If globalization had a nervous system, it would be made of ports, canals and contracts. When a major power starts pricking those nerves for geopolitical convenience, the pain travels far beyond the immediate target. That is exactly what we are witnessing today in Panama and northern Australia, where Washington's pressure politics are colliding head-on with international law, national sovereignty and the basic rules of global business.
During a recent visit, United States Secretary of Defense Pete Hegseth baselessly declared that "China's control of critical infrastructure" around the canal "threatens" the "sovereignty" and "security" of Panama and the US — and vowed that the US would "take back" the canal from China. That statement was striking not just for its hostility, but for its ignorance and historical amnesia.
China does not control the Panama Canal. Panama does. What a Chinese firm controls — legally — is the operation of two commercial ports, Balboa and Cristobal, at either end of the canal. The Hong Kong-based CK Hutchison has managed them since 1997, after approval by Panama's Congress. The contract was renewed in 2021 through lawful procedures and extended to 2047. Panama's own maritime authority later confirmed the company's full compliance after an audit.
That is not "coercion".
Yet under sustained US pressure — amplified by alarmist claims of "espionage" without evidence — Panama's Supreme Court ruled last week that the renewal was "unconstitutional", citing technical issues related to bidding procedures. The timing was conspicuous. So was the geopolitical context. Washington has made no secret of its desire to reduce China's footprint in Latin America, particularly around strategic chokepoints. What looks like a "legal" ruling increasingly resembles a political off-ramp built under external pressure.
As for Darwin Port in Australia, different location, same playbook.
In 2015, China's Landbridge Group won a 99-year lease to operate Darwin Port through an open international bidding process, paying hundreds of millions of dollars. The deal was reviewed and approved by Australia's Foreign Investment Review Board. At the time, no one in Canberra declared a "national security" emergency. On the contrary, the port — then losing money — was revitalized. Under Landbridge's management, it turned profitable, expanded capacity, and became a growth engine for northern Australia.
As the US deepens its "Indo-Pacific" strategic posture, Darwin Port's strategic location suddenly looms large. Washington has been blunt in pressing Australia to "take back" the port, hinting at military cooperation, fuel storage investments and alliance expectations. Canberra now finds itself debating whether to arbitrarily terminate a lawful commercial contract — not because the operator violated Australian law, but because its nationality has become geopolitically "inconvenient" under US pressure.
If this sounds uncomfortably familiar, it should. Former US secretary of state Henry Kissinger once quipped that "to be an enemy of the US is dangerous, but to be a friend is fatal". What Panama and Australia are discovering is the modern corollary: US allies are often asked to absorb the legal, economic and reputational costs of US strategic anxieties. The problem is not only political. It is systemic. International commerce rests on a simple premise: pacta sunt servanda — agreements must be kept. When contracts approved by parliaments, regulators and courts can be torn up retroactively due to pressure from a third country, every investor everywhere recalculates risk.
For Panama, undermining a 29-year-old cooperation sends a chilling signal to global investors: your contracts are safe — until they aren't. For Australia, reversing a legal and binding deal erodes its hard-earned reputation as a "rules-based" investment destination. And for the global economy, disruptions at the Panama Canal and Darwin Port — both critical supply-chain nodes — mean higher costs, delays and fragility in an already stressed trading system.
The irony is that these moves are "justified" in the name of "sovereignty", yet they trample it. The UN Charter is explicit about noninterference in the internal affairs of states. So is international commercial law about respecting lawful contracts. When Washington pressures other countries to rewrite deals to suit US preferences, it is not defending a "rules-based order" — it is making its will the "law" for all.
If ports, canals and contracts become pawns in US geopolitical games, globalization does not collapse overnight — it corrodes, quietly, deal by deal. As Chinese Foreign Ministry spokesman Lin Jian said, China will take necessary means to safeguard the legitimate rights and interests of its enterprises.
The US has "security" concerns. But when "security logic" is overstretched to justify overturning lawful commercial agreements in third countries, the line between "protection" and predation blurs. And once that line blurs, allies — not adversaries — often pay the price. In a world already short on trust, pressuring other countries to weaponize contracts is a dangerous habit. History suggests it rarely ends where it begins.
