Panama’s Supreme Court on Thursday annulled the concession under which the Hong Kong company CK Hutchison operated two ports on the Panama Canal, a decision rejected by the firm and by the Chinese government, which promised to “protect” the interests of its companies.
The ruling comes amid repeated threats by President Donald Trump to retake the waterway that the United States built and later handed over to Panama, arguing that it is controlled by Beijing. The two powers are the main users of this route, which carries close to 5% of global maritime trade.
Panama’s high court, sitting in full session, declared “unconstitutional” the laws through which Panama Ports Company (PPC), a subsidiary of CK Hutchison Holdings, had controlled the ports of Balboa and Cristóbal since 1997. The ports sit at opposite entrances to the canal, according to an official statement.
The Comptroller General of Panama had sought the contract’s annulment, filing two lawsuits last year after concluding the concession was “unconstitutional” and that irregularities had occurred. Panamanian President José Raúl Mulino had also said on several occasions that the concession was the product of a “lopsided” contract “contrary to national interests.” In 2021, it was renewed for another 25 years.
PPC said early Friday that the ruling “lacks a legal basis and endangers” not only its contract, but also “the well-being and stability of thousands of Panamanian families” that depend on its activity. Chinese Foreign Ministry spokesperson Guo Jiakun warned that Beijing “will take all necessary measures to resolutely protect the legitimate rights and interests of Chinese companies,” echoing PPC’s arguments.
Hong Kong’s government also “firmly” rejected the ruling, saying in a statement that “any foreign government using coercive, repressive, or other methods” to interfere in business relations is unacceptable.
Sale in limbo
CK Hutchison Holdings, created by Li Ka-shing, Hong Kong’s richest man, is one of the largest conglomerates in the semiautonomous Chinese financial hub, spanning finance, retail, infrastructure, telecommunications, and logistics. After the announcement from Panama, the conglomerate’s shares fell 4.6% in Friday trading on the Hong Kong stock exchange.
The adverse ruling arrived amid a delayed port-sale process that Hutchison announced in March 2025, to transfer its stake in the Panamanian terminals to a consortium led by U.S. firm BlackRock, as part of a package valued at $22.8 billion. The deal was viewed favorably by the United States at the time, but later slowed after China warned that the agreement could harm its global interests.
Beijing urged the parties to act with “caution,” warning of legal consequences if they proceeded without its authorization. In April, Panama’s Comptroller General, which audits public spending, accused Hutchison of allegedly failing to pay the Panamanian state $1.2 billion for its operations.
PPC, for its part, said it is “the only port operator in the country in which the state is a shareholder,” and that it paid the Panamanian government $59 million over the past three years.
Trump threats
Since returning to the White House, Trump has insisted that China controls the Panama Canal, even though the maritime route is administered by an autonomous Panamanian public institution independent of the government. “We have been very badly treated with this stupid gift that never should have been given.
The promise Panama made to us has not been kept (…) China operates the Panama Canal, and we did not give it to China, we gave it to Panama. And we are going to take it back,” the Republican magnate said during his inauguration a year ago.
The United States opened the waterway in 1914, but handed it over to Panama on December 31, 1999, under bilateral treaties establishing that all ships, regardless of country, pay tolls based on the vessel’s capacity and its cargo. Panama has rejected the claim that Beijing de facto controls the canal, which handles 40% of U.S. container traffic, and it has taken various steps to calm Trump.
The canal plans to invest more than $8.5 billion over the next decade to expand and diversify its business. Projects include building two additional ports by 2029 at a cost of $2.6 billion, in which several Chinese companies have shown interest, as well as a pipeline and a new reservoir.
