Beijing-linked conglomerate loses two strategic terminals as US-China rivalry reshapes global trade
Panama Takes Control of Two Canal Ports From Hong Kong Giant CK Hutchison
In a dramatic escalation of geopolitical tensions surrounding one of the world’s most vital shipping corridors, Panamanian authorities physically seized control of two strategic Panama Canal ports on February 24, 2026, removing employees of Hong Kong conglomerate CK Hutchison from the Balboa and Cristobal terminals and handing temporary operations to Danish shipping giant Maersk and Geneva-based Mediterranean Shipping Company (MSC).
The takeover follows a ruling by Panama’s Supreme Court in late January declaring CK Hutchison’s concession contracts unconstitutional, a verdict that became legally binding when published in Panama’s official gazette on February 24. CK Hutchison’s subsidiary, Panama Ports Company (PPC), had operated both terminals for nearly three decades under concessions most recently renewed in 2021 for another 25 years.
Employees Threatened With Criminal Prosecution
CK Hutchison said in a statement to the Hong Kong Stock Exchange that Panamanian authorities made “direct physical entrance” into both terminals and assumed administrative and operational control. Company staff were told to leave immediately and threatened with criminal prosecution if they refused to comply or attempted to maintain contact with the firm.
The company called the entire process unlawful, saying the court ruling, the executive decree, the termination of PPC’s concession, and the physical takeover all violated its legal rights. CK Hutchison said it was consulting legal counsel on pursuing national and international legal remedies against Panama and third parties involved in the transition.
Panama Maritime Authority Steps In
The Panama Maritime Authority (AMP) was authorized by government decree to occupy the ports for reasons of “urgent social interest,” granting it control over port property including computer systems and cranes. The government approved two temporary concession contracts lasting up to 18 months: APM Terminals Panama, a Maersk subsidiary, will run operations at Balboa, while TIL Panama, part of MSC, will manage Cristobal. APM Terminals confirmed it had begun temporary operations at Balboa on February 24.
Panama’s President Jose Raul Mulino addressed the nation in a televised statement, insisting the arrangement did not constitute an expropriation of assets. He said the temporary contracts were a legitimate tool to ensure port operations continued while the state developed a new competitive concession framework. Neither employment nor port operations would be disrupted, he said.
The Geopolitical Context: Trump, Beijing, and the Canal
The seizure is the culmination of a year-long saga that has seen CK Hutchison trapped in a three-way power struggle between Washington, Beijing, and Panama City. Since returning to the White House in January 2025, US President Donald Trump has repeatedly alleged that China effectively controls the Panama Canal through its companies and vowed to “take it back.” The canal carries approximately 5 percent of all global maritime trade, making it one of the most strategically critical chokepoints on earth.
Beijing and its Hong Kong liaison office responded furiously to the original Supreme Court ruling in January, with China’s Hong Kong and Macao Affairs Office describing it as “absurd” and “shameful” and warning Panama it would face “heavy prices both politically and economically.” President Mulino fired back, saying Panama upholds the rule of law and that its judiciary operates independently of the central government. Understanding how Beijing uses commercial entities as tools of geopolitical influence is explored in depth by Carnegie Endowment research on Chinese foreign policy.
A $23 Billion Deal in Jeopardy
The forced handover also threatens to derail CK Hutchison’s proposed $23 billion sale of dozens of ports worldwide, including the Panamanian terminals, to a consortium led by BlackRock and MSC. That deal, which would have represented one of the largest port asset transactions in history, now faces significant legal uncertainty as the ownership and operational status of the Balboa and Cristobal terminals remain contested.
CK Hutchison shares fell 1.9 percent on the Hong Kong Stock Exchange on February 24 as markets absorbed the news. Hong Kong’s broader Hang Seng Index was also down 1.9 percent on the day.
Hong Kong Government Protests, But Has Little Leverage
The Hong Kong government issued a statement expressing strong dissatisfaction with Panama’s decision, urging Panamanian authorities to respect the spirit of contracts and ensure a fair business environment for Hong Kong companies operating abroad. The statement carried little weight in a dispute being settled by much larger powers in Washington and Beijing. Council on Foreign Relations has tracked the growing contest over canal influence since Trump first raised the issue in late 2024.
For democracy advocates in Hong Kong, the episode illustrates the dangers of operating in a global system where the territory’s commercial interests are increasingly hostage to decisions made in Beijing. Hong Kong’s businesses built their international reputations on the rule of law and respect for contracts – precisely the values that Beijing’s interference in the territory’s own legal system has systematically eroded since the 2020 National Security Law. The irony that CK Hutchison is now invoking rule of law protections in Panama while those same protections have been gutted at home was not lost on observers.
What Comes Next
CK Hutchison has notified Panama of an investment-protection treaty dispute and signaled it will pursue all available legal avenues at both national and international levels. The company also previously warned that any takeover by APM Terminals Panama would result in legal action against that company unless done in agreement with PPC. Legal experts say international arbitration proceedings of this complexity can take years to resolve, during which time the operational and commercial reality on the ground will likely be shaped by whoever holds physical control of the terminals. For background on investment treaty arbitration, the World Bank’s ICSID remains the leading forum for such disputes. The Panama Canal saga is far from over, and every development will continue to reverberate across global shipping markets and the US-China rivalry for decades to come.
Ho Yi Lam
Youth Affairs & Education Journalist, Apple Daily UK
Contact: hoyi.lam@appledaily.uk
Ho Yi Lam is a youth affairs and education journalist with professional experience covering student movements, higher education policy, and generational change within Chinese-speaking communities. She received her journalism training at a top-tier Chinese journalism school, where she specialized in education reporting, interview methodology, and media ethics, with an emphasis on public-interest journalism.
Her reporting career includes work with Apple Daily and other liberal Chinese newspapers, producing coverage on campus governance, academic freedom, curriculum reform, and youth civic engagement. Ho Yi’s journalism is grounded in firsthand interviews with students, educators, and policy experts, supported by careful review of official documents and research data.
She has worked in newsroom environments where education reporting intersects with political sensitivity, giving her practical experience in source protection and verification. Editors value her ability to present complex institutional issues clearly while maintaining factual accuracy.
Ho Yi’s authority is built through consistent publication within reputable media outlets and adherence to editorial standards, including transparent sourcing and correction protocols. At Apple Daily UK, she delivers reliable, experience-driven education journalism that informs readers through evidence-based reporting and professional integrity.
