Panama court ends Hong Kong canal contracts, handing Trump win
panama’s supreme Court has voided concession contracts that allowed hong Kong-based CK Hutchison’s subsidiary, Panama Ports Company (PPC), to operate the Balboa and Cristóbal terminals on the Panama Canal, a decision hailed as a win for the Trump governance’s effort to reduce Chinese influence over the strategic waterway. The court ruling followed a Panamanian comptroller audit alleging PPC’s contract management shortchanged Panama by about $1.3 billion and declared the 1997 law and related statutes underpinning the concessions unconstitutional. CK Hutchison called the decision legally baseless and warned it threatens jobs, legal certainty, and thousands of Panamanians’ livelihoods. The move complicates a previously announced $23 billion deal to transfer control of the ports to U.S.-based BlackRock, which had already stalled amid the audit and ensuing scandal. U.S. officials, including president Trump and Secretary of state Marco Rubio, had pressured Panama to remove perceived Chinese influence; the Pentagon’s recent National Defense Strategy stressed securing access to key Western Hemisphere terrain including the Panama Canal. Panamanian President José Raúl Mulino said operations would continue without disruptions or layoffs,and suggested Maersk’s APM terminals might temporarily run the two terminals.
Panama court cancels Hong Kong canal contracts, handing Trump win
Panama’s Supreme Court on Thursday blocked a Hong Kong-based company from operating ports on the Panama Canal, giving the Trump administration a victory in its bid to divest the critical waterway of Chinese influence.
The ruling revolves around CK Hutchison Holding, the Hong Kong firm that has operated two of the canals’ five ports since the 1990s through its subsidiary, Panama Ports Company. The Panamanian government accused CK Hutchison of breaching its concession contracts, including one renewed in 2021. The lawsuit stemmed from an audit brought by Panama’s comptroller that determined the company’s management of the contracts shortchanged the country by around $1.3 billion.
The court determined this week that the 1997 law, and others underpinning the decadeslong contracts, or concession agreements, at the ports of Balbao and Cristobal were “unconstitutional.”
Panama Ports Company attacked the ruling in a statement, alleging it “lacks legal basis.”
The ruling “jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country,” CK Hutchison Holding’s subsidiary said. “The ruling is diametrically opposed to previous decisions issued by the Supreme Court regarding contracts similar to the PPC contract.”
The development comes as President Donald Trump and Secretary of State Marco Rubio have raised concerns that communist officials in Beijing are exercising undue influence over one of the world’s most strategic waterways. As part of the White House’s agenda to reassert dominance in the Western Hemisphere, Rubio made a personal visit to Panama in early 2025, telling the country’s president that the Panama Canal must get rid of Chinese influence or else face retaliation from the Trump administration.
“The United States will no longer cede access to or influence over key terrain in the Western Hemisphere,” the Pentagon’s new National Defense Strategy, released earlier this month, reiterated. “[The Department of War] will therefore provide the President with credible options to guarantee U.S. military and commercial access to key terrain from the Arctic to South America, especially Greenland, the Gulf of America, and the Panama Canal.”
BLACKROCK TO TAKE OVER HONG KONG-OWNED PORTS IN PANAMA CANAL IN $23 BILLION DEAL
A month after Rubio’s visit, CK Hutchison Holding reached a $23 billion agreement last March to hand over control of the ports to BlackRock, a U.S. firm. But the deal began to stall as CK Hutchison Holding became embroiled in a scandal following Panama Comptroller General Anel Flores’s audit. It is unclear how Thursday’s ruling will affect the deal further.
Panamanian President Jose Raul Mulino said on Friday that ports in the country will continue operating without disruption and that there would not be any layoffs. He suggested APM Terminals Panama, a Maersk subsidiary, would temporarily take over the operation of the Balboa and Cristobal terminals.
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