A major setback for China's influence in the Western Hemisphere, this time in Panama.
The country's Supreme Court has ended a contract allowing a Hong Kong-based company
to operate key ports in Panama Canal.
The ruling on Thursday comes after mounting pressure and growing U.S. security concerns.
Panama's Supreme Court ruled that the decades-long contract with C.K. Hutchison
is unconstitutional. As a result, the Chinese company will be forced to stop
operating the canal ports. It's a major win for President Trump,
who argued that China's growing footprints around the canal poses a national security threat.
He warned that China's growing influence over its ports could let Beijing block or
pressure U.S. military operations and trade ships in a crisis.
Panama's president says the country plans to keep the ports running with a temporary operator
before launching a new bidding process with revised terms.
Since C.K. Hutchison took over in the late 1990s,
Panama has lost more than $1.3 billion in revenue. That's according to a government audit.
The ruling also comes amid U.S.-China tensions over port dominance.
Last year, the Chinese company agreed to sell dozens of ports worldwide.
A business association led by U.S.-based BlackRock and Mediterranean Shipping
intended to buy them for about $23 billion.
China pushed back on the deal, aiming to maintain control over the ports.
Despite China's presence in the region, the U.S. remains Panama's top investor and trading partner.
Notably, Panama pulled out of China's Belt and Road Initiative last year,
signaling a shift back toward Washington.