For the last decade, China has been on the strategic offensive with a virtually unbroken series of diplomatic successes as its "Belt and Road Initiative" advanced. It helmed the "BRICS"—short for Brazil, Russia, India, China, and South Africa—alliance from a curiosity in 2006 to a 10-member organization that looks, suspiciously, like a means to control the world's maritime chokepoints and supply China with raw materials. Let's face it, if you have Russia and South Africa on your bingo card as potential economic powerhouses, you might want to invest in another card or two. This seems to have come to a screeching halt, and all, or part, of that is due to rejuvenated American diplomacy.
Panama Canal, Panama
When President Trump was inaugurated a year ago, China effectively owned the Panama Canal. Panama joined the Belt and Road Initiative in November 2017. Chinese control of the Panama Canal dates back to 1997, when Panama and Hong Kong signed a contract to operate two ports, Balboa and Cristobal, the west and east termini, respectively, of the Panama Canal.
BACKGROUND:
Does China Run the Canal? – RedState
Panama Capitulates - Will Not Renew 2017 Deal With China. What's Next? – RedState
President Trump's objections led Panama to leave the Belt and Road Initiative on February 3, 2025. This set the stage for a deal in which BlackRock was supposed to buy out Hong Kong-based CK Hutchinson Holdings, the operator of the Bilbao and Cristobal port complexes, for $22.8 billion. At the last minute, the ChiComs stepped in and blocked the deal.
CK Hutchison and BlackRock did not immediately respond to a Reuters request for comment. Chinese authorities have reacted negatively to plans by the conglomerate, while the deal was hailed by U.S. President Donald Trump who wants to retake control of the strategic waterway.
A CK Hutchison unit operates two of the five ports adjacent to the Panama Canal, which manages about 3% of the global sea-borne trade. Panama first awarded the concession to the company in 1998 to run the ports and extended it for another 25 years in 2021.
As the saying goes, "If you mess with the bull, you get the horns."
🚨BREAKING —> Communist #China has been KICKED OUT of the Panamá Canal.
— Rep. Carlos A. Gimenez (@RepCarlos) January 30, 2026
The Western Hemisphere must be the hemisphere of freedom! The regime in Beijing has no place here! pic.twitter.com/aXag3cBDd6
Panama's Supreme Court has ruled that the leases held by CK Hutchinson were unconstitutional.
The Supreme Court of Panama has annulled a contract for a Hong Kong company to operate two ports at either end of the Panama Canal, handing President Trump a victory for his security ambitions in the Western Hemisphere and denting China’s influence in the region.
The high court said the terms under which CK Hutchison runs the ports of Balboa on the Pacific Coast and Cristóbal on the Atlantic side were unconstitutional, setting the stage for the company’s departure from the port facilities.
Panamanian President José Raúl Mulino said Panama is hiring APM Terminals, a unit of shipping firm A.P. Moeller-Maersk, to manage the facilities and guarantee continuity of operations until it opens a new bidding process.
In this case, it looks like China overestimated its clout. It really underestimated how a renewed America under President Trump, who has made American domination of the Western Hemisphere the centerpiece of national defense strategy (Trump's Campaign Against Venezuela Is Jumpstarting the Monroe Doctrine – RedState), leading to the coining of the term The Donroe Doctrine, would act.
Port of Darwin, Australia
Australia is neither part of BRICS nor the Belt and Road Initiative, but in 2015, the government of the Northern Territory entered into a 99-year lease for the operation of the Port of Darwin by Shandong Landbridge Group, a privately held company with headquarters in the city of Rizhao, Shandong Province, China, which Ye Cheng owns. Like anyone in China who is allowed to amass wealth, Ye Cheng is owned and operated by the CCP.
Since then, Australia has soured on the deal. Perhaps the live fire exercises conducted by the Chinese Navy (People's Liberation Army Navy, for you purists) during its fleet's circumnavigation of Australia in February-March 2025 had something to do with it.
Both parties ran on the issue of Australia repossessing the Port of Darwin during the May 2025 federal elections.That day now seems near, and China is issuing thinly veiled threats against Australia.
China’s top diplomat in Australia has warned of retaliation from Beijing if the Albanese government forces the sale of the Chinese-owned Port of Darwin, as he issued a stern instruction for Australia to respect China’s position on the need to reunify with the self-governing island of Taiwan.
Chinese ambassador Xiao Qian argued it was a mere coincidence that China had decided to conduct live fire exercises in the Tasman Sea while circumnavigating the Australian continent last year, as he left the door open to similar future visits by the Chinese navy.
...
“So if anything happens like the port will be taken back by force or forceful measures, then we have an obligation to take measures to protect the Chinese company’s interest. This is our position.”
Xiao said Beijing would be “watching very closely” and “we will see when it’s time for us to say something, do something, to reflect the Chinese government’s position and protect our Chinese company’s legitimate interests”.
Pressed on what actions China could take to intervene over the port, Xiao said it was still a hypothetical question and he did not want to pre-empt any moves by Beijing.
Without seeing the lease, the obvious assumption is that it is retaliation against Australian companies and commercial interests. I underline "not having read the lease." When the Chinese government signed a pact with the Solomon Islands, which has historically been a virtual Australian protectorate, it included the right of the Chinese to send troops and police to the Solomon Islands to protect the government; see China Seeks to Buy Eight Pacific Island Nations While Joe Biden and His State Department Are Comatose – RedState. There is really no limit to what the government of the Northern Territories might have signed regarding the port's operation.
The U.S. had expressed several concerns about the Chinese lease of the Port of Darwin. Not the least of which are its strategic importance to China, its intelligence-gathering potential, the possibility that Darwin might be a homeport for a U.S.-built, Australian-operated nuclear submarine under the AUKUS agreement, and its bordering the base of the USMC Rotational Force-Darwin. No one in Washington or Canberra is claiming that U.S. diplomacy is at the root of the imminent cancellation of the lease, but it is difficult to see why both Australian national parties would have reached the same view without some assistance.
The bottom line is that China has worked hard to become viewed as a hostile power by the United States. It is beginning to reap the rewards of that effort, even as it faces major social and financial issues. The ongoing purges inside the Chinese military do not indicate a combat-ready force or even one that Chinese dictator Xi Jinping considers reliable; see New Round of Purges Wrack the Chinese People's Liberation Army and Defense Establishment – RedState and China Accuses Fired General of One-Upping General Mark Milley: He Gave Nuclear Secrets to the CIA – RedState.
What President Trump is demonstrating is that America has a lot of clout if its leadership and bureaucracy aren't locked into the "manage the decline of the American century" narrative. We can use force judiciously and avoid endless rounds of nation-building. We can use trade and diplomacy to make countries choose between America and China as an ally. The events in Panama and Australia show that when presented with American resolve and stark choices, we are not a power in decline.
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