FPI / February 4, 2026
In a major strategic setback for communist China, Panama’s Supreme Court ruled on Jan. 29 that Hong Kong-based CK Hutchison’s contract to operate the key Panama Canal ports of Balboa and Cristobal is unconstitutional.
The ruling dismantles a key Chinese foothold, compromises Beijing’s regional logistics reach, and complicates a massive $23 billion global port deal while boosting U.S. influence.
The ruling means the company, which has had close ties to the Chinese party-state system for decades, will be forced to end its operations at the strategic facilities. Balboa is on the Pacific coast and Cristobal on the Atlantic end of the canal.
In a bid to assuage U.S. concerns, CK Hutchison had announced last year that it planned to sell its majority stake in the canal ports and other ports worldwide to an international group that included BlackRock Inc.
The deal, however, was derailed by opposition from the Xi Jinping regime in Beijing.
According to a 2000 U.S. intelligence report, the original operator of the two canal ports, Hutchison Whampoa Co., won the port concessions through “an unfair and corrupt contractual bidding process,” according to a Washington Times report.
The major shareholder of Hutchison Whampoa, Li Ka-Shing, has close ties to the communist government in Beijing, the report said.
Panamanian President Jose Raul Mulino told reporters in Panama City on Jan. 30 that operations at the ports would continue without interruption and that a local subsidiary of the Danish logistics company A.P. Moller-Maersk would run the facilities during the transition from CK Hutchison.
“Panama moves forward, its ports will continue operating without interruption, and we will continue serving the world at the logistics center of excellence that we are,” Mulino said in a recorded video address.
The court ruling followed a Panamanian government audit that found irregularities in a 25-year contract extension granted to CK Hutchison in 2021.
In Beijing, a Chinese Foreign Ministry spokesman called the impending takeover of the ports a violation of the rights and interests of Chinese companies.
“We’ve made clear China’s position on relevant ports in Panama. China will firmly safeguard the legitimate and lawful rights and interests of Chinese companies,” said spokesman Lin Jian.
U.S. President Donald Trump posted on social media in April 2025 that he had tasked Secretary of State Marco Rubio to “immediately” seek to solidify American control of the canal.
“American Ships, both Military and Commercial, should be allowed to travel, free of charge, through the Panama and Suez Canals!” Trump posted on Truth Social. “Those Canals would not exist without the United States of America.”
During his inaugural address in January 2025, Trump said, “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.”
Rubio posted on social media on Jan. 30: “The United States is encouraged by the recent Panamanian Supreme Court’s decision to rule port concessions to China unconstitutional.”
The Pentagon’s new national defense strategy mentions the canal as threatened and a target of a renewed Monroe Doctrine aimed at increasing American power and influence in the Western Hemisphere.
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