Panama City: Panama’s President José Raúl Mulino has rejected warnings from China that the Central American nation would pay a ‘heavy price’ after a Hong Kong-based company lost its concession to operate two key ports on the Panama Canal.
In a post on social media, Mulino said he strongly opposed the Chinese government’s remarks, stressing that Panama respects the rule of law and the independence of its judiciary. His comments came after Panama’s Supreme Court ruled that a contract allowing Hong Kong-based CK Hutchison to manage two canal ports was unconstitutional.
Mulino emphasised that the court’s decision was made independently of the central government and said Panama’s Foreign Ministry would issue an official statement and take corresponding decisions in response to Beijing’s comments.
The ruling has intensified geopolitical tensions around the Panama Canal, a vital global trade route linking the Atlantic and Pacific oceans. CK Hutchison, through its subsidiary Panama Ports Company, had operated the ports of Cristobal on the Atlantic side and Balboa on the Pacific side since 1997. The 25-year concession was extended in 2021.
China’s Hong Kong and Macao Affairs Office criticised the Supreme Court decision as ‘absurd’ and ‘shameful,’ warning that Panama would face serious political and economic consequences. Beijing’s Foreign Ministry also accused the United States of acting with a ‘Cold War mentality,’ claiming Washington was undermining international law while pressuring Panama.
Tensions escalated last year after US President Donald Trump threatened to take control of the Panama Canal and called for the cancellation of CK Hutchison’s contracts. Following those threats, Panama’s comptroller general reviewed the concession and recommended it be annulled, arguing it conflicted with national interests, a position later upheld by the Supreme Court.
After the ruling, Panama moved swiftly to ensure continuity of operations, appointing Danish shipping giant Maersk to temporarily manage the port terminals until a new concession is awarded. The dispute has become a clear symbol of the growing rivalry between the United States and China for strategic influence and trade dominance in Latin America, with the Panama Canal once again at the centre of global power politics.
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