President Mulino responds to China, insists his country upholds the rule of law and and has an independent court system.

Panama’s President Jose Raul Mulino has rejected China’s threat to make the Central American country pay a “heavy price” after a Hong Kong company was evicted from two ports on the strategic Panama Canal amid pressure from United States President Donald Trump.

Writing on social media on Wednesday, President Mulino said he “strongly” rejected the Chinese government’s threat against his country, which followed after Panama’s Supreme Court invalidated a contract that had allowed the Hong Kong-based CK Hutchison to operate two ports on the canal.

In his post, Mulino pushed back against Beijing, insisting that Panama was a country that upholds the rule of law “and respects the decisions of the judiciary, which is independent of the central government”.

He added that the Panamanian Foreign Ministry would issue a statement on the matter “and adopt the corresponding decisions”.

The loss of CK Hutchison’s port concession on the Panama Canal has come to symbolise the battle for influence and trade between the US and China in Latin America.

Tensions came to a head last year after President Trump threatened to take control of the Panama Canal, even warning of military action, and called for the cancellation of CK Hutchison’s contracts.

Last week, Panama’s Supreme Court ruled that CK Hutchison’s concession was “unconstitutional”, a decision that the Chinese government’s Hong Kong and Macao Affairs Office (HKMAO) described as “absurd” and “shameful”, while also warning that the Latin American country would pay “heavy prices both politically and economically”.

“Panamanian authorities must recognise the situation and correct their course,” HKMAO was quoted as saying.

Beijing’s Foreign Ministry spokesman Lin Jian also said that China would “firmly defend the legitimate and lawful rights and interests” of Chinese companies and accused the US of a “Cold War mentality and ideological bias”.

“It is quite clear to the world who exactly is seeking to forcibly own the Panama Canal and eroding international law in the name of the rule of law,” Lin added.

The Panama Canal connects the Atlantic and Pacific oceans, and since 1997, CK Hutchison had managed the ports of Cristobal on the canal’s Atlantic side and Balboa on the Pacific side through its subsidiary, the Panama Ports Company. The concession to operate the two ports was extended for 25 years in 2021.

But after Trump threatened last year to seize the canal, Panama’s comptroller general reviewed CK Hutchison’s contract and subsequently recommended it be annulled.

The Supreme Court backed the comptroller’s view that the terms of the concession ran counter to Panama’s interests.

Following the ruling, the Panamanian government tapped Danish shipping company Maersk to temporarily take over management of the port terminals until a new concession is awarded.