic waterway.

There are rumours circulating among some Panamanians closely involved with canal operations that for several years Hutchinson had failed to make payments to the government of Panama that had been specified in the port management agreement.

In any case, the formal publication of the court’s January decision declaring unconstitutional the law approving the concession held by Panama Ports Company, a subsidiary of Hong Kong conglomerate CK Hutchison, effectively ended the Chinese firm’s involvement in Panamanian canal port management.

Maersk has provisionally taken over a leading role in port management along the Panama Canal, essentially replacing the Chinese firm. The Chinese government is very unhappy, and has vowed to “investigate” the matter further.

The US and China have both played outsized roles in Panama for almost two centuries, so the collision of their interests in this isthmus nation comes as no particular surprise. In 1850, in response to the California gold rush, thousands of Chinese laborers arrived in Panama to help construct a nation connecting Panama’s Caribbean and Pacific coasts. Evidence of a residual Chinese community is still found in Panama City’s Chinatown in the capital’s oldest district. A stone memorial near the bridge of the Americas near Panama City celebrated the long Chinese presence in Panama until it was demolished by local authorities under mysterious circumstances at the end of December.

The US role has been much more substantial. Taking over a flawed French canal project at the turn of the last century, American engineers managed to complete the Panama Canal and establish a Canal Zone of American military control on both sides of the canal, until finally completing its return to Panamanian control in 1999. US president Jimmy Carter had signed a treaty with Panama establishing a phased turnover timetable 25 years earlier.

The Canal Zone era is regarded by Panamanians today as a mixed blessing, with the many capital improvements and responsible land management by the Americans besmirched by the standoffish superiority many of the US military garrison apparently exhibited toward Panamanians, who--except for those who served the American military mission--were generally not permitted inside the zone.

Today, the US and China are by far the biggest users of the canal. And until the past month, the Chinese had made significant management inroads in Panama. In 1997, in preparation for the anticipated US handoff of the canal to them, the Panamanians negotiated a canal port management contract with CK Hutchinson holdings of Hong Kong. This contract was reportedly agreed in advance of another famous 1997 handover – that of Hong Kong by the British to China. 

This agreement remained in effect for 20 years, after which it was reportedly extended indefinitely by the Panamanian government in 2017 without competing bids. At that time, Panama also became a signatory to the expansive Chinese Belt and Road initiative. According to the Seatrade Maritime News, in November 2017 Panama and China signed a bilateral Agreement on Maritime Transport that included Panama in the list of co-operative nations and promoted the competitiveness of its ship’s registry. 

CK Hutchinson remained a significant port manager along the Panama Canal until about three weeks ago. The Chinese company told Aljazeera news that “the unlawful takeover reflects the culmination of a campaign by the Panamanian state against its subsidiary, Panama Ports, following the Panamanian Supreme Court ruling in January 2026.”

The Chinese government has further turned up the heat, saying the country would “suffer the consequences” of the ruling, which would “cause profound damage” to Panama’s business environment and economic development.

There is certainly the appearance of US pressure in all of the events detailed above leading to the expulsion of the Chinese port management firm from the Panama Canal.

The well-respected US Center for Strategic and International Studies recently identified five additional Chinese-run port facilities that may well now come under increased American scrutiny for reasons similar to those enunciated by Trump and Rubio when discussing the previous management regime in Panama. Four of these ports are in Mexico.

The fifth is in Freeport.

There are indeed some similarities between the Panamanian and Bahamian experiences with Chinese port development and management. CK Hutchinson and Hutchinson Whampoa, which developed the container port at Freeport and took over management of the facility in 1997, merged their operations in 2015. The same company thus managed both Freeport and the Canal ports.

All of this increased focus on Chinese port management near the US has come at a time when Prime Minister Davis, citing a recent ruling by the court of arbitration, is asserting increased Bahamian authority over Freeport and its port operations.

At a town hall meeting this week in Grand Bahama, the PM said “the arbitration tribunal ruled that the Government’s legislative and regulatory authority applies across Freeport, effectively closing long-running disputes over governance. For decades, the Grand Bahama Port Authority has made claims of exclusive authority. That argument is gone,” he said. “An independent panel said, on the record, that the Government governs. The Port Authority retains its operational and administrative role, but it operates within Bahamian law, not above it.”

Trump and the US are obviously distracted right now with the expanding war with Iran. But port-related developments in Freeport will bear watching.