Panama Rebukes China After Supreme Court Cancels Hong Kong Firm’s Panama Canal Port Concessions

Panama’s President José Raúl Mulino has publicly rejected a Chinese warning that the Central American nation would pay a “heavy price” after a Hong Kong company was removed from operations at two strategic Panama Canal ports. The move follows a Supreme Court decision that invalidated the contract allowing CK Hutchison to operate the terminals.

Posting on social media, President Mulino said he “strongly” rejected Beijing’s threat and stressed that Panama is a country that upholds the rule of law “and respects the decisions of the judiciary, which is independent of the central government.” He added that the Panamanian Foreign Ministry would issue a formal statement and take the necessary diplomatic steps.

The cancellation of CK Hutchison’s concession has become a flashpoint in the wider geopolitical contest between the United States and China for influence in Latin America. Tensions rose last year after then-President Donald Trump suggested the U.S. might take control of the Panama Canal and urged the annulment of CK Hutchison’s contracts.

Last week, Panama’s Supreme Court ruled that the concession granting CK Hutchison the rights to operate the Cristóbal (Atlantic) and Balboa (Pacific) terminals was “unconstitutional.” The Hong Kong and Macao Affairs Office (HKMAO) condemned the decision as “absurd” and “shameful,” warning that Panama could suffer “heavy prices both politically and economically.”

“Panamanian authorities must recognise the situation and correct their course,” the HKMAO said.

China’s Foreign Ministry spokesman Lin Jian said Beijing would “firmly defend the legitimate and lawful rights and interests” of Chinese companies and accused the United States of a “Cold War mentality and ideological bias.” Lin added: “It is quite clear to the world who exactly is seeking to forcibly own the Panama Canal and eroding international law in the name of the rule of law.”

CK Hutchison, through its Panama Ports Company subsidiary, has managed Cristóbal and Balboa since 1997; its concession was extended for 25 years in 2021. After threats from the U.S. last year, Panama’s comptroller general reviewed the contract and recommended its annulment. The Supreme Court upheld that view, saying the concession’s terms ran counter to Panama’s national interests.

Following the ruling, the Panamanian government appointed Danish shipping group Maersk to temporarily manage the terminals while a new concession process is organised and a permanent operator is selected. The dispute highlights the strategic importance of the Panama Canal, which links the Atlantic and Pacific Oceans, and underscores how trade infrastructure can become entangled in great-power rivalry.

What Comes Next

Panama faces a delicate diplomatic balancing act: defending its judicial independence and sovereignty while managing economic and political pressure from China and continued U.S. interest in the canal’s security. The Foreign Ministry’s forthcoming statement and the process to reassign the concessions will be closely watched by governments and global shipping companies alike.