Panama Canal Shows Cold War Playing Out in Slow Motion

 Op-Ed: The struggle over Panama is not a trade dispute. It is a pre-kinetic tug-of-war between Beijing and Washington.

The Panama Canal is one of the great arteries of the world economy, a narrow thread of water through which roughly five percent of global maritime trade passes each year. For three decades, the ports at each end of it — Balboa on the Pacific, Cristobal on the Atlantic — were operated by a subsidiary of CK Hutchison, the Hong Kong conglomerate controlled by the family of billionaire Li Ka-shing. That arrangement ended this year when Panama’s Supreme Court ruled it unconstitutional, the government physically seized the terminals, and Beijing erupted in fury, threatening that Panama would “pay a heavy price.”

What looked to casual observers like a commercial dispute over a port concession is, in fact, a chapter in a far larger and more dangerous story — the slow-motion cold war between Washington and Beijing for position, dominance, and leverage that could turn hot at any number of flashpoints, with Taiwan the most volatile of them.

In that context, the Panama Canal is not a secondary theatre. It is closer in strategic weight to the Cuban Missile Crisis than to a contract disagreement — a chokepoint whose control carries consequences that extend far beyond Central America. Few analysts have mapped that terrain as carefully as Matt Brazil.

A senior fellow at the Jamestown Foundation, former US Army officer, diplomat, and intelligence professional, Brazil co-authored with ex-Central Intelligence Agency counterintelligence analyst Peter Mattis the definitive English-language primer on Beijing’s espionage and influence architecture. His analysis of the Panama situation, published by the Jamestown Foundation, is essential reading for anyone who wants to understand what is actually at stake — and why the canal’s fate carries warnings far beyond Central America, including for Canada.

Brazil documents how Beijing’s penetration of Panama was never simply about ports. It was a multi-domain strategy. When Panama switched diplomatic recognition from Taiwan to Beijing in 2017, it became the first Latin American country to join the Belt and Road Initiative. What followed was a textbook influence operation: infrastructure investment, a $900 million port deal with the Shandong-based Landbridge Group, construction projects, a new cruise terminal, a convention center, and a fourth canal bridge now under construction.

Simultaneously, Beijing worked the softer registers — media penetration, academic relationships, law enforcement cooperation, diaspora organizations tied to the Communist Party’s United Front system advocating Beijing’s positions on Taiwan and sovereignty. Taiwan-based DoubleThink Lab, which tracks Chinese state influence worldwide, ranked Panama twelfth globally and second in Latin America for the depth of that penetration, concentrated most heavily in media, technology, politics, and law enforcement.

The ports were the anchor for a much deeper play for sphere-of-influence dominance. Their military value towers above all other factors. Around them, Beijing built layers of dependency, presence, and leverage — what Brazil describes as a strategy to expand influence in what Chinese strategic doctrine calls “intermediate zones.”

These are nations outside the formal US alliance structure, where Washington’s reach can be quietly contested and Taiwan’s diplomatic space steadily compressed.

The canal itself was the strategic jewel at the center of all of it.

The Hutchison concession, awarded in 1997, gave a Hong Kong conglomerate with deep ties to the mainland operational control of the two chokepoints through which the canal’s commercial traffic flows. At the time, Admiral Thomas Moorer — former Chairman of the Joint Chiefs of Staff — testified before the Senate that the arrangement was a strategic catastrophe in the making, warning that Hutchison held the legal right to deny passage to American naval vessels and that the Clinton administration was sleepwalking into Chinese control of a hemisphere-defining chokepoint.

The former naval commander testified that Hutchison Whampoa’s “business empire has long been intertwined with the enterprises that front for the Communist military intelligence arms of the People’s Republic of China.” The Clinton administration ignored him.

