Panama Seizes China-Linked Ports Amid Trump-Beijing Dispute

Panama published a Supreme Court decision, issued in late January, that voided key port operations held by Hong Kong-based CK Hutchison. The Balboa and Cristobal terminals have become entangled in a legal dispute involving Washington and Beijing. The timing is important, as it comes about a month before President Trump’s planned late-March trip to China.

On Monday, the ruling authorized the Panama Maritime Authority to take over the Balboa and Cristobal terminals near the Panama Canal, ending concessions held by Panama Ports Company (PPC), a CK Hutchison subsidiary, for more than two decades.

The ruling stated that the Panama Maritime Authority will occupy both ports for “reasons of urgent social interest” and take control of all cranes, vehicles, computer systems, and software.

CK Hutchison said Panama’s move was “unlawful” and threatened national and international legal action against the country, which controls the 50-mile man-made maritime chokepoint connecting the Atlantic and Pacific Oceans, allowing more than 13,000 ships to transit annually.

“CKH considers the ruling, the executive decree, the purported termination of PPC’s concession, and the takeover of the terminals to be unlawful,” CK Hutchison said in a statement to the Hong Kong Stock Exchange, adding, “The actions by the Panama State also raise serious risks to the operations, health and safety at the Balboa and Cristobal terminals.”

Hong Kong-listed shares of CK Hutchison closed down 2.7% following the court-ordered takeover. Shares year-to-date have gained about 18%, according to Bloomberg data.

Following the move, Danish shipping company Maersk and Geneva-based Mediterranean Shipping Company were granted temporary licenses to operate both terminals.

In a statement to CNBC, Maersk said temporary operations at the Port of Balboa have already begun and will continue for a period of 18 months.

“One of the main tasks will be the deployment of a new terminal operating system and training the workforce to use this new system,” Maersk said

The saga surrounding the Balboa and Cristobal terminals comes as the Trump administration pursues a Western Hemisphere defense posture, repositioning the Department of War to secure the region and curb the influence of Chinese and other foreign adversaries across the Americas. This also includes purging the region of communist and socialist regimes.