The Panamanian Supreme Court delivered a win for the Trump administration by canceling a key port contract related to the Panama Canal with a company tied to the Chinese government, according to a new report.
Axios noted that the lawsuit was introduced by the Panamanian government at the urging of the Trump administration and stemmed from an audit claiming that CK Hutchinson's management "shortchanged Panama by $1.3 billion."
A senior U.S. official celebrated the outcome, saying the ruling is "not just a huge win for Panama's taxpayers, it's a big win for America and certainly for President Trump." The official added that Danish shipping company Maersk is expected to temporarily manage the concessions until Panama puts it out to bid.
The push is part of the Trump administration's intention to take over the Panama Canal, or at least have control over it.
Trump has repeatedly criticized the 1977 treaties under which the United States transferred control of the canal to Panama in 1999, suggesting the U.S. should take it back.
He has also suggested that China's commercial activity in ports near the canal constitutes a threat, calling for U.S. re-engagement. The ruling is a win in that area.
Despite the backlash, CK Hutchison's exposure to the Chinese market is limited, with only 12% of its revenue coming from mainland China and Hong Kong. The majority of its business is based in Europe, North America, and Australia. However, China has previously taken action against companies caught in geopolitical disputes, including imposing trade restrictions and pressuring multinational firms over tariff-related costs.
Originally published on Latin Times
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