Panama’s Supreme Court has struck down a decades-old concession allowing a Hong Kong–based company to operate two major ports flanking the Panama Canal, a ruling that has drawn sharp condemnation from Beijing and is widely viewed as aligning with U.S. strategic priorities under President Donald Trump.
Trump has made it a point of his foreign policy to reclaim control over the famous canal after Jimmy Carter handed it over decades ago. China’s aggression in the Caribbean has worried the Pentagon for years.
In a decision issued Jan. 29, the court declared that the concession held by Panama Ports Company (PPC)—a subsidiary of CK Hutchison Holdings—to operate the ports of Balboa on the Pacific side and Cristóbal on the Atlantic side violated Panama’s constitution. PPC has managed the facilities since the 1990s, handling substantial cargo traffic tied to the canal corridor linking the Atlantic and Pacific oceans, noted CNBC.
The ruling has been interpreted as a victory for the Trump administration, which has prioritized curbing Chinese influence over critical infrastructure in the Western Hemisphere. Trump has previously raised concerns about the canal’s strategic importance to the United States and alleged Chinese involvement in its surrounding operations.
Beijing responded forcefully. China’s Hong Kong and Macao Affairs Office of the State Council issued a commentary Tuesday on its WeChat account condemning the decision as “logically flawed” and “utterly ridiculous,” and said it was opposed by both the Chinese central government and the Hong Kong Special Administrative Region government. The office urged Panamanian authorities to “recognize the situation and correct their course,” adding: “If they persist in their own way and remain obstinate, they will inevitably pay a heavy price in terms of politics and economics!”
Earlier remarks from China’s foreign ministry were more restrained, suggesting the ruling ran counter to Panama’s legal processes for approving concessions and stating that Beijing would take steps to protect the rights of Chinese enterprises.
CK Hutchison has moved quickly to contest the decision. On Wednesday, the company said PPC had initiated international arbitration against Panama under the rules of the International Chamber of Commerce in Paris, pledging to pursue the case “vigorously” and seek “extensive damages” for the annulment of the licenses, without disclosing specific figures. The company maintains that the ruling and related government actions conflict with the legal framework governing the concession.
Panama’s government, meanwhile, has emphasized continuity at the ports. President Jose Raul Mulino said officials are in discussions with alternative operators, including Denmark’s Maersk, to provide temporary management following the court’s decision.
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