Panama City (AFP) – Panama’s Supreme Court annulled on Thursday the concession allowing Hong Kong-based CK Hutchison to operate ports at the Panama Canal, a ruling that undermines Chinese sway over the waterway. As Beijing and Washington vie for global influence, container ports have become a prized currency — especially those situated in geopolitically strategic locations such as the Panama Canal. Just days into US President Donald Trump’s second term, he threatened to take back the canal — built by the United States and handed to Panama in 1999 — claiming Beijing was effectively “operating” it.
Panama has rejected the claim that China had de facto control over the canal, which handles 40 percent of US container traffic, while taking actions to appease Trump. The firm has sought to sell its Panama Canal ports to a consortium led by US asset manager BlackRock. The status of that proposal is unclear following the court ruling. On Thursday, the Supreme Court found the laws which allowed CK Hutchison Holdings to operate two of the five ports of the canal “unconstitutional,” according to a court statement. The CK Hutchison subsidiary concerned by the ruling rejected the judgement, saying that it “lacks legal basis.” The ruling “jeopardizes not only PPC (Panama Ports Company) and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity,” it said.
Beijing, meanwhile, on Friday vowed to “take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.” Hong Kong’s government also rejected the decision. The United States and China are the canal’s top users, with around five percent of global maritime trade transiting from there. Panama Ports Company — a CK Hutchison Holdings subsidiary — manages the ports of Cristobal on the canal’s Atlantic entrance and Balboa on the Pacific side. The concession was automatically renewed in 2021 for another 25 years.
The lawsuit to cancel the concession was brought before the Panamanian high court last year on allegations that it was based on unconstitutional laws and that the Hong Kong business was not paying taxes. CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms, and logistics. Shares in CK Hutchison declined more than 4 percent on the Hong Kong stock exchange on Friday. Chinese state media has previously slammed the proposed sale to BlackRock, while Beijing has warned parties involved to exercise “caution,” warning of legal consequences should they proceed without their clearance.
In April, the Panamanian Comptroller’s Office accused the firm of allegedly failing to pay the state $1.2 billion from its operations, according to an audit by the agency in charge of overseeing public spending. Panama has been trying to avoid being dragged into what President Jose Raul Mulino last year called a “geopolitical conflict.” Mulino has insisted the canal’s neutrality is intact and has urged Washington not to entangle Panama in its rivalry with Beijing.
Still, Panama has taken steps to ease the pressure from Washington. Last year it withdrew from China’s Belt and Road Initiative, and earlier this month it announced new joint US-Panama canal defense drills — the fourth since 2025 — aimed at boosting readiness around the 50‑mile (80‑kilometre) trade route. The canal has become a recurring flashpoint as Trump pursues what he calls the updated “Donroe Doctrine,” asserting expanded US authority in the Western Hemisphere. In his inauguration address, the US president said: “We didn’t give it to China, we gave it to Panama. And we’re taking it back.”
At the same time, Beijing has sharply criticized moves against its assets in Panama, including the demolition late last year of a monument honoring Chinese workers who helped build the canal and the 19th‑century railway that preceded it.
© 2024 AFP
