The Supreme Court in Panama has ruled that the terms under which CK Hutchison, a Hong Kong-based multinational, was granted a 25-year concession renewal to run two ports on either side of the Panama Canal are unconstitutional.
The company’s ties to Beijing had become sticking point for the US, making the ruling a win for US President Donald Trump, who has long espoused his ambition to restore US ownership of the Panama Canal.
The decision comes after a year-long saga that began in January 2025, when the Panamanian Government launched an audit of Hutchison. The audit appeared to be a response to comments from Trump warning that Hutchinson’s ties to China presented a national security threat. The audit found $1.3bn in federal revenue losses since Hutchison began operating the ports in the late 1990s, prompting a lawsuit against the company from the country’s comptroller-general.
Last year, Hutchison announced it would sell 43 ports across 23 countries, including the two in the Panama Canal, to a group led by US investment firm BlackRock that includes Swiss container shipping operator MSC. China created many obstacles to the sale, including threatening to block it if state-owned shipping operator Cosco did not get a stake. Panama does not allow state-owned companies to have majority stakes in ports.
Hutchinson’s sales complicated by geopolitics
Earlier this week, there were reports about Hutchison splitting its ports into separate groups with different structures to facilitate their sale. One group would give Cosco a larger stake in ports located in regions more geopolitically aligned with China, such as Africa. The other would give higher stakes to Western companies such as BlackRock or the Italian operator Terminal Investment, and focus on other locations.
Hutchinson operates five other container terminals in the region – four in Mexico and one in the Bahamas.
“From a national security perspective, the Trump administration could push for majority stakes in these facilities to also be sold to Western firms,” writes Grace Fan, managing director of global policy and disruptive themes research at consultancy TSLombard, in a note. “Alternatively, it could pressure the Mexican Government to revoke these concessions, taking a leaf out of its Panama playbook.”
Other ports in the region with ties to China are likely to also face US pressure. Fan notes that, generally, “the closer the ports are geographically to the US, the more dependent they are on US trade and foreign direct investment; and the more leverage the White House has to pressure regional governments to de-risk from China.” One example is Jamaica’s Kingston port, which is 100% operated by a Chinese state-owned company.
De-risking from China
Panama has been de-risking from China in the past year. Once the first country in Latin America to join China’s flagship infrastructure programme, the Belt and Road Initiative, it left early in 2025. It has allowed US troops to conduct military exercises in the country, accepted deportation flights and announced plans for further port terminals in the Panama Canal with contracts that could be awarded to US-linked companies.
The port represents a win for the ‘Donroe’ doctrine, and also a playbook with which the Trump administration may pursue its goal of pushing China-linked companies out of managing strategic projects in the Western Hemisphere.
