By Owen Evans

Hong Kong-based CK Hutchison Holdings’ concession to operate ports at the Panama Canal has been ruled unconstitutional.

Panama’s Supreme Court ruled late on Jan. 29 that it was unconstitutional for the company, which has complex ties to the Chinese Communist Party (CCP), to operate two ports at either end of the canal.

“These laws and acts under challenge relate to the concession contract between the State and Panama Ports Company S.A. for the development, construction, operation, administration, and management of the terminals at the ports of Balboa and Cristobal,” the court said, according to Spanish news agency Agencia EFE.

U.S. Secretary of State Marco Rubio said in a post on X on Jan. 30 that the United States was “encouraged by Panama’s Supreme Court ruling that port concessions linked to China were unconstitutional.”The move advances a U.S. aim of blocking Beijing’s influence over the strategic waterway.

Panamanian President José Raúl Mulino said in a video address that the ports will continue operating without interruption during the legal transition, with Panama’s Maritime Authority working alongside the current operator. Once the concession is formally ended, a local unit of A.P. Moller-Maersk will operate the ports on an interim basis until a new concession is awarded.

The court’s ruling followed an audit by Panama’s comptroller, which alleged irregularities in the 25-year extension of the concession granted in 2021.

The court’s brief statement provided no guidance on what would happen to the ports going forward.

Last year, CK Hutchison agreed to transfer the concession as part of the global sale of more than 40 ports for around $23 billion to a consortium led by U.S. asset manager BlackRock, a transaction that has been stalled by China amid a geopolitical dispute with the United States.

A Heritage Foundation report from September 2025 said that a “successful completion of this deal would jeopardize a decade-long Beijing strategy to control strategic ports,” which “enraged the Chinese government.”

It noted that on July 31, 2025, a spokesman for China’s Ministry of Commerce announced that Beijing would oversee any sale of the port and that, consequently, a definitive agreement had not yet been reached.

Last year, President Donald Trump said he wanted to return the Panama Canal, one of the world’s most strategic shipping routes, which carries around 5 percent of global trade, to U.S. control.

“American ships are being severely overcharged and not treated fairly in any way, shape, or form, and that includes the United States Navy,” Trump said during his 2025 inaugural address on Jan. 20. “And above all, China is operating the Panama Canal.”

In 1977, President Jimmy Carter signed a treaty with Panamanian leader Omar Torrijos to return control of the canal to Panama.

China denies control over the canal, though it has built significant influence in the region. Panama has said the canal will remain in Panamanian hands.

Hutchison Ports, a subsidiary of CK Hutchison Holdings, is controlled by the family of Hong Kong billionaire Li Ka-shing and operates 53 ports across 24 countries, including the UK, Germany, South Korea, Spain, and Hong Kong.

The company first won 25-year concessions to operate one port at each end of the canal in 1997, the same year Britain relinquished control of Hong Kong and handed it over to Beijing. Those concessions were renewed in 2021 for another quarter century.

In a statement on Jan. 29, CK Hutchison Holdings said the ruling lacks “legal basis.”

It claimed that it also “jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country.”

Congressman Rep. Carlos A. Gimenez (R-Fl.), who sits on the Armed Services Committee, the Homeland Security Committee, and the Select Committee on China, wrote on X on Jan 30: “Communist China has been kicked out of the Panama Canal.

“The Western Hemisphere must be the hemisphere of freedom. The regime in Beijing has no place here.”

Guy Birchall and The Associated Press contributed to this report.