Ban Chinese-linked operators from key Panama Canal ports, US envoy says

Speaking during a visit to Colon, Kevin Marino Cabrera criticised Panama Ports Company, a subsidiary of Hong Kong-based CK Hutchison, and said Washington supported efforts to replace it.

“Our position is that they are a bad operator. They have not done a good job,” Cabrera said. “It is a company of the Communist Party. We are enthusiastic that they will soon no longer be operating those ports.”

He added that any new operators should be reliable companies “committed to supporting the Panamanian people”.

Cabrera’s remarks followed a series of political and legal developments surrounding the 25-year concession renewal granted to Panama Ports Company in 2021.

In late July, Panamanian Comptroller General Anel Flores filed two lawsuits before the Panamanian Supreme Court seeking to annul the contract. The filings allege the renewal process violated constitutional procedures and included financial irregularities.

Panamanian President José Raúl Mulino gestures during a press conference in Panama City, Panama, in March. Photo: Reuters

Flores also accused the company of failing to pay nearly US$1.2 billion owed to Panama under the agreement. The concession covers the Balboa and Cristobal terminals, which are at the Pacific and Atlantic ends of the canal and handle a significant portion of Panama’s maritime traffic.

Also in late July, President Jose Raul Mulino said he did not support “the continuation” of the contract and raised the possibility of replacing the current model with a public-private partnership in which Panama would hold a controlling stake.

The dispute has added new uncertainty to CK Hutchison’s plan to sell its global port portfolio in a deal worth around US$23 billion.

The transaction, involving 43 ports worldwide, including those in Panama, was agreed to with a consortium led by BlackRock and the Mediterranean Shipping Company.

In March, China’s antitrust regulator announced a review of the deal, citing national interest. CK Hutchison later said it would bring in a strategic investor from mainland China to join the consortium, in a move widely seen as aimed at satisfying Beijing’s concerns.

Mulino’s proposal to restructure the port arrangement, however, has introduced further complications. Legal analysts have said shifting to a state-majority partnership would require congressional approval for financing and could delay implementation by up to 18 months.

Panama Ports Company said in a statement last week that engagement with the government was essential and that it would discuss the matter “at the appropriate time within the sale process”. The company called for dialogue and reiterated the importance of legal certainty and investor confidence.

Panama Ports holds 90 per cent of the concession, with the remaining 10 per cent owned by Panama’s government. According to company figures, it has invested more than US$1.69 billion in the country and paid US$126 million in dividends over nearly three decades.

The Balboa and Cristóbal ports handled nearly 40 per cent of Panama’s total container volume in 2024, according to the Panama Canal Authority.

Donald Trump goes light on China on Day 1, except where the Panama Canal is concerned

The issue forms part of a broader strategic competition between the United States and China in Latin America.

While Chinese investment in regional infrastructure has expanded during the past decade, Washington has increasingly raised concerns about what it sees as Beijing’s control over critical assets.

US President Donald Trump has repeatedly accused Panama of charging excessive tolls and has even suggested the US could demand to retake control of the canal, which it handed over in 1999.

Cabrera, a Cuban American from Miami, was confirmed as ambassador earlier this year. He previously served as a Miami-Dade County commissioner and directed Trump’s 2020 campaign in Florida.

After his nomination, he vowed to promote strong US-Panama ties and support “partnerships that serve both countries’ long-term interests”.

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