The US attempt to bring global ports under Western control in order to squeeze Beijing looks dead in the water. Despite Trump’s bluster, China quietly shut the scheme down. We’ll detail how they did so, but first the relevant background.
Hong Kong-based CK Hutchison Holdings in March announced that it was selling all its overseas ports, including two at the Panama Canal, to a consortium led by BlackRock in a deal worth $23 billion. BlackRock was to take control of the two in Panama while the Italian tycoon-controlled Mediterranean Shipping Company controlled the others.
It was sold as a major win for Washington on the geopolitical chess board—one that could raise prices on or refuse Chinese ships or allow the US to militarize the ports and use them to enact a maritime blockade of China at critical chokepoints.
During his inaugural address, President Donald Trump said of the Panama Canal, “We gave it to Panama, and we’re taking it back.”
Well, okay. But on July 27, the deadline to finalize the deal passed without anyone signing on the dotted line.
That’s because Beijing saw the Trump administration conspiring with the takeover consortium while applying pressure on Hutchison and said two can play at that game. Beijing responded by launching a regulatory review of the deal —although the company’s base is in Hong Kong and there aren’t direct Chinese assets involved in the sale — and said the deal shouldn’t be implemented without its approval. If that warning wasn’t clear enough, the family of Hutchison founder Li Ka-shing, the ninety-six-year-old billionaire who was knighted by Queen Elizabeth in 2000, saw their business empire come under pressure. From Bloomberg:
Younger son Richard’s talks to expand his insurance business into mainland China have stalled after the ports deal upset Beijing, Bloomberg reported earlier this month. That followed another Bloomberg report in March that China told its state-owned firms to hold off on any new collaboration with businesses linked to the Li family.
The ports deal is now fully wrapped up in the ongoing trade and other tensions between Beijing and Washington. That’s a game that even Politico admits the US is losing—and badly, largely driven by Washington delusions:
Panama isn’t 1989. There’s no Noriega to oust. There’s no Cold War to rally around. Today, China funds the projects. China builds the rails. China moves the cargo. (5/11)
— William Huo (@wmhuo168) July 29, 2025
What Trump revealed in Panama was the depth of his illusion. He thinks he’s Machiavelli. In reality, he’s a failed landlord trying to evict China from global trade routes it already owns. (10/11)
— William Huo (@wmhuo168) July 29, 2025
What Now?
It looks like China will get its way. Here’s Bloomberg:
CK Hutchison Holdings Ltd. said it may invite a “major strategic investor” from China to join a group seeking to buy its global ports, as the Hong Kong-based company works toward a solution that pleases all in the geopolitically-sensitive deal.
The unnamed investor would join as a significant member of the consortium, the company said in a stock exchange filing Monday, hours after the expiry of a 145-day exclusive talks window with the group backed by American asset manager BlackRock Inc.
Will Trump still try to sell it as a major victory “retaking” Panama Canal? One would guess so, although he might have to wait a while.
Lau Siu-kai, a consultant for the semi-official Chinese Association of Hong Kong and Macau Studies think tank, told the South China Morning Post that he expected the deal deadline to be extended with China’s state-owned enterprise China Cosco Shipping Corporation potentially joining the consortium.
The bottom line is that if China opposes the deal, it is “highly likely to be called off”.
“If Cosco has some form of ownership and decision-making power in the ports’ future operations, ensuring that Chinese cargo ships and shipping companies are treated fairly and not discriminated against, then China’s key interests would be protected, and it would give the transaction a green light,” Lau said.
Or as Bloomberg puts it:
Challenges remain even as Cosco enters the discussions, David Blennerhassett, an analyst at Quiddity Advisors, wrote on financial analysis platform SmartKarma. That could reverse the current rhetoric and upset Trump, who has a handful of issues already on his plate, he said.
No doubt. Cosco joining the consortium defeats the whole purpose of the deal Washington was supporting. Here’s the Hong Kong and Macao Affairs Office of the State Council of China strongly-worded comment on the matter a few months back, and it’s hard to disagree with its argument that the proposed transaction was not an “ordinary commercial activity,” but rather a hegemonic act in which the US was employing state power—through coercion, pressure, and inducements—to seize the legitimate rights and interests of another country. Here’s more:
Once the Panama Canal is “Americanized” and “politicized,” the United States will undoubtedly use it for political purposes to advance its own political agenda, and China’s shipping and trade will inevitably be controlled by the US. If the United States were to implement measures such as selective capacity restrictions or imposing “political surcharges,” Chinese companies’ logistics costs and supply chain stability would face great risks. Some netizens also noted that through this deal, BlackRock would control about 10.4% of the world’s container terminal throughput, joining the ranks of the world’s top three port operators, and it is entirely possible that it would work in concert with US policies to suppress China, raising costs for Chinese cargo and squeezing the market share of Chinese shipping companies.
