Posted on March 12, 2025
Hong Kong-based logistics company CK Hutchison has announced that a US consortium – including US investment firm BlackRock – will buy an 80% stake in its business that controls two ports at the Panama Canal, The Guardian reported.
The US$14bn sale of the stake in Panama Ports Company, which owns and operates the ports of Balboa and Cristóbal on either side of the waterway, followed US President Donald Trump’s announcement that he wanted to end what he claimed was China’s influence and control over the Panama Canal, the 5 March report said.
However, CK Hutchison said the deal was unrelated to Trump’s vow to “take back” the canal.
“I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama ports,” the company’s co-managing director Frank Sixt was quoted as saying.
“This transaction is the result of a rapid … but competitive process in which numerous bids and expressions of interest were received,” Sixt said, adding that the chosen agreement was “clearly in the best interests of shareholders”.
Despite the company’s assertion that the transaction was unrelated to politics, Trump claimed it as a victory in his address to a joint session of Congress on 4 March, NBC News reported the next day.
“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he was quoted as saying. “Just today, a large American company announced they are buying both ports around the Panama Canal.”
CK Hutchison has been operating the ports of Balboa and Cristóbal at the canal’s Pacific and Atlantic entrances for more than two decades, according to The Guardian report.
Since taking office in January, Trump has made claims that China controlled the canal – a vital strategic asset once operated by the USA, The Guardian wrote.
Other ports in the canal are operated by firms from the USA, Taiwan and Singapore, according to the report.
The sale did not include any interest in Hutchison Port Holdings Trust, which operates ports in Hong Kong and China, or any ports in mainland China, the company said.
The consortium, which includes BlackRock, Global Infrastructure Partners and Terminal Investment, has agreed negotiations with CK Hutchison will be on an exclusive basis for 145 days, according to CK Hutchison.
In February, Marco Rubio visited Panama during his first overseas trip as US secretary of state, demonstrating the canal’s importance to the new administration, The Guardian reported.
Rubio secured a commitment from the Panamanian president José Raúl Mulino to exit the belt and road initiative, China’s infrastructure-building programme, the report said.
He also pressed for free passage of US vessels through the canal, saying it was unfair for the USA to have to defend the waterway while being charged to use it, according to the report.
About 5% of world trade is transported via the waterway, according to The Guardian report.
The USA is the largest user of the canal, which is vital for US grain and soyabean exports to Asia.
The Panama Canal Authority, a Panamanian government agency, has run the canal since 1999 and upgraded the waterways to handle increasingly large vessels.
Meanwhile, shipping firms are moving operations out of Hong Kong – or planning to do so – to avoid potential US-China risks, according to a 6 March Yahoo Finance report citing a Reuters article.
The moves were due to concerns that ships could be controlled by Chinese authorities or hit with US sanctions in a potential conflict between Beijing and Washington, six shipping executives were quoted as saying in the report.
“We don’t want to be in a position where China comes knocking, wanting our ships, and the USA is targeting us on the other side,” one unnamed executive was quoted as saying.
The former British colony was handed over by the UK to China on 1 July 1997 and was established as a special administrative region of China for 27 years, maintaining its own economic and governing systems from those of mainland China during this time.
China’s emphasis on the role of Hong Kong in serving Chinese security interests and growing US scrutiny of the importance of China’s commercial fleet in a possible military clash, such as over Taiwan, were causing concern across the industry, the executives told Reuters.
In response to Reuters’ questions, Hong Kong’s government said it was natural for shipping companies to review operations given changing geo-political and trade circumstances, and normal for the number of ships on registries to fluctuate in the short term.
Laws governing the registry and emergency provisions did not allow Hong Kong to commandeer ships to serve in a Chinese merchant fleet, the spokesperson added.
China’s defence and commerce ministries had not responded to questions about the role of a merchant fleet in Beijing’s military plans, the potential involvement of Hong Kong-flagged vessels and the shipowners’ concerns, the report said.
The US Treasury and Pentagon had also declined to comment about potential sanctions, shipping executives’ concerns and the role of Hong Kong-registered vessels in a Chinese merchant fleet.
Against this backdrop, the US Trade Representative’s office made a proposal in February to levy US port fees on Chinese shipping companies and others operating Chinese-built vessels in a bid to counter China’s “targeted dominance” of shipbuilding and maritime logistics, the report said.
The US administration had warned US businesses about the increasing risks of operating in Hong Kong, where the USA has applied sanctions against officials involved in a security crackdown, Reuters wrote.
For more than a century, Hong Kong has been a hub for shipowners and the brokers, financiers, underwriters and lawyers supporting them, according to the report.
Its maritime and port industry accounted for 4.2% of Hong Kong’s GDP in 2022, official data showed.
