Panama Port Deal Faces Antitrust Scrutiny Amid U.S.-China Tensions
The $23 billion port deal involving CK Hutchison’s sale of 43 non-Chinese ports to a consortium led by MSC and BlackRock has become entangled in a complex web of geopolitical tensions and antitrust concerns.
The transaction, which includes strategically important Panama Canal ports, has drawn scrutiny from both Washington and Beijing, highlighting how global infrastructure deals increasingly face regulatory challenges beyond traditional competition concerns. According to media reports, representatives from the Swiss-Italian shipping company MSC and the U.S. asset manager BlackRock recently held in-person discussions with China’s State Administration for Market Regulation (SAMR), seeking to address antitrust concerns before making a formal submission for review.
These talks reflect the consortium’s efforts to find a path forward that would satisfy both Chinese officials and the Trump administration of the United States. “Regarding China’s antitrust probe into the BlackRock deal, (China’s) State Administration for Market Regulation would likely base its review on Articles 25 and 26 of China’s Anti-Monopoly Law, which prohibit concentrations that substantially lessen competition,” explains Kenneth Khoo, assistant professor at the National University of Singapore’s Faculty of Law. The deal has faced significant political headwinds since its March announcement.
U.S. President Donald Trump accused China of “running the Panama Canal” and threatened to “take back” the vital trade chokepoint. Meanwhile, Beijing has expressed opposition to the transaction, with SAMR announcing an antitrust review “to protect fair competition in the market,” while a Beijing-backed newspaper criticized the deal as one that “sells out the Chinese people.” “Geopolitical factors, particularly U.S.-China tensions, appear to be influencing what would traditionally be a purely antitrust review process,” Khoo notes.
“While orthodox competition law theory suggests such considerations should be separate from antitrust analysis – as seen in the U.S.’s approach to TikTok, where concerns were addressed through non-antitrust mechanisms – China’s AML explicitly allows for their inclusion under Article 38.” Khoo points out that Article 38 of the AML “expressly permits consideration of national security factors in merger reviews”, which he calls a notable departure from jurisdictions like the U.S. or EU where national security reviews are typically handled through separate mechanisms like CFIUS.
“This approach may establish a precedent where geopolitical factors become increasingly relevant in cross-border infrastructure deals, though the long-term implications remain uncertain,” says Khoo. As regulatory challenges mount, CK Hutchison is reportedly considering several alternatives. These include potentially delaying the sale of the Panama ports specifically, bringing in other investors like Chinese state-owned Cosco or Dubai-based DP World, or even exploring a separate “Plan B” involving the sale of its remaining 10 ports in greater China – though CK has officially denied this last possibility.
“Should China block this transaction on antitrust grounds despite the parties’ substantial Chinese investments, the investment climate impact would depend significantly on whether the decision appears grounded in credible competition concerns,” Khoo observes. “Absent clear anti-competitive effects, such a decision could initially chill foreign investment in strategic sectors.” The consortium faces the challenge of satisfying multiple stakeholders with divergent interests. “The balancing of national security concerns against Hong Kong’s business-friendly environment presents a complex question of political economy without clear-cut solutions,” Khoo explains.
“Chinese authorities will need to weigh geopolitical considerations against potential pro-competitive benefits that might arise from the transaction.” As negotiations continue behind closed doors, the fate of this massive infrastructure deal remains uncertain. For instance, CK has also faced increased scrutiny from Panama’s government, including an audit of its contract to operate the two ports, despite having its 25-year concession renewed in 2021. