The canal’s two biggest ports are operated by a Hong Kong company with global reach. The Trump administration sees a Chinese threat to U.S. security.

Donald Trump’s new trade war is further blurring the lines between Hong Kong and Beijing, threatening to erode the city’s main selling point as a global financial hub.

Panama is weighing whether to cancel its contract with the Hong Kong-based company that operates ports near the Panama Canal, according to people with knowledge of the situation, a potential concession to defuse President Donald Trump’s threats about countering China’s influence around the key waterway.