China has come out swinging after Panama’s high court ruled against a Hong Kong-backed company’s right to operate key ports at the Panama Canal, vowing the government will “pay a heavy political and economic price” if it did not reverse course.

In March last year it seemed that Mr Trump’s canal issues might be resolved with a commercial transaction. A consortium of Western companies would acquire the ports as part of a wider deal with CK Hutchison.

China has backed a high-profile legal case against the Panamanian government over control of the Panama Canal.