Panama’s Supreme Court has canceled a concession that allowed Hong Kong-based CK Hutchison to operate ports at both ends of the Panama Canal. The ruling follows an audit that cited irregularities in a 25-year extension granted in 2021, sparking strong reactions from Hong Kong and drawing attention to the geopolitical stakes surrounding the strategic waterway.
Hong Kong Condemns the Decision
On Friday, Hong Kong’s government issued a statement saying it “firmly rejects” the court’s ruling. Officials criticized what they described as coercive and unreasonable measures by foreign governments in economic and trade relations, arguing the decision threatens the legitimate business interests of Hong Kong companies. The government warned that such actions could undermine international confidence in Hong Kong enterprises.
Strategic Concerns and US Involvement
The court’s ruling has wider geopolitical implications. The United States has long expressed concern about Chinese influence over the Panama Canal, treating port operations as a national security matter. While Panama insists that China has no role in canal operations, US officials, including Secretary of State Marco Rubio during his first overseas visit, have emphasized the strategic importance of the ports. Former President Donald Trump even suggested returning the canal to US control.
The court offered no guidance on what will happen next with port operations, leaving the situation unresolved.
CK Hutchison Faces Legal and Political Challenges
Panama Ports Company, the CK Hutchison subsidiary that runs the ports, said it had not yet been formally notified of the ruling. The company defended its concession as the result of transparent international bidding and warned that the decision threatens both its contract and the livelihoods of thousands of Panamanians who rely on port activity. It said it reserves the right to take legal action in Panama or abroad.
Complicating matters, CK Hutchison announced last year a deal to sell its majority stake in the Panamanian ports and other global holdings to a consortium including BlackRock. That deal stalled amid objections from Beijing, prompting the company to consider adding a Chinese investor to the consortium—a move seen by some as an attempt to appease China.
The episode highlights the delicate balancing act Hong Kong business leaders face as they navigate global commercial interests while managing Beijing’s expectations, particularly amid strained relations between China and the United States.
