Trump’s threats to regain control of the Panama Canal have proven effective. Officially, the president of the Central American country responded by invoking national sovereignty and even denied reports suggesting the United States had been guaranteed free passage for its military vessels. However, Panama has informally conceded to Washington through two lawyers—Norman Castro and Julio Macias of the Castro y Castro law firm in Panama City—who, on 3 February 2025, filed a constitutional complaint against the port concessions awarded to Hong Kong’s terminal operator CK Hutchison Holdings. The company controls the Cristobal port on the Atlantic side and the Balboa port on the Pacific side through its subsidiary, Panama Ports Company.
Panama granted these concessions to the Chinese company in 1997, with an automatic renewal in 2021 extending them until 2047. According to most analysts, it is precisely this Chinese presence on both sides of Panama, just a few kilometres from the Canal’s entrances, that has triggered Trump’s aggressive stance. For now, the matter remains at the level of a legal complaint, with no decision yet made, but it clearly signals that Panama is yielding to Washington’s pressure.
The two lawyers argue that the concessions to CK Hutchison Holdings violate as many as ten articles of Panama’s Constitution, including the requirement for a public bidding process. They cite as precedent a 2023 case against First Quantum Minerals over the Cobre Panamá mining project. Moreover, they claim that the concession contract creates imbalances detrimental to the state, such as tax exemptions and unpaid social security contributions.
Shortly before this complaint was filed, Panama announced its withdrawal from China’s Belt and Road Initiative during a visit by US Secretary of State Marco Rubio. What is particularly noteworthy in this affair is not only that Panama has suddenly deemed the concessions unconstitutional eighteen years after approving them, but also that the Panamanian state itself holds a ten per cent stake in Panama Ports Company. It is also worth recalling that a constitutional challenge against the concessions was lodged at the outset, but they were upheld following a favourable opinion from the Attorney General’s Office.
CK Hutchison Holdings has so far maintained a low profile regarding this latest complaint. The company has refrained from commenting on the substance of the case or announcing any pre-emptive legal action. Instead, it has reaffirmed its adherence to Panama’s legal procedures and underlined the significance of the Balboa and Cristobal ports.