When the Trump administration returned to power in January 2025, Secretary of State Marco Rubio flew to Panama within weeks and issued a blunt demand: reduce the Chinese economic footprint, starting with Hutchison. Panama moved quickly. By early 2026, Brazil notes, the Supreme Court had voided the concession and the government had physically ejected Hutchison’s employees under threat of criminal prosecution. Beijing, in response, halted state enterprise investment discussions, targeted Panamanian agricultural imports for customs harassment, and detained seventy Panamanian-flagged ships in Chinese ports over eighteen days.

The retaliation is a measure of how much Beijing had expected to hold.

Washington’s concern was never simply economic. It was military and geopolitical, as Rubio’s language made plain: the United States cannot allow, he said, the Chinese Communist Party to maintain effective and growing control over the Panama Canal area.

This is the context in which Canada should be reading the Panama confrontation, and in which Mark Carney’s approach to Beijing deserves harder scrutiny than it is currently receiving.

As The Bureau has reported, Carney’s emerging cooperation agenda with Beijing involves an electric vehicle deal that risks introducing foreign surveillance platforms onto Canadian roads — a direct provocation to Washington at the worst possible moment in the bilateral relationship. It includes a media cooperation arrangement struck in a threat environment where Chinese-language media ecosystems have been documented as vectors for narrative control, dissident tracking, and election interference, and where Beijing has imprisoned Hong Kong publisher Jimmy Lai for the crime of independent journalism.

Intelligence reporting described in The Bureau‘s coverage details clandestine operations on Canadian soil — Chinese police paying Chinese-language journalists to monitor dissidents, and coercing targets not to cooperate with Canadian law enforcement. Carney widened access for that apparatus without publicly detailing safeguards, enforcement mechanisms, or even acknowledging the documented threat.

Brazil’s Panama analysis makes the underlying threat of all this visible.

Beijing does not distinguish between commercial engagement and strategic penetration. The ports, the media, the diaspora networks, the construction contracts — in Panama, they were never separate instruments. They were a single operation. Canada, in the middle of a renegotiation of its most important alliance relationship, is expanding the very channels through which that operation runs.

Washington is not limiting its concern about Chinese infiltration to Central America or the Western Hemisphere’s maritime approaches. The Arctic looks to be next, and Canada is in the middle of it. The Northwest Passage, which climate change is steadily opening to commercial and potentially military transit, is an emerging chokepoint of comparable long-term strategic importance to the Panama Canal. Canada claims it as internal waters. The United States has historically questioned that. China, which declared itself a “near-Arctic state” in 2018, has made no secret of its interest in Arctic shipping routes, resource extraction, and research presence. Canadian Arctic sovereignty, already contested diplomatically, is becoming a live security question in precisely the same period that Washington is demonstrating, through Panama, its willingness to apply sustained pressure on allies and partners it believes are too accommodating to Beijing.

The cautionary dimension of Brazil’s reporting is this: influence operations of the kind Beijing ran in Panama do not announce themselves. They arrive as investment, as infrastructure, as cultural exchange, as trade opportunity. They embed slowly, through media relationships and diaspora organizations and construction contracts, before the full architecture becomes visible.

Former senior Mountie Garry Clement has made the argument well for The Bureau, pointing to China’s control of the Beaverbrook antimony mine in Newfoundland — a critical mineral asset that could be delivering Ottawa powerful leverage in its negotiations with Washington, which is increasingly playing by hard geopolitical rules in response to the threat from the China-Russia-Iran-North Korea axis, also known as the CRINK alliance.

As Clement wrote last week for The Bureau, by the time a government recognizes how far the penetration has gone — as Panama is discovering at the cost of severed investment flows and detained ships — the costs of reversal are substantial.

Canada has its own version of this story, playing out in plain sight. The United Front networks that Brazil describes operating in Panama have their Canadian analogues, documented in the Hogue Commission and in the intelligence assessments that preceded it. The difference is that Canada has been slower than Panama to reckon with what has been built, and slower than Washington to treat the question with the seriousness the evidence demands.

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