By: Staff Writer
April 1, 2025
Hong Kong based CK Hutchison will not sign a deal to sell its Panama Canal holdings to American firm Black Rock as Chinese anti-trust regulators block deal amid further review.
The deal has become highly politicised as the Hong Kong conglomerate is thrust into the cross-hairs of an escalating China-U.S. trade war that has deepened concerns the financial hub’s edge will erode further amid geopolitical tensions.
CK Hutchison’s shares have dropped 12.9% since the close on March 13 – when it was first criticised by state media – to Monday’s intraday low of HK$43.05, wiping off HK$24.3 billion in market value. It’s currently valued at HK$167.6 billion ($21.6 billion).
The shares were down as much as 4.7% on Monday, but recovered some ground and were off 3.3% in early afternoon trade. Hong Kong’s Hang Seng Index (.HSI), opens new tab was 1.7% lower.
A pro-Beijing Hong Kong based newspaper Ta Kung Pao said in an editorial piece on March 21 that the transaction should to be scrapped as the deal is a “perfect cooperation” with the U.S. strategy to contain China.
US 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. BlackRockagreed 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.
The 51-mile canal is a crucial passagefor 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.