Posted on June 11, 2025
The Panama Canal Authority’s lead official is the latest stakeholder to express his doubts about the sale of two ports on both sides of the waterway.
Ricaurte Vásquez Morales, administrator at the Panama Canal Authority (ACP), told the Financial Times the $23 billion deal that would shift the ports into the hands of Mediterranean Shipping Company (MSC) and BlackRock could potentially put the canal’s own neutrality at risk.
“There is a potential risk of capacity concentration if the deal comes the way it is structured as we understand right now,” Vásquez said. “If there is a significant level of concentration on terminal operators belonging to an integrated or one single shipping company, it will be at the expense of Panama’s competitiveness in the market and inconsistent with neutrality.”
The Panama Canal operates as a neutral passage for ships representing all countries. Treaties signed during the Carter administration in 1977 established its neutrality, and ensured that the then-U.S.-controlled waterway would gradually be returned to Panama by Dec. 31, 1999.
President Donald Trump has made overtures challenging the canal’s neutrality, with claims that he wants the U.S. to “take back” the trade artery on the grounds that it is allegedly under Chinese control. While China does not control the canal, Washington had wider concerns about the country’s influence on the waterway.
The sale of the Balboa and Cristobal ports by owner Hong Kong-based CK Hutchison Holdings was considered a win for the Trump administration, since the port operator’s ownership of the ports was classified as a national security risk.
But that deal has been scrutinized left and right, and has yet to get approval from the Panamanian government.
The Chinese government, as well as state-owned media in the country, had spoken out against the deal, with reports saying President Xi Jinping was furious that CK Hutchison went forward with the sale.
Following those reports, China’s antitrust regulator, the State Administration for Market Regulation (SAMR), opened a probe into the deal.
That investigation has resulted in the parties deciding to amend several parts of the initial deal to try and appease both Trump and Xi, an FT report said. Hutchison, which would be selling off more than 40 non-Panama ports to MSC and BlackRock in the deal, floated the idea of potentially selling off some or all of its 10 remaining ports in China in a separate sale. The regulator had already warned Hutchison against splitting the Panama ports from the original deal altogether as a means to circumvent antitrust review.
Along with government regulators, supply chain stakeholders have shown their displeasure with the potential acquisition in that it would give MSC, already the world’s largest ocean carrier, a leading market share in port terminal operations.
Vásquez noted that the deal has essentially pitted container shipping operators further against each other for space.
“This has become a significant battleground on transshipment capacity,” Vásquez said, noting that some at the ACP were worried the $23 billion transaction would cost it some container traffic if Hutchison’s customers moved elsewhere.
Vásquez added that the canal should use the ports deal as an opportunity to become a terminal operator itself by reactivating a project to build a terminal in the Port of Corozal at the Pacific end of the canal, according to FT.
As Vásquez and the ACP keep an eye on the situation, the authority will itself be on the radar of the Federal Maritime Commission (FMC) in the U.S. as it plans its infrastructure projects.
“They’re doing a very efficient job. What we’re watching there is what’s going to happen when they have a drought and they have reduced slots to go through there and then how those slots are allocated,” said FMC chairman Louis Sola, in a Monday briefing with the Port of Long Beach, calling it the agency’s “number one priority” at the canal.
The U.S. Army Corps of Engineers, which helped build and maintain the canal, is currently assisting the ACP on water management practices, according to Sola.
The record drought throughout the second half of 2023 prompted the ACP’s decision to build a new reservoir in the Indio River watershed to mitigate impacts from future climate conditions.
To diversify its business lines, Vásquez also said the authority was considering building a pipeline along the length of the canal to carry up to 1 million barrels per day of liquefied petroleum gas.
