China’s retaliation against Panama has backfires across Latin America

China’s acts of commercial harassment against Panama have sparked indignation across Latin America. This could even spur a rapprochement with Taiwan.

Beijing has a long track record of debt traps and commercial threats and reprisals against nations that choose to exercise their sovereignty — in other words, a new silk rope.

The communist power has intensified arbitrary detentions of Panama-flagged vessels under the pretext of conducting routine inspections. This measure was implemented after a Panamanian court granted the Central American nation control over the ports of Cristóbal and Balboa — facilities at either end of the Panama Canal, previously operated by the Hong Kong-based company CK Hutchison.

Secretary of State Marco Rubio has condemned Beijing’s retaliation, stating it “destabilizes supply chains, raises costs, and erodes confidence in the global trading system. … The United States stands with Panama against any retaliatory actions against its sovereignty and will always support our partners in the face of bullying.”

This is not the first time China has responded to a setback with intimidation. Let us not forget that, just last year, the communist nation warned Mexico to “think twice before making any tariff adjustment” — a statement delivered without filters and with imperial arrogance.

On that occasion, Mexico announced that it would impose tariffs on 1,400 products originating from China, India, Turkey and other countries. The measure sought to protect Mexico’s domestic industries, boost consumer spending and preserve 325,000 jobs.

China also lied to the countries of the region right to their faces. During the latest summit of the Community of Latin American and Caribbean States, it said: “China will always be a good friend” to Latin America. But for Panama, it brought only threats and coercion.

China is a global superpower, and that is the harsh reality.  Even though its narrative says it is part of the Global South, in practice, it uses threats, pressure and violations of sovereignty against smaller, poorer, weaker countries. It has done this to impoverished African nations, and now it is repeating the pattern in Latin America.

In Ecuador, China has implemented a debt-trap model. The Coca Codo Sinclair hydroelectric plant stands as a textbook example of authoritarianism and failed projects, characterized by a complete lack of project oversight and the plundering of sovereign natural resources.

Beijing has also faced criticism for practices akin to modern-day slavery, both within and beyond its borders. According to international organizations such as End Slavery Now, repression and human rights abuses pose a significant challenge.

Brazilian President Luiz Inácio Lula da Silva has criticized what he calls “savage capitalism” and social injustices. But both Brazil and China are now facing scrutiny over business practices that resemble modern slavery within their automotive factories.

Disregard for sovereignty, blackmail and a complete lack of project oversight have become Beijing’s trademark. The U.S. Bureau of Western Hemisphere Affairs said on X: “cheap Chinese money costs sovereignty.” In Peru, China has consistently sought to secure control and preferential treatment regarding ports and mining projects. Peru could be powerless to oversee Chancay, one of its largest ports, which is under the jurisdiction of predatory Chinese owners.

In Guatemala, China’s commercial bullying has been brutal. Xi Jinping refuses to accept that this Central American nation maintains diplomatic relations with Taiwan. Trade blockades and barriers serve as the communist giant’s primary weapons.

In Nicaragua — a country ruled by the dictatorship of Daniel Ortega and his wife — China has devastated natural resources, polluted rivers, destroyed forests, encroached upon indigenous communities and wiped out rich ecosystems.

Latin America has finally awakened and is pulling back at China’s silk rope. Bolivia has imposed controls on China’s zinc mining operations. Chile has frozen a proposed submarine cable project. Honduras is seeking to restore diplomatic ties with Taiwan. Both Argentina and Peru have opted for U.S.-made F-16 fighter jets rather than purchasing Beijing’s JF-17s.

China’s erratic policies — combined with President Trump’s corollary to the Monroe Doctrine — are ushering in an unprecedented shift across the Americas. The best is yet to come.

Arturo McFields is an exiled journalist, former Nicaraguan ambassador to the Organization of American States, and a former member of the Norwegian Peace Corps. He is an alumnus of the National Defense University’s Security and Defense Seminar and the Harvard Leadership course.