Panama’s President José Raúl Mulino on Wednesday firmly rejected a warning from China that the country would pay a “heavy price” after a Hong Kong–based company lost its concession to operate two ports on the Panama Canal.
Writing on X, Mulino said Panama “strongly” rejects the statement issued by China’s Hong Kong and Macao Affairs Office, which came after Panama’s Supreme Court ruled that the port concession held by CK Hutchison was unconstitutional.
The court found that the contract showed a “disproportionate bias in favor of the company,” lacked proper justification, and caused detriment to the state treasury. The ruling effectively invalidated Hutchison’s long-standing management of the Cristobal port on the Atlantic side of the canal and the Balboa port on the Pacific side.
China reacted angrily to the decision. On its WeChat account, the Hong Kong and Macao Affairs Office accused Panama of yielding to external pressure, according to Bloomberg, and warned that continuing on this path would result in serious political and economic consequences.
Mulino dismissed the warning, stressing that Panama is a country governed by the rule of law and that its judiciary operates independently of the executive. He said the foreign ministry would issue a formal response and take “corresponding decisions.”
The United States welcomed the Supreme Court’s ruling. Former US President Donald Trump had previously increased pressure on Panama to cancel Hutchison’s contract, threatening to reclaim control of the US-built canal over what he described as excessive Chinese influence. The canal handles roughly 40 percent of US container traffic.
CK Hutchison has operated the two ports since 1997, and its concession was extended for 25 years in 2021. Following Trump’s threats, Panama’s independent comptroller general reviewed the agreement and recommended its annulment, a view later upheld by the Supreme Court.
In the interim, the Panamanian government has appointed Danish shipping giant Maersk to temporarily manage the terminals until a new concession is awarded.
China’s foreign ministry spokesman Lin Jian reiterated Beijing’s stance that it would “firmly defend the legitimate and lawful rights and interests” of Chinese companies. He accused the United States of acting with a “Cold War mentality and ideological bias,” arguing that Washington was undermining international law while claiming to defend it.
The court ruling also comes as Hutchison’s attempt to sell its port assets remains stalled. In March, the company announced plans to transfer its stake in the Panamanian terminals to a consortium led by US investment firm BlackRock as part of a $22.8-billion deal. While initially welcomed in Washington, the transaction lost momentum after China warned it could harm Beijing’s global interests and urged caution, hinting at possible legal consequences.
The dispute has become a symbol of intensifying geopolitical competition between the United States and China for trade and strategic influence in Latin America.
