Panama’s Supreme Court delivered a major foreign policy win for President Donald Trump on Friday by voiding a long-standing port concession held by a Hong Kong–based firm with ties to China.
The unanimous ruling invalidated contracts granted to Panama Ports Company, a subsidiary of CK Hutchison Holdings, to operate container terminals at the Balboa and Cristobal ports near the Panama Canal.
Justices struck down both the original 1997 concession and a 25-year extension approved in 2021, citing multiple violations of Panama’s constitution and public-interest standards.
The court relied heavily on findings from an audit conducted by Panama’s comptroller general, which identified extensive legal and regulatory irregularities tied to the deal.
Among the violations were exclusive privileges and tax exemptions granted to the company that were not available to competitors operating in the same market.
The audit also found that required environmental impact assessments were never conducted before the concession was approved or extended.
Additionally, the contract included provisions requiring government approval from the private operator before issuing competing concessions, effectively limiting competition.
The justices said these terms created a “de facto monopoly” without a formal declaration, disproportionately favoring the company and undermining the national interest, per Trending Politics.
Following the ruling, Panamanian President José Raúl Mulino assured global shipping interests that canal traffic would continue uninterrupted during a transition period.
Mulino said the Panama Maritime Authority would coordinate with the outgoing operator to maintain operations while the concession is formally terminated.
A local subsidiary of Danish shipping giant A.P. Moller-Maersk is expected to assume temporary management as Panama prepares a new public bidding process.
CK Hutchison, controlled by Hong Kong billionaire Li Ka-shing, has long been viewed by geopolitical analysts as closely aligned with Chinese government interests.
Prior to the court decision, the company had been negotiating a sale of its port stakes to a U.S.-led consortium that included BlackRock Inc.
Those talks reportedly collapsed after Beijing objected and pushed to include state-owned China Cosco Shipping Corp. in the buyer group.
The court’s ruling effectively sidelines those negotiations and reopens the door for new operators from the United States or Europe.
Trump has repeatedly warned that Chinese influence over the canal represents a direct threat to U.S. national security and global commerce.
“China is operating the Panama Canal and we didn’t give it to China. We gave it to Panama and we’re taking it back,” Trump said during his inaugural address last year.
The president has also labeled the original handover a “rip-off” and warned that military action remained an option to protect American interests.
U.S. Secretary of State Marco Rubio welcomed the ruling, calling it an important step toward limiting Chinese influence in the Western Hemisphere.
Panama previously withdrew from China’s Belt and Road Initiative and agreed to expanded U.S. troop rotations, moves widely viewed as responses to sustained pressure from the Trump administration.
