In January, the Trump Administration published its 2026 National Defense Strategy (NDS). The document, which was released without fanfare, confirms that a strategic shift is well underway in the Western Hemisphere, and Latin American and Caribbean states are on the receiving end of that shift.
The NDS follows the National Security Strategy (NSS), released in November 2025, which makes this shift explicit by naming a core foreign policy objective: to “restore American preeminence in the Western Hemisphere” through a “Trump corollary” to the Monroe Doctrine. Key to this is a Western Hemisphere that “remains free of hostile foreign incursion or ownership of key assets.”
The NDS reinforces this framing, noting that adversaries’ influence has grown in what it deems to be key terrain, including the Gulf of America (i.e., the Gulf of Mexico), the Panama Canal, and locations farther south.
Although the document does not explicitly call out China as a threat to hemispheric security, Beijing’s imprint is unmistakable throughout it. The emerging approach toward China is one of denial, and, as seen by the recent developments in Venezuela, Cuba, and Panama, Latin America is feeling its effects.
The Battle Over Panamanian Ports
In March 2025, a group of investors led by U.S. company BlackRock agreed in principle to buy dozens of ports from Hong Kong-based company CK Hutchison Holdings. The deal, which set the consortium up to acquire 43 ports across 23 countries, included two especially sensitive ports: Balboa and Cristobal, which sit at the Pacific and Caribbean ends of the Panama Canal.
Mounting criticism from Beijing led to a halt in the sale. In Panama, the controversy around the sale led to an audit by the country’s Comptroller General, who afterwards filed a lawsuit alleging that the sale of Balboa and Cristobal were unconstitutional, on the grounds that CK Hutchison lacked the legal authority to operate the ports in the first place.
As the deal stalled, Beijing pushed for Chinese state-owned COSCO Shipping Corp to be brought into the sale. Granting COSCO a stake and potentially veto rights could preserve China’s access to the Panama Canal through Balboa and Cristobal.
That effort ultimately failed. On January 29, 2026, Panama’s Supreme Court ruled the port concession unconstitutional, further complicating the sale.
Since Washington’s concerns in Panama are tied to Beijing’s alleged control over those ports, the Supreme Court ruling left them feeling vindicated. U.S. Secretary of State Marco Rubio called the ruling “a win for America, Panama, and all of our allies who recognize the Canal’s importance to national security and the world economy.”
There are now reports that CK Hutchison is looking to salvage the remaining parts of the deal through split sale between BlackRock and COSCO, with different buyers taking control of assets in different regions. That set up would grant BlackRock control over CK Hutchison’s ports in regions more aligned with Washington, like the ones in Latin America and the Caribbean, while COSCO would have more port control in regions with closer ties to Beijing, i.e. Africa.
Regardless of what becomes of the deal, it is illustrative of a broader trend: that infrastructure is increasingly being treated like a geopolitical asset in order to validate and impose spheres-of-influence logic onto global economic relations.
The Search for an Alternative
Now that China’s options for access to the Panama Canal seem to be narrowing, Beijing is actively looking for an alternative to the Panama Canal. There are five main alternatives:
- The Nicaraguan Grand Canal
- the Interoceanic Corridor of the Isthmus of Tehuantepec
- The Central Bi-Oceanic Corridor
- The Capricorn Bi-Oceanic Corridor
- The Strait of Magellan
None of these are perfect alternatives. The Nicaraguan option remains just a grand dream, while the Capricorn Corridor requires the approval from, among others, Paraguay — a staunch ally of Taiwan. The Mexican option of Tehuantepec is also becoming increasingly unlikely, given Washington’s focus on the Gulf of Mexico as a key terrain in the NDS and the potential CK Hutchison split sale, which includes three ports in Mexico.
The Central Bi-Oceanic Corridor would involve Brazil, Bolivia, and Peru. Given Bolivia’s recent alignment with the U.S., China might seek to bypass the landlocked country by connecting Peru’s Chancay port — owned by COSCO — with Santos port in Brazil, where Chinese agribusiness giant COFCO is building the port’s largest terminal.
That effort might be wasted, since Washington has already moved to counter Beijing’s influence in Peru through a multipronged strategy that includes security cooperation at the Port of Paita, military collaboration at the Port of Callao, and economic investment at the Port of Matarani.
Together with structural challenges tied to project financing and the distance it needs to cover (roughly 3,750km), as well as environmental concerns, the Central Bi-Oceanic Corridor does not look like a viable alternative for China in the short to medium term.
The Last Option
This leaves the Magellan Strait as the most viable option. In 2023, the Argentinian province of Tierra del Fuego and Chinese state-owned company Shaanxi Chemical Industry Group signed a memorandum for a project that included a multipurpose port and a chemical plant in Río Grande.
The proposal quickly became entangled in broader U.S.-China tensions and was ultimately shelved and eventually taken over by a local consortium.
Attention has since shifted to Ushuaia, home to an existing port that serves as a key logistics hub for Antarctic operations and southern maritime routes, especially in the event of a closure of the Panama Canal. In January 2026, the Argentinian Government decided to intervene in the port’s administration, a move that was generally interpreted through a geopolitical lens.
There has also been some speculation that Argentina’s president Milei is seeking to establish a joint naval base with the U.S. These developments, together with reports of secret military dialogues between the U.S., the United Kingdom, and Argentina, would significantly limit Beijing’s access to this southern alternative to the Panama Canal.
Narrow Openings
Although there is plenty of noise surrounding U.S. rhetoric on sensitive geopolitical issues, there appears to be a coherent strategy underway to displace China from the Western Hemisphere. When the stated priorities in national documents like the NSS and NDS are combined with the unfolding developments on the ground, Washington is clearly taking steps to deny China the ability to position capabilities, secure commercial access, or exert influence over key terrain in the region. How Beijing reacts to it (or is able to adapt to it) remains to be seen.
Alonso Illueca is CGSP’s Non-Resident Fellow for Latin America and the Caribbean.
