Panama Weighs Control of Key Canal Ports

Panama's top court is about to decide who gets to run two ports that bookend one of the world's most strategic waterways—and the ruling could reverberate from Washington to Beijing. At issue is whether Hong Kong–based CK Hutchison can keep operating the container terminals of Balboa on the Pacific and Cristóbal on the Atlantic, prime hubs for traffic moving through the Panama Canal, which handles at least 5% of global trade, the Wall Street Journal reports.

• Panama's comptroller and private lawyers have asked the country's Supreme Court to void the company's concession, arguing it violates the constitution and has cost the government as much as $1.3 billion in lost revenue since Hutchison first won a 25-year license in the late 1990s. The contract was renewed for another 25 years in 2021, prompting a wave of lawsuits.

• The case is unfolding against a tense geopolitical backdrop, the Journal reports. The Trump administration has pressed Panama over Chinese involvement at the canal, with President Trump publicly musing about regaining US control.
• CK Hutchison, under heavy scrutiny from Washington, agreed to sell more than 40 ports worldwide—including the two Panamanian terminals, seen as the "crown jewels"—to a BlackRock- and Mediterranean Shipping–led group for nearly $23 billion.
• But Beijing objected, insisting that Chinese state-owned shipping giant Cosco receive a controlling stake and veto power in the new port company, a demand that has put the deal in jeopardy and clashes with Panamanian rules barring foreign state-owned operators from such licenses.

• Panama's government says it will implement whatever the court decides. If Hutchison's license is canceled, officials plan to install an interim operator and then rebid the ports, possibly separating them to boost competition. Hutchison, which calls the complaints politically motivated, is preparing to seek international arbitration if it loses that license. The court could also opt for a middle path: fines and corrective measures while allowing the company to stay at the helm of the ports.
• In an April visit to Panama, Defense Secretary Pete Hegseth vowed to "take back the Panama Canal from China's influence." CNBC reports that on the prediction market Kalshi, the odds that Trump will take control of the canal before his term is up have surged to over 35%.

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