China Is Already Pushing Back Against Trump in Panama and Latin America

Via World Politics Review, a report on how China is pushing back against the U.S. in Panama and Latin America:

This week, a consortium of U.S. companies led by Blackrock was supposed to complete the purchase of two ports in Panama from CK Hutchison, a Chinese firm based in Hong Kong. U.S. President Donald Trump pointed to the sale as a foreign policy success during his recent State of the Union speech to Congress, claiming it demonstrated that his threats about seizing the Panama Canal had already helped reduce Chinese influence. However, as of late last week, the sale is now on hold. The official explanation from the participants is that the port transfer is a complex transaction that requires more time. The real explanation is that the question of port control is at the center of a geopolitical clash in the hemisphere.

I ended last week’s column on Secretary of State Marco Rubio’s trip to the Caribbean by noting that, if the U.S. only brings threats to its diplomacy with the Caribbean, it will “provide an opening that Beijing will be all too eager to seize.” This idea that China will gain as the U.S. withdraws aid and bullies its allies worldwide has admittedly become a piece of conventional wisdom seen regularly in foreign policy commentary since Trump returned to the White House.

Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies, recently countered that line of analysis with regard to Latin America, arguing that China is unlikely to improve its position despite the Trump administration’s attitude in the region. Berg provides four reasons to support his smart contrarian take: China’s own economic challenges at home, which limit its potential to exploit Trump’s errors; clear U.S. redlines from the Trump administration, which will deter China from trying to do so; private sector investments from U.S. companies, which can offset some of the reduction of U.S. government assistance; and the preferences of Latin American governments, which may move them away from China as an alternative to the U.S. toward partners such as Europe or other Asian countries. Left unstated is the scenario in which China, given its own constraints, may prefer to lean into Trump’s views on spheres of influence and retreat from the Western Hemisphere in order to shore up its influence in its own neighborhood.

Berg may very well be correct about China’s long-term challenges in the Western Hemisphere. In the meantime, however, the temporarily scuttled port deal in Panama demonstrates that Beijing’s short-term response to Trump’s coercion is to push back.

After the announcement of the sale of the port concessions at the two ends of the canal, Ta Kung Pao—a pro-Beijing media outlet in Hong Kong—criticized the deal. China’s government then amplified Ta Kung Pao’s article on social media, suggesting official approval for the critical position he expressed. The article specifically cited the concern that the U.S. could use greater control of the canal to block Chinese vessels and products from passing through it, a clear violation of the neutrality agreements that currently govern the canal’s operation. Trump has cited that same concern over how China might use its control of the ports to disrupt the canal in a conflict situation, and China appears worried that Trump is projecting about how Washington would likely use the canal if a conflict occurs. The column encouraged the owner of CK Hutchison to “think twice” about the sale.


China’s rhetoric and actions across Latin America reflect those of a country that is not voluntarily backing down in the face of Trump’s threats.


Since that article’s publication, the tone of China’s rhetoric on the deal has gotten sharper. A note from Chinese state media, which was published this weekend but subsequently taken down, compared the deal to “handing a knife to an opponent.” According to CNN, China’s anti-trust regulators are now officially investigating CK Hutchison and may attempt to block the company from selling its stake in the ports. Notably, Ta Kung Pao escalated its criticisms of the deal today.

Outside of Panama, China is also aggressively pushing back on the Trump administration’s agenda in the Western Hemisphere. In a statement at the National People’s Congress earlier this month, Foreign Minister Wang Yi said, “Latin American nations aspire to independence and autonomy, not the Monroe Doctrine.” Last week, China’s ambassador to Colombia also referenced the 19th-century doctrine, stating, “In 2025, the U.S. threatens Latin America, raising its big stick once again.” These comments suggest that wolf warrior diplomacy is making a comeback in Chinese foreign policy, at least as it pertains to its efforts to exploit the openings offered by the Trump administration.

Beyond the rhetoric, China has offered Cuba debt relief to compensate for renewed U.S. sanctions. It has increased oil purchases from Caracas in the past month, amid signs that the Trump administration will impose further restrictions on Venezuela’s energy sector. Chinese companies signed new lithium deals in the Southern Cone and have expanded their strategic commodities purchases from South America as part of competing against Trump’s tariffs and trade wars. The Chinese-run port of Chancay in Peru continues operating, even as Chinese mining firms try to solidify their copper mining operations in that country. And in Argentina, President Javier Milei continues to work with Beijing as a trade and finance partner despite his anti-China rhetoric as a candidate in 2023, because China can provide additional liquidity that Milei will need as he tries to remove currency controls from the country’s volatile peso. All these actions by China reflect those of a country that is not voluntarily backing down in the face of Trump’s threats.

Back in Panama, China’s attempt to block the transfer of port ownership is not likely to succeed, and the sale will likely go forward at some point soon. The government of Panama had been auditing the ports and quietly pushing some sort of ownership transfer even before Trump was elected. But even a small delay could play to Beijing’s advantage, depending on how Trump and his team react to that it.

Several weeks ago, NBC reported that Trump has asked the U.S. military to put together “credible military options” to ensure access to the canal that range from cooperation with Panamanian authorities to an invasion to seize and hold the canal with military force. Secretary of Defense Pete Hegseth is scheduled to visit the canal zone in early April. Panamanian President Jose Raul Mulino wants to work with the Trump administration, but these kinds of hostile threats and rhetoric regarding the canal don’t sit well with his political ideology, in which national pride and sovereignty figure prominently, and won’t be tolerated by the Panamanian people. Mulino needs the public’s support to advance his economic agenda, including implementation of a recent social security reform and the potential reopening of a controversial copper mine. So every time Trump administration officials open their mouths to talk about the canal, they limit his ability to work with them.

Since returning as U.S. president, Trump has espoused an expansionist ideology that seeks to increase the territory of the United States, including the Panama Canal. He also wants to combat China’s influence in the Western Hemisphere. In Panama, those two goals are clashing. China is waiting there and elsewhere in the hemisphere to make gains wherever the Trump administration gives them an opening. It’s possible that China’s own constraints and Latin America’s preferences may hold Beijing back in the future. But at least this month, China isn’t acting like it.



This entry was posted on Monday, March 31st, 2025 at 5:32 pm and is filed under China, Panama.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.


ABOUT
WILDCATS AND BLACK SHEEP
Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.