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Panama may cancel Chinese port contract as Trump threatens to ‘retake’ canal

Panama’s Attorney General’s Office has recommended annulling the 1997 concession granted to a Chinese company to operate two key ports at the entrances of the Panama Canal, citing constitutional violations. The move comes as U.S. President Donald Trump threatens to “retake” the waterway, claiming it is under Beijing’s control.

The request was made by Panama’s Chief Prosecutor, Luis Carlos Gómez, to the Supreme Court, which is currently reviewing two legal challenges against the concession contract awarded to Panama Ports Company, a subsidiary of Hong Kong-based Hutchison Holdings.

At the same time, the company is facing an audit by Panama’s Comptroller’s Office to determine whether it has fulfilled its financial obligations to the government.

According to Gómez, the contract is “unconstitutional”, and he has urged the court to invalidate it. In a document obtained by AFP, he argues that the agreement violates 15 articles of the Panamanian Constitution, as it “improperly transferred exclusive state rights, impacting social and public interests.”

Additionally, Gómez claims that the contract undermines free competition, grants unjustified tax exemptions, and that the automatic 25-year renewal in 2021 was agreed upon under unfair conditions for the public interest.

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The lawsuits seek to void the contract that allows Panama Ports Company to operate the Balboa and Cristóbal ports, located at the Pacific and Atlantic entrances of the canal, respectively. The plaintiffs argue that the company has evaded taxes and received illegal benefits in violation of the Constitution.

The legal battle unfolds as Trump raises concerns over China’s influence in the canal, which the U.S. built and operated until its handover to Panama in 1999. Trump has hinted at taking back control of the waterway, despite the fact that it is managed by an independent Panamanian authority.

Washington sees the presence of a Chinese company at the canal’s entry points as a national security risk, even though both the U.S. and China are the top users of the strategic trade route. The canal, which handles 5% of global maritime trade, underwent a major expansion in 2016 to accommodate larger vessels.

 

 

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Central America

Panama begins reverse migration by sea for 109 stranded migrants

Panamanian authorities have transported a group of 109 migrants of various nationalities by sea to La Miel, a Caribbean town on the country’s border with Colombia, to continue their return journey to South America. The move comes after the migrants failed to settle in the United States, following stricter immigration policies implemented under the administration of former President Donald Trump.

The National Migration Service (SNM) of Panama announced in a statement on Tuesday that the transfer was carried out from the Caribbean port of Colón using a vessel from Panama’s National Aeronaval Service (Senan). The operation was part of the country’s so-called “reverse flow” initiative, aimed at facilitating the safe return of migrants.

The official report noted that the group included migrants from nine different nationalities, with 75 adults and 34 minors on board. Authorities emphasized the “inter-institutional commitment to safe and humanitarian reverse migration.”

A source familiar with the process, speaking anonymously to EFE, confirmed that the vessel departed on Monday. Many of the migrants had opted into the reverse flow program after arriving at the Temporary Attention Center for Migrants (CATEM) in Costa Rica, where coordination was made with Panamanian authorities for their return.

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Central America

Ombudsman: Tear gas overused in Arimae protest crackdown

Panama’s Ombudsman Office stated on Tuesday that the National Police (PN) used excessive tear gas to disperse a protest in the indigenous community of Arimae, which escalated into a violent clash lasting several hours and leaving multiple people injured on both sides.

After a two-day visit to Arimae, a town in the Darién province about 200 kilometers from Panama City, Ombudsman Eduardo Leblanc reported that “there was clear evidence of the excessive use of tear gas in the community, which has caused various health issues among the population.”

The confrontation occurred on June 5, when police forces arrived to clear a section of the Pan-American Highway — which spans the entire country — that had been blocked by residents using tree trunks. The blockade was part of a protest against a newly enacted social security reform.

According to EFE, police responded with tear gas and rubber bullets, while demonstrators hurled rocks, sticks, arrows, and even Molotov cocktails.

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Central America

Honduras sees 7.8% rise in external public debt year-on-year

Honduras’ public sector external debt reached $9.96 billion by the end of April 2025, marking a 7.8% increasecompared to the same period in 2024, according to a report released Tuesday by the country’s Central Bank (BCH).

The figure represents a rise of $725.8 million compared to the $9.24 billion recorded between January and April 2024.

However, the debt balance decreased by $243.2 million compared to December 2024, when it stood at $10.2 billion. This reduction was primarily due to higher principal payments totaling $410.8 million, while new disbursements reached only $87.4 million, resulting in a net amortization of $323.4 million. This effect was partially offset by unfavorable exchange rate fluctuations, which increased the debt balance by $80.2 million.

By institution, the general government holds 90.8% of the debt (approximately $9.05 billion), followed by the monetary authority with 7.7% ($770 million), non-financial public enterprises with 1.3% ($126.6 million), and public financial institutions with 0.2% ($16.5 million), the BCH detailed.

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