Secretary of State Rubio said the decision was encouraging, as it drew support on Capitol Hill and unease among Chinese-linked firms
Washington on Friday welcomed a Panamanian court ruling cancelling a contract held by a subsidiary of Hong Kong-based CK Hutchison Holdings to operate two ports along the Panama Canal, a decision seen as a boost to the United States’ efforts to counter Chinese influence in the western hemisphere.
The reaction came as Panama’s government sought to reassure workers and investors on the ground that trade and jobs would not be affected.
“The United States is encouraged by the recent Panamanian Supreme Court’s decision to rule port concessions to China unconstitutional,” US Secretary of State Marco Rubio said in a social media post.
Rubio, a former lawmaker and a key adviser to US President Donald Trump on western hemisphere policy, has repeatedly warned that if a company answerable to the Communist Party were to control ports at both ends of the Panama Canal, it could effectively shut down the waterway during a conflict.
During his Senate confirmation hearing in 2025, he described such a scenario as a “direct threat” to US interests, warning that Beijing could use the facilities as strategic “choke points”.
Rubio’s remarks on Friday were echoed by Republican lawmakers, who framed the ruling as a strategic win for Washington.
The House Select Committee on China chairman John Moolenaar, a Republican from Michigan, described the court verdict as a “win for America”, reiterating the canal’s “importance for national security and the world economy” and thanking Trump for his leadership.
“China’s malign influence is unwelcome in the western hemisphere and it is critical that all ports on the canal be entrusted to operators who share our common values and commitment to continued cooperation with both the US and Panama,” he said in a statement.
Other Republican lawmakers quickly followed suit, arguing that the ruling validated the Trump administration’s pressure campaign, as some analysts emphasised that it underscores that Beijing’s influence in the region was not irreversible.
“For years, Beijing expanded its influence through opaque contracts and coercion. That era is over. American leadership is back, and this administration is securing our hemisphere. The Panama Canal is not China’s backyard, and never will be,” Maria Elvira Salazar, a Republican House representative from Florida, said.
“The court’s ruling will be read in Washington as proof positive that sustained pressure pays off,” she added.
Representative Nathaniel Moran, a Republican from Texas, warned that “as Panama’s top trading partner, the US must maintain strong relations with Panama and prevent Chinese influence in the region” as he thanked Trump for putting “America’s interests first”.
Beijing and Hong Kong have condemned the latest ruling as coercive and politically driven.
Craig Singleton, director of the China Program at the Foundation for Defense of Democracies, a think tank in Washington, contended that decisions like Panama’s “are likely to reinforce Trump’s view that Chinese influence in the hemisphere is reversible”.
He said that the ruling could encourage “further challenges in places where legal, political or regulatory pressure can be brought to bear”.
Singleton added that in places where “those tools do not exist, expect the administration to lean towards more coercive instruments to force outcomes, as recent moves on Cuba suggest”.
Singleton noted that CK Hutchison Holdings cannot appeal the Panama Supreme Court ruling, but said the company could “seek clarifications” that might delay the contract’s termination. It has already indicated it may pursue international legal remedies and arbitration.
“This is the cleanest off-ramp for Beijing: drag things out, raise uncertainty for bidders, and try to stretch the final decision timeline beyond Trump’s term in office,” Singleton said.
While Washington weighed the broader implications of Panama’s decision, authorities in Panama City moved to reassure workers and investors that the Supreme Court ruling would result in an orderly legal transition without disrupting trade or employment at two of the country’s most strategic ports.
President Jose Raul Mulino on Friday reiterated the importance of the ports of Balboa and Cristobal, calling them “strategic pillars of the national economy and a key link in international commerce”.
The president described the ruling as a decision requiring “close and careful attention”.
“This is a decision of impact,” Mulino told reporters, stressing that the government’s focus would be on protecting a national asset rather than rushing headlong into changes.
Mulino announced the appointment of Alberto Aleman Zubieta as coordinator of a technical team tasked with overseeing all matters related to the ports during the transition.
According to the president, the group will bring together the relevant state bodies for a smooth changeover.
“Until the ruling becomes final, there will be a period of continuity with the current operator, with no operational changes,” he said.
“After that, a transition period begins, which concludes with a new concession under terms and conditions favourable to our country.”
The president emphasised that he had instructed the Maritime Authority of Panama to coordinate immediately with the current operator so that port activities continue without interruption.
“There will be no improvisation,” Mulino added, noting that the labour ministry would oversee the process.
Addressing workers directly, the Panamanian president also sought to ease concerns about job security at the ports, saying their “source of work is the most important asset of our terminals and it is guaranteed. There will be no lay-offs.”
Labour stability quickly became a focal point locally following the ruling by the Supreme Court of Justice of Panama, which also invalidated amendments and an extension linked to the original concession.
“What concerns us most as a union is job stability, because that is what is at stake,” said Reginaldo Churche, secretary general of the union representing most workers at both ports controlled by CK Hutchison.
He acknowledged that similar disputes affect ports globally, but stressed that local conditions were the priority.
Churche confirmed that a delegation from the labour ministry was already at Panama Ports Company’s offices as part of the post-ruling process.
Mulino also disclosed that preliminary contacts had been made with companies in the port sector, highlighting discussions with APM Terminals, which has expressed a willingness to operate the ports on a temporary basis if required.
The firm, a subsidiary of the Danish shipping group Maersk but headquartered in The Hague, the Netherlands, is no stranger to canal-related business.
In April, APM acquired the Panama Canal Railway Company from Canadian Pacific Kansas City Limited and the US-based Lanco Group/Mi-Jack.
At the time, it said in a statement that the acquisition was driven by its potential economic impact, describing the railway as “an attractive infrastructure investment in the region aligned to our core services of intermodal container movement”.
In a statement on Friday, APM Terminals said any involvement would be “strictly transitional, aimed at safeguarding continuity in essential services for global trade”.
The company emphasised that it is not part of the legal proceedings and would only act once the court ruling becomes final and in full compliance with Panamanian law.
