Panamanian Supreme Court Rules Chinese Holding on Canal “Unconstitutional”

MIAMI - The Panamanian Supreme Court on Thursday ruled that a Hong Kong-based firm’s contracts to oversee key ports located on both sides of the Panama Canal are “unconstitutional.”

The court’s ruling finds the laws that underpinned concession contracts between C.K. Hutchinson, a Hong Kong-based multinational conglomerate registered in the Cayman Islands, and the Panama Ports Company (PPC), to operate two port terminals on the Panama Canal, violated the Central American nation’s constitution.

The Canal has emerged as a hot-button issue for the increasingly nationalist Trump administration, as the White House seeks to restore its influence over the strategic transit hub and throughout greater Latin America.

In 1979, U.S. President Jimmy Carter signed the Torrijos-Carter Treaties to transfer ownership of the property to Panamanian authorities. On Dec. 31, 1999, the transfer was completed, with the Panama Canal Authority (ACP) charged with overseeing the Canal’s maintenance and operations.

The Hong Kong government rejected the court’s ruling, expressing its opposition to foreign coercion to interfere with the Hong Kong-based company’s enterprises.

The PPC, which is also a subsidiary of C.K. Hutchinson, stated after the ruling that it had not been notified about the decision and insisted its concession was the result of transparent international bidding.

President Trump, however, since retaking the White House in January 2025, has long argued the strategic importance of regaining influence over the Panama Canal, which is responsible for facilitating 5% of global maritime trade.

The Trump administration’s move to expel Chinese influence in Latin America is part of the president’s broader national security strategy to refocus U.S. military and economic interests to the Western Hemisphere as the U.S. draws down its affairs in the Middle East after more than two decades of conflict in the region.

Secretary of State Marco Rubio wrote on X, stating that the United States is “encouraged by the recent decision.” Rubio is also eyeing a potential regime change in Havana following the U.S. capture of former Venezuelan dictator Nicolás Maduro.

Washington’s campaign to reassert pressure to regain influence over the Canal has also helped arouse a Panamanian nationalist response to “U.S. interference” on Panamanian territory, with frequent anti-U.S. protests occurring outside the canal-zone area in recent months.

Panamanian President José Raúl Mulino said on Friday that until the court’s ruling was executed, maritime officials would be authorized to work with the PPC to ensure that operations continue.