Posted on July 23, 2025
The Chinese government is reportedly threatening to nix the $23 billion port deal that has become a key front in its ongoing geopolitical tug-of-war with the U.S.
Under the proposed sale, Hong Kong-based port operator CK Hutchison Holdings would hand ownership of more than 40 ports worldwide to a consortium including Mediterranean Shipping Company (MSC) and BlackRock.
But according to a Thursday report from the Wall Street Journal, China wants to block the acquisition if its leading ocean carrier, Cosco Shipping, is not included in the deal.
The deal includes the ports of Balboa and Cristóbal in Panama, both of which sit on the opposite sides of the Panama Canal.
China has had the deal under antitrust review since March, delaying the official approval of the sale. The Panamanian government also still needs to approve the acquisition.
The Chinese Communist Party (CCP) is pushing for Cosco to be an equal partner and shareholder of the ports alongside both BlackRock and MSC, which is the world’s largest container shipping company, the report said.
Talks between the current parties in the deal are expected to continue through July 27, which is the end of the 145-day exclusive negotiation period. Cosco would not be able to be part of the talks until that period ends.
While BlackRock, MSC and Hutchison are reportedly open to Cosco taking a stake in the deal, U.S. lawmakers don’t share the same feeling.
When the deal was first announced in March, it was seen as a major victory for the Trump administration, which has been seeking to rid the Panama Canal of any alleged Chinese influence.
The president has claimed that the U.S. must “take back” the canal as part of his protectionist, “America First” rhetoric, so including a Chinese buyer in the sale of the Balboa and Cristóbal ports would further inflame the situation again.
The U.S. congressional committee on China remains concerned as Cosco floats in the background of the mega ports deal.
After the Wall Street Journal article published Thursday, Chairman John Moolenaar (R-Mich.) of the House Select Committee on China made his letter to a top Panamanian official public.
The letter expresses alarm that CCP-directed entities could be included as part of a transaction involving port concessions managed by CK Hutchison, which Moolenaar said would pose a direct threat to the national security of both Panama and the U.S.
“The inclusion of Cosco—or any other Chinese company—in port operations or control along the canal would represent an unacceptable risk to the national security of both our nations,” writes Chairman Moolenaar in the letter.
The letter mentioned Cosco’s inclusion earlier this year to the Department of Defense’s list of Chinese military assets.
Conversely, Chinese President Xi Jinping was reportedly angered with CK Hutchison when it announced the port sale to Western interests. The quick response saw multiple state-owned media firms criticize the deal before the China’s top antitrust body opened its probe.
Additionally, reports surfaced that the CCP told state-owned businesses to freeze any impeding deals with Hutchison or other businesses linked to its controlling shareholder, the family of Hong Kong billionaire Li Ka-Shing.
Panama has always maintained that it has full control over the canal, despite Trump’s claims. But the country is having its own doubts over the deal, even as it currently stands without Cosco’s involvement.
Ricaurte Vásquez Morales, administrator at the Panama Canal Authority (ACP), said the concentration of terminal operators in one area would be inconsistent with the canal’s neutrality.
This is on top of Panama’s Supreme Court already reviewing whether the Hutchison sale is constitutional, and the country’s government insisting that the port operator owes it roughly $300 million in previously unpaid fees stemming from its prior contract.
China has been able to sway shipping deals in the past. In 2014, its antitrust regulator shot down the proposed P3 Network that included MSC, Maersk and CMA CGM.
That vessel-sharing alliance would have combined the top three container shipping companies by total container capacity at the time, but worried China that it would give the companies too much control over global trade routes. The P3 Network had already been approved by American and European regulators.
The failed attempt at the new network led to the creation of the 2M alliance between MSC and Maersk in 2015, which lasted a decade until the agreement expired to kick off 2025.
