China Vows ‘necessary action’ After Panama Court Rules Chinese-Linked Canal Port Concessions Unconstitutional

China on Friday warned it would take “necessary measures” to protect the interests of its companies after Panama’s Supreme Court ruled that Chinese control of key ports linked to the Panama Canal was unconstitutional, escalating tensions around one of the world’s most strategic waterways.

Late on Thursday, Panama’s top court annulled the concession held by Hong Kong-based CK Hutchison Holdings to operate container ports at both the Pacific and Atlantic entrances of the canal. The ruling followed an audit by Panama’s comptroller that raised concerns over the legality of a 25-year extension of the concession granted in 2021.

“The Chinese side will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” Chinese Foreign Ministry spokesman Guo Jiakun said at a regular press briefing in Beijing. He did not specify what steps China might take in response to the ruling.

The ports are operated by Panama Ports Company (PPC), a subsidiary of CK Hutchison. In a statement, PPC defended the concession as the product of a transparent international bidding process and said the court’s decision lacked legal foundation.

“The new ruling jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity,” the company said. It added that the decision undermined the rule of law and legal certainty in Panama.

PPC has operated the two container terminals since the 1990s. The facilities are separate from the operation of the canal itself, which is run by the Panama Canal Authority, a Panamanian state entity.

The court’s decision is likely to be welcomed in Washington, where curbing China’s influence over the Panama Canal has emerged as a strategic priority. The issue has taken on heightened significance under President Donald Trump, who has repeatedly framed Chinese involvement in regional infrastructure as a national security concern.

Panama was the first overseas destination visited by US Secretary of State Marco Rubio after taking office, underscoring the importance Washington places on the canal and surrounding infrastructure. In early 2025, Trump publicly called for the United States to “reclaim” control of the vital shipping route, citing China’s growing footprint in the region.

Panama’s government rejected those remarks at the time, stressing that the canal’s sovereignty was not open for debate. Officials reiterated that the waterway is operated by Panama and will remain under Panamanian control, even as scrutiny over foreign-linked port concessions intensifies.