Panama seizes control of key canal ports from Hong Kong firm and entrusts them to global shipping leaders.
Panama’s government has ended long-term operating rights for two vital ports beside the Panama Canal, previously run by a CK Hutchison Holdings subsidiary. Published in the official gazette on Monday, the decision shifts temporary control to Denmark’s A.P. Moller-Maersk and Switzerland’s Mediterranean Shipping Company (MSC).
The move backs a Supreme Court ruling from last month that voided 25-year concessions for the Pacific-side Balboa and Atlantic-side Cristobal terminals. These sites process millions of containers yearly, fuelling about 5% of Panama’s GDP via logistics, according to World Bank figures.
Officials have assumed custody of equipment, vehicles, IT systems, and software to ensure smooth operations. New tenders will follow within 18 months, with APM Terminals handling Balboa and MSC’s Terminal Investment managing Cristobal.
CK Hutchison shares fell 0.9% at Tuesday’s Hong Kong open, despite a 20% yearly rise.
CNBC sought comments from CK Hutchison, Panama Ports Company, Maersk, and MSC without response.
Tensions stem from U.S. President Donald Trump’s 2025 claim that China was “running the Panama Canal.” CK Hutchison then planned a $23 billion sale of non-China ports to a BlackRock group, but Beijing called it “kowtowing” to U.S. pressure and blocked it.
The firm launched arbitration post-ruling, warning on 12 February that any steps by Maersk to operate without consent would trigger legal recourse. China cautioned Panama would “pay a heavy price both politically and economically.”
This aligns with U.S. efforts to limit Chinese sway over the canal, which carries 6% of global trade. Bloomberg notes Beijing has paused Panama projects and urged cargo reroutes, risking 10-15% cost hikes on key routes.
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