Panama Canal ports sale has been put on hold by Chinese regulators

A cargo ship waits at Balboa port before crossing the Panama Canal in Panama City on February 4. — Martin Bernetti/AFP/Getty Images via CNN Newsource

By CNN Newsource

Published March 28, 2025 10:17 AM

By Chris Isidore and Juliana Liu, CNN

(CNN) — Chinese antitrust regulators are investigating a US consortium’s deal for two ports in the Panama Canal zone, reportedly delaying the deal’s closing that was originally set for next week.

President Donald Trump has incorrectly claimed China controls the canal (Panama controls it, although China owns ports on both sides of the crucial maritime passage). Trump has threatened to have the United States once again take control of the canal between the Atlantic and Pacific oceans.

The deal, led by BlackRock, the world’s largest asset manager with an enormous pool of $11.6 trillion in assets, was announced earlier this month and was widely viewed as a way to ease tensions in the region. BlackRock agreed to lead a group that would buy Hong Kong firm CK Hutchison’s controlling interest in 43 other ports around the world, comprising 199 berths in 23 countries.

But China’s State Administration for Market Regulation, the top market regulator, said in answer to a question posed by the state-owned newspaper Ta Kung Pao that it had started an investigation into the deal “in accordance with the law to protect fair competition in the market and safeguard the public interest.” The same statement was reposted on Friday on the website of China’s Hong Kong and Macao Affairs Office.

Following that announcement CK Hutchinson decided that “there will not be an official signing of the two Panama ports deal next week,” according to a report in the South China Morning Post, citing a source close to the Hong Kong firm.

BlackRock did not immediately respond to a request for comment, nor did CK Hutchinson.

Canal critical to trade and military ships

The 51-mile canal is a crucial passage for both cargo ships and military ships to travel been the Atlantic and Pacific oceans. About 4% of the world’s maritime trade and more than 40% of US container traffic traverses canal.

But tensions between China and the United States have been growing recently. The Trump administration has announced new tariffs of 20% on all goods imported from China, and China has retaliated with pressure of its own. The Trump administration is set to announce additional tariffs on trading partners next week.

The Panama Canal was constructed by the United States in the early 20th century and was completed in 1914. For most of that century it was operated by the US, before the Carter administration negotiated its handover to Panama in a controversial treaty opposed by many Republicans at the time.

It is a key part of Panama’s economy. In 2024, the canal earned nearly $5 billion in total profits. According to a study released in December by IDB Invest, 23.6% of Panama’s annual income is generated from the canal and companies that provide services related to the canal’s operations.

Since its handover in 1999 the canal itself has been operated by Panama, not China, despite Trump’s stated concerns.

Mike Waltz, Trump’s national security adviser, told reporters late last month that the leadership of Panama had entered into “negotiations about addressing the ports on either side of the canal.”

But removing Chinese influence is only one of Trump’s demands on Panama, including that Panama stop charging fees to American vessels. During his first trip abroad as secretary of state, which began with a stop in Panama, Marco Rubio said he agreed that US vessels should be allowed to traverse the canal at no charge.

Rubio said that the US would be obligated to protect the Panama Canal if it came under attack, adding that he found it “absurd that we would have to pay fees to transit a zone that we are obligated to protect in a time of conflict.”

— CNN’s Patrick Oppman, Phil Mattingly and Andrew Sager contributed to this report.