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.

Even though the Panama Canal is run by an autonomous entity overseen by the Panamanian government, the U.S. government claims China exerts influence through a Hong Kong-based comp

The lawsuit claims that the contracts allowing Hong Kong-owned CK Hutchison Holdings to operate two ports at either end of the canal violate Panama's constitution.