Panama canal ports become new battleground between China and America

Tensions between China and the United States are escalating around port infrastructure at the Panama Canal, one of the world’s most critical maritime chokepoints handling nearly 5% of global trade.

The dispute intensified after Panama’s Supreme Court in January 2026 annulled the concession held by Panama Ports Company, a subsidiary of Hong Kong–based CK Hutchison, which had operated the Balboa and Cristóbal terminals at the Pacific and Atlantic entrances of the canal. The concession had been extended in 2021 for 25 years until 2047.

Following the ruling, Panama transferred operational control of the terminals to APM Terminals, part of the Maersk Group, while CK Hutchison initiated international arbitration seeking $2 billion in compensation.

The conflict also intersects with a proposed $22.8 billion global port asset sale by CK Hutchison to a consortium led by BlackRock and MSC’s Terminal Investment Limited, a deal viewed in Beijing as increasing US influence over canal infrastructure.

Amid the dispute, China’s COSCO Shipping suspended operations at Balboa port, signalling rising geopolitical pressure on maritime logistics around the Panama Canal.