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Panama’s Supreme Court has voided contracts allowing Hong Kong-based CK Hutchison Holdings to operate two critical port facilities at the Panama Canal, marking a significant victory for Trump administration efforts to secure the waterway against Chinese influence. The Thursday ruling declared the contract terms for operating the ports of Balboa and Cristobal unconstitutional, forcing the company with decades-long ties to the Chinese government to end operations at these strategic locations.
Panamanian President Jose Raul Mulino assured continued port operations without interruption, announcing that a Danish logistics company, A.P. Moller-Maersk, would manage the facilities during the transition. The decision followed a government audit revealing irregularities in CK Hutchison’s 25-year contract extension granted in 2021, including unpaid fees, accounting errors, and unauthorized “ghost” concessions since 2015.
The audit found these irregularities cost Panama approximately $300 million since 2021 and $1.2 billion under the original contract.
China strongly condemned the ruling, with Foreign Ministry spokesman Lin Jian vowing to protect Chinese companies’ rights and interests. Panama Ports Co., CK Hutchison’s subsidiary, criticized the decision as legally baseless and threatening to thousands of Panamanian families dependent on port operations. The company had previously attempted to sell its stake to an international group including BlackRock to address U.S. concerns, but Beijing blocked the deal.
The ruling aligns with President Trump’s aggressive stance on canal control. In April, he directed Secretary of State Marco Rubio to solidify American control, declaring on Truth Social that U.S. military and commercial ships should travel through the Panama and Suez canals free of charge. During his January 2025 inaugural address, Trump stated China was operating the canal and vowed to take it back.
The Pentagon’s national defense strategy identifies the canal as threatened and a target for renewed Monroe Doctrine enforcement in the Western Hemisphere. Marine Corps Gen. Francis Donovan, recently confirmed as U.S. Southern Command’s next commander, called the canal a “key strategic asset” requiring comprehensive security review. Previous military leaders warned these Chinese-operated facilities could be quickly converted to military use during conflict.
Rep. John Moolenaar praised the decision as “a win for America, Panama and all of our allies,” emphasizing that canal ports should be entrusted only to operators sharing common values. The situation mirrors similar Chinese port control disputes, including Australia’s Port Darwin, leased to Chinese company Landbridge in 2015, which Australian Prime Minister Anthony Albanese recently committed to reclaiming.
Read more: Panama blocks Chinese-linked company from operating ports at either end of the canal
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