Abhishek G BhayaIn a move that underscores the rising tensions between the United States and China over global strategic infrastructure, New York-headquartered BlackRock, the world’s largest asset manager, has agreed to acquire two major ports on the Panama Canal from Hong Kong-based and Cayman Islands-registered CK Hutchison for $22.8 billion.
This deal, announced on CK Hutchison’s official website on March 4, has drawn significant attention, not only because of the size of the transaction but also because it comes on the heels of increased pressure from former US President Donald Trump, who has repeatedly raised concerns over Chinese influence in the vital waterway.
While the acquisition has sparked a range of geopolitical implications, some analysts believe that CK Hutchison’s decision to sell its Panama Canal ports is likely a result of careful risk assessment rather than just political and economic calculations.
“It seems likely the company has conducted a thorough risk assessment and decided to sell its interests for something closer to fair market value before geopolitics compels a fire sale,” Josef Gregory Mahoney, a professor of politics and international relations at Shanghai-based East China Normal University, tells TRT World.
The sale involves the Port of Balboa and the Port of Cristobal, both strategically located at opposite ends of the Panama Canal. Under the agreement, CK Hutchison, controlled by Hong Kong’s wealthiest man Li Ka-shing, will sell a 90 percent stake in its Panama ports to a consortium led by BlackRock, Global Infrastructure Partners, and Terminal Investment Limited (TIL). The remaining 10 percent will be retained by Singapore’s PSA, a subsidiary of the sovereign wealth fund Temasek.
For CK Hutchison, the deal represents a shift in its portfolio of assets, which spans ports, retail, telecoms, and other infrastructure across the world. Port operations contributed about 9 percent to the conglomerate’s total revenue of $59 billion in 2023.
The transaction, expected to net CK Hutchison more than $19 billion, follows a period of intense political pressure from the Trump administration, which had threatened to reassert US control of the Canal.
US President-elect Donald Trump’s recent rhetoric targeting Panama are a microcosm of the intensifying China-US rivalry, where strategic chokepoints like the Panama Canal become symbolic battlegrounds.
Is Hong Kong an indirect target?
The Panama Canal has long been a flashpoint in US- Latin America relations, especially given the historical context of US intervention in Panama and its control over the Canal Zone until the handover to Panama in 1999.
This deal, according to Mahoney, reflects a broader pattern of US pressure on countries in its sphere of influence, particularly those involved with Chinese investment.
“It’s possible the company has also examined the broader risks implied in this aggression from Trump: not just the economic and military coercion directed at Panama, but also the possibility that Trump may increasingly treat Hong Kong the same as the mainland,” Mahoney elucidates.
He argues that if Trump were to escalate his stance against Hong Kong, it could have far-reaching implications for the companies operating there, including CK Hutchison.
“Should Trump be provoked into attacking Hong Kong’s special status, and these ideas have percolated in his circle, it could spell much bigger problems for the company and the rest of Hong Kong,” Mahoney warned.
Thus, the Panama Canal ports deal may be seen as part of a broader strategy by CK Hutchison to avoid being caught in the crossfire of the US-China rivalry, explains the Shanghai-based American geopolitical analyst.
Repercussions beyond Panama
Mahoney points out that Trump's geopolitical maneuvering extends beyond just the Panama Canal. “It’s absolutely certain that Trump wants to drive wedges between China and the countries with whom it has positive relations, from Russia to Panama and all in-between,” he said.
However, Mahoney raises concerns about Trump’s approach to global infrastructure and trade, particularly how he has conflated Chinese influence in private companies with the Chinese state’s strategic interests.
“CK Hutchison is a private Hong Kong company, not a mainland enterprise. The fact that Trump is equating such a firm with Beijing is deeply troubling,” Mahoney says.
He believes that the US conflating Hong Kong with mainland China threatens corporate sovereignty and sets a dangerous precedent for future US actions against foreign companies engaged in Chinese trade.
Trump's continued pressure on Panama to reduce Chinese influence in the canal also speaks to broader concerns about US control over critical infrastructure.
Panama, despite its historic ties with the United States, has been reluctant to sever ties with China, which has become a major player in global trade and infrastructure through its Belt and Road Initiative (BRI).
Trump’s push to limit Chinese access to strategic ports, such as those in Panama, is a clear indication of the broader geopolitical battle for control over vital infrastructure, according to analysts.
Beijing has sharply criticised the United States for forcing Panama to cancel its participation in China’s Belt and Road programme. It follows a threat from Donald Trump that the US would take the Panama Canal back by force if Chinese influence wasn’t curbed. Meanwhile, the US and Panama are involved in a fresh dispute over the charges for US military ships crossing the canal. Our North America correspondent Jon Brain reports.
How will China react?
As for China’s potential response, Mahoney suggests that Beijing may not engage in direct retaliation, especially since CK Hutchison is a private company based in Hong Kong and not a state-owned enterprise.
“We might not see a reciprocation from Beijing because the mainland has asserted that this is a private Hong Kong firm and it exercises no control over it,” Mahoney notes. This could signal a more pragmatic approach by China, which, despite its growing global influence, has often taken a measured stance in its foreign policy, he says.
However, Mahoney warned that this development could have wider ramifications, especially when viewed in the context of the US.'s broader campaign against Chinese-led initiatives, such as the Belt and Road Initiative and the BRICS grouping of emerging economies.
Last month, Panama formally pulled out of BRI, following pressure from the US.
“We should equate this development with the US pressuring countries to avoid BRI and BRICS: this is the larger risk at hand, and it will be interesting to see how countries in Africa, Latin America, and Southeast Asia respond,” says Mahoney.
What’s at stake for Panama and global trade?
For Panama, allowing the sale of the ports is not just about economic considerations—it is a reflection of the geopolitical pressures it faces. The country has long enjoyed a unique position as a key player in global trade due to the strategic importance of the Panama Canal.
However, analysts feel that the growing influence of China in Latin America and the increasing pressure from the United States could complicate its future.
Panama's government, keen to maintain positive relations with both Washington and Beijing, finds itself caught between two competing superpowers.
The US may see this deal as a victory in its ongoing struggle to contain Chinese influence in the Western Hemisphere, but it also reflects a broader trend in the global economy.
As multinational companies like BlackRock and Global Infrastructure Partners increasingly take control of critical infrastructure, the question of national sovereignty and corporate power becomes ever more pressing, say analysts.
The Panama Canal, once a symbol of US control over global trade routes, now finds itself at the centre of a new geopolitical contest.
