The United States is welcoming a landmark ruling by Panama's Supreme Court that voided long-standing port contracts tied to a China-linked company operating at the Panama Canal, calling the decision an affirmation of the rule of law and national sovereignty.
Kevin Cabrera, U.S. ambassador to Panama, praised the ruling in a statement Friday, saying it confirms that Panama's independent judiciary "enforces legal compliance, transparency, and public-interest obligations – holding all private operators accountable."
"This ruling strengthens Panama's national security and investment climate by boosting predictability, fairness, and legal confidence," Cabrera said. "Investors gain assurance that valid contracts are protected and improper ones corrected, making Panama more attractive for quality, long-term investment."
Cabrera added that the decision opens the door for reforms to port governance and competitive bidding.
"The decision enables a review of port governance and transparent, competitive processes to attract world-class investors that bring innovation, efficiency, quality jobs, and reinforce Panama's role as a leading logistics hub," he said. "We respect Panama's right to regulate and protect its critical infrastructure under its laws."
On Thursday, Panama's Supreme Court ruled unconstitutional two contracts signed in 1997 between the Panamanian government and Panama Ports Co. (PPC), a subsidiary of Hong Kong-based Hutchison Port Holdings.
The contracts granted PPC a 25-year lease to operate ports at Balboa and Cristobal, at opposite ends of the Panama Canal, and were automatically renewed for another 25 years in 2021.
PPC's control of the ports — which reportedly handle nearly 40% of container traffic through the canal — has long been cited as evidence of China's expanding influence over the critical global trade route.
The issue drew renewed attention after President Donald Trump raised concerns about Beijing's role in the canal ahead of his second term.
The ruling followed a yearlong legal review launched in February 2025, when Panama's attorney general cited serious irregularities in the contracts that gave PPC "disproportionate rights."
Panama's comptroller later accused the company of causing roughly $1.2 billion in damage.
Secretary of State Marco Rubio said the United States is "encouraged" by the ruling.
Chinese officials criticized the decision.
PPC said the ruling "lacks legal basis," while a Chinese Foreign Ministry spokesman warned that China "will take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies."
© 2026 Newsmax. All rights reserved.