HONG KONG — A Hong Kong-based conglomerate has agreed to sell its stake in two Panama Canal ports to U.S. and Swiss investors amid pressure from the Trump administration over the ports’ ties to China.
CK Hutchison, a conglomerate founded by Hong Kong billionaire Li Ka-shing, has agreed in principle to sell its controlling stake in a unit that operates two Panama ports to a consortium that includes the U.S. asset manager BlackRock, the companies said Tuesday.
President Donald Trump had argued that the Chinese-backed ports, one each at the canal’s Pacific and Atlantic entrances, posed a national security threat because they gave the Chinese military potential control of the strategically vital canal.
Though CK Hutchison said the proposed sale was unrelated to politics, Trump touted it as a victory in his Tuesday night address to a joint session of Congress.
“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he said. “Just today, a large American company announced they are buying both ports around the Panama Canal.”
Nearly 15,000 ships from around the world transit each year through the Panama Canal, which was built primarily with U.S. funds and was completed in 1914. About two-thirds of them are headed to or from the U.S.
In 1999, the U.S. relinquished control of the canal to Panama under a treaty negotiated by President Jimmy Carter and ratified by the Senate in 1978, with the U.S. retaining the permanent right to defend the canal against any threat to its neutrality.
Trump has claimed without evidence that China controls the Panama Canal. He said he would consider using military force to seize it back from Panama, one of Washington’s closest allies in Latin America.
“We didn’t give it to China,” Trump told Congress on Tuesday. “We gave it to Panama and we’re taking it back.”
Both China and Panama deny there is any foreign interference in the 50-mile canal, whose neutrality is enshrined in Panama’s Constitution.
“China supports Panama’s sovereignty over the canal and is committed to maintaining its status as a permanently neutral international waterway,” Chinese Foreign Ministry spokesperson Lin Jian said at a regular briefing in Beijing on Wednesday.
“China has never been involved in the management or operation of the canal, nor has it interfered in its affairs,” he said.
The Trump administration and members of Congress were briefed on the proposed $22.8 billion deal, a person familiar with the matter told NBC News.
The consortium, which also includes the Geneva-based Mediterranean Shipping Company, would gain control of an 80% interest in CK Hutchison subsidiary Hutchison Ports, which operates 43 ports in 23 countries. It would also receive 90% of Panama Ports, which operates the Balboa port on the Pacific side of the canal and the Cristóbal port on the Atlantic side.
It does not affect the company’s ports in China.
“I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” Frank Sixt, co-managing director of CK Hutchison, said in a news release.
The news sent CK Hutchison up almost 22% on Wednesday on Hong Kong’s Hang Seng Index.
Control over the Panama Canal has been a high-profile focus of the Trump administration, with Marco Rubio making Panama part of his first foreign trip as secretary of state.
Hutchison Ports won the rights to manage the two Panama Canal ports in 1997 in a bidding process that was described as fair and nondiscriminatory by U.S. officials at the time. In 2021, its contract was extended until 2047.
Though the two ports sit at opposite ends of the Panama Canal, ships do not have to pass through them to enter. Other ports along the canal are operated by companies from Taiwan, Singapore and the U.S.
The ports serve mainly to handle cargo, while the canal itself is run by the Panama Canal Authority, an independent Panamanian government agency.
Though CK Hutchison is a private company based in Hong Kong, a semiautonomous Chinese territory, Trump administration officials had argued that it was subject to control by Beijing, which has been tightening its grip on the city.
The potential sale, which is subject to regulatory approval, was first reported by The Wall Street Journal.
