This aerial view shows a cargo ship sailing out of the Panama Canal on the Pacific side in Panama City on October 6, 2025.<\/p>\n
Martin Bernetti | Afp | Getty Images<\/p>\n
Panama annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison in its official gazette Monday, transferring interim operations of the ports to Danish shipping giants A.P. Moller-Maersk and Swiss-based Mediterranean Shipping Co.<\/p>\n
The notice formalized a Supreme Court ruling last month<\/a> that the concessions for the Balboa and Cristobal terminals near the Panama Canal, which Panama Port Company (PPC), a subsidiary of CK Hutchison, had held for more than two decades, were unconstitutional.<\/p>\n The Panamanian government on Monday formally assumed control of the port facilities, including cranes, vehicles, computer systems and software under a decree aimed at ensuring uninterrupted operations until a new concession is awarded within 18 months. <\/p>\n Under the interim arrangement, APM Terminals, a unit of Maersk, will operate the Balboa port on the Pacific side of the canal, while MSC\u2019s port operating subsidiary, Terminal Investment, will run the Cristobal port on the Atlantic side.<\/p>\n Shares of CK Hutchison<\/a> fell 0.9% at the open Tuesday. The stock has climbed over 20% so far this year.<\/p>\n In a statement to CNBC Tuesday, CK Hutchison said PPC had ceased all operations at the terminals on both sides of the canal on Monday, while describing the executive decree \u201cunlawful.\u201d <\/p>\n The Hong Kong conglomerate said it would continue to consult legal advisors regarding the ruling and takeover.<\/p>\n CNBC reached out to Maersk and MSC\u00a0for comment but did not receive a response by publication.<\/p>\n The\u00a0simmering dispute<\/a>\u00a0has become a geopolitical flashpoint between Washington and Beijing, with Panama caught in the crossfire.<\/p>\n After U.S. President Donald Trump alleged last year that China was \u201crunning the Panama Canal,\u201d CK Hutchison negotiated a $23 billion deal with a BlackRock-led consortium to sell its non-Chinese port assets. Beijing swiftly intervened, describing the sale as \u00a0\u201ckowtowing\u201d<\/a>\u00a0to American pressure and stalling the transaction. <\/p>\n The Hong Kong conglomerate has pushed back since the ruling last month and initiated arbitration proceedings<\/a> against Panama. On Feb. 12, CK Hutchison said that \u201cany steps\u201d that Maersk or its subsidiary takes to operate the ports without its agreement will likely \u201cresult in legal recourse.\u201d <\/p>\n Beijing also warned that the Central American country will \u201cpay a heavy price both politically and economically\u201d unless it changes course.<\/p>\n The Panama court\u2019s ruling was seen as a major victory for the U.S., given that the White House has made\u00a0blocking China\u2019s influence<\/a>\u00a0over the global trade artery one of its top priorities. <\/p>\n