Panama cancels China-linked port deal, hands canal terminals to Maersk, MSC

The simmering dispute has become a geopolitical flashpoint between Washington and Beijing, with Panama caught in the crossfire.

Panama annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison in its official gazette Monday, transferring interim operations of the ports to Danish shipping giants A.P. Moller-Maersk and Swiss-based Mediterranean Shipping Co.

The notice formalized a Supreme Court ruling last month that the concessions for the Balboa and Cristobal terminals near the Panama Canal, which Panama Port Company, a subsidiary of CK Hutchison, had held for more than two decades, were unconstitutional.

The Panamanian government on Monday formally assumed control of the port facilities, including cranes, vehicles, computer systems and software under a decree aimed at ensuring uninterrupted operations until a new concession is awarded within 18 months.