China Issues New Threats to Block Panama Canal Ports Deal

By Ryan Hanrahan

The Wall Street Journal’s Costas Paris and Jack Pitcher reported that “China’s government is threatening to block a deal that would transfer ownership of dozens of seaports to Western investors if Cosco, China’s largest shipping company, doesn’t get a stake. The proposed sale includes two ports at the Panama Canal and more than 40 others around the world, all owned by Hong Kong-based CK Hutchison.”

“China is pushing for state-owned Cosco to be an equal partner and shareholder of the ports with BlackRock and Mediterranean Shipping Co., a containership operator, according to people familiar with the deal talks,” Paris and Pitcher reported. “BlackRock and MSC in March reached a preliminary agreement to buy the ports in a deal valued at nearly $23 billion.”

“Now, BlackRock, MSC, and Hutchison all are open to Cosco’s taking a stake, the people familiar with the talks said,” Paris and Pitcher reported. “Any deal giving a stake in the Panama ports to a Chinese-owned company would likely upset President Trump, who has threatened to take control of the canal and has objected to Hutchison’s ownership of two ports there. The White House didn’t respond to a request for comment Thursday.”

Reuters reported that “China has always been firmly opposed to the ‘use of economic coercion, hegemony, bullying, and infringement of the legitimate rights and interests of other countries,’ its foreign ministry spokesperson Lin Jian said at a press briefing on Friday, when asked about the report.”

Details of the Proposed Ports Deal

“Tycoon Li Ka-shing’s CK Hutchison in March announced it would sell its 80% holding in the ports business, which encompasses 43 ports in 23 countries,” Reuters reported. “The business has an enterprise value of $22.8 billion, including debt.”

“After much scrutiny and criticism in China, CK Hutchison confirmed in May that Italian billionaire Gianluigi Aponte’s family-run MSC, one of the world’s top container shipping groups, was the main investor in a group seeking to buy the ports,” Reuters reported. “…The proposed sale has also drawn the attention of U.S. President Donald Trump, who has repeatedly expressed his desire to reduce Chinese influence around the Panama Canal and termed the deal a ‘reclaiming’ of the waterway after it was first announced.”

While it has been a while since President Trump addressed issues around the canal, The Hill’s Alex Gangitano reported in January that “President-elect Trump on Tuesday refused to commit to not using the U.S. military to gain control of the Panama Canal, after vowing last month to take over operation of the key passageway.”

“Trump was questioned during a press conference at Mar-a-Lago about his recently targeting the canal as well as Greenland for possible American expansion and if he would say he would not use the military to gain control of it,” Gangitano reported. “‘I’m not going to commit to that. It might be that you have to do something,’ Trump said. ‘Look, the Panama Canal is vital to our country, it’s being operated by China, China. And we gave the Panama Canal to Panama, we didn’t give it to China.’”

Canal of Extreme Importance to U.S. Ag Shipping

Farm News Media’s Dennis Rudat reported in January 2024 that “representing 14% of all U.S. maritime trade, 72% of all the cargo transiting the Panama Canal is either coming from or going to the U.S., including a substantial portion of U.S. agricultural exports, according to (to American Farm Bureau Federation Economist Betty) Resnick.”

“‘So, the Panama Canal is really a critical choke point for U.S. agriculture and U.S. economy in general,’ Resnick said, with 18% of corn exports, 32% of soybean exports and over 90% of sorghum exports moving through the shipping canal,” Rudat reported.

Axios’ Ben Berkowitz reported that globally, “about 2.5% of all global maritime trade passes through the canal.… About 10,000 ships a year transit the canal, though in recent times severe drought has limited capacity and helped push transit rates higher.”

China Issues New Threats to Block Panama Canal Ports Deal was originally published by Farmdoc.