Moreover, this transaction creates a major gap in the port network that Chinese companies have built up over the years, thereby allowing American interests to erode their overseas development advantages. Other netizens even point out that the United States might use this transaction as a “template” to spark a wave of port mergers and acquisitions worldwide through political pressure, thereby controlling more critical ports globally and employing “long-arm jurisdiction” to suppress China, leaving Chinese vessels with “no reliable haven.”
This is by no means mere fearmongering. According to a draft executive order from the US government, plans are already underway to charge Chinese vessels special docking fees, and the US will urge its allies to take similar measures, otherwise facing retaliation. If all of the United States’ calculated moves succeed, they will undoubtedly impact China’s shipbuilding, shipping, foreign trade, and even the Belt and Road Initiative, and will directly affect Hong Kong’s efforts to consolidate and elevate its position as an international shipping and trade center, while threatening and undermining the normal global order and safety of shipping and trade.
So it’s unsurprising that Beijing threw its weight around to nix the deal. There was noise in the Western media that Beijing might have to use heavy-handed means to do so. Reuters opined that Beijing might use extra-territorial jurisdiction by applying its anti-monopoly law, claiming that the deal, even though outside mainland China, would affect, eliminate or restrict competition in China’s domestic market. Another option, according to Reuters, was the 2020 National Security Law, which goes after “terrorism,” subversives, secessionists, and colluders with foreign forces.”
In the end, China didn’t even need to do much more than lift a finger, which likely hurts the fallback option. If China was forced to go the heavy-handed route, it was to be expected that it would hurt the Hong Kong financial center’s global standing as the US would paint Beijing as unfriendly to outside business interests.
There are, of course, still claims of that sort percolating out:
Xi’s China isn’t a market—it’s a trap. CK Hutchison begging for a CCP-approved investor shows how far business must crawl to feed Xi’s delusions of total control.👇 https://t.co/QSdIE8qOzZ
— Jay T (@Jay83214566) July 28, 2025
Not sure how such claims fit with Trump huddling with BlackRock chief executive Larry Fink over the deal, the whole Tik Tok saga, and numerous other examples, but what do I know?
Investors, however, are pumped by the potential inclusion of Cosco. From Bloomberg:
Investors are regaining enthusiasm for CK Hutchison Holdings Ltd. despite a delay in the company’s plan to sell 43 ports, with optimism fueled by news that a Chinese shipping behemoth is finding its way into the global deal.
Shares of CK Hutchison, which oscillated between gains and losses since the company first announced the deal on March 4, reached the highest this year on Friday after state-owned China Cosco Shipping Corp. emerged as a potential new member of the buyer consortium that includes American asset manager BlackRock Inc.
That leaves the Trump administration in the unenviable position of trying to swim upstream against the interests of investors, logistics, and simple logic—increasingly familiar terrain for the US these days.
Singapore’s PM has laid it out.
He knows the U.S. has abandoned the multilateral trading system, upon which Singaporeans wealth is based.
There’s only one stable force with the heft to anchor multilateral trade in this episode of disruption. It’s China. https://t.co/Zb0sZnEOZq
— Warwick Powell | 鲍韶山 (@baoshaoshan) April 5, 2025
Will Washington accept reality? If recent history is any indication, that is unlikely.
And there are plenty of other ways the US can try to shake things up and burn things down at maritime chokepoints in an effort to improve its bargaining position with Beijing.
Trump continues to bomb away at Somalia making a bad situation worse. Meanwhile, Somaliland, which proclaimed independence from Somalia in 1991, is now offering the US a military base at the entrance to the Red Sea and critical-minerals deals if the US will recognize it as a state. That also happens to be what Project 2025 recommends, arguing that “the recognition of Somaliland statehood as a hedge against the U.S.’s deteriorating position in Djibouti.”
That position in Djibouti is, of course, almost all about China.
Down at the Cape of Good Hope, the US is in the midst of a pressure campaign on South Africa with an eye on a naval base there. Just recently the House Foreign Affairs Committee passed a bipartisan(!) piece of legislation that would direct the president to assess whether South Africa is undermining U.S. national security or foreign policy objectives, and that means sanctions are likely incoming.
There was also the fact that U.S. Southern Command was/is partnering more closely with Panamanian security forces and drawing up plans to seize the Panama Canal by force—only if necessary, of course. Does the failure of the Hutchinson deal and the overall inability of the US to effectively coerce Beijing make it more likely the US goes through with such threats? I guess we’ll have to wait and see.
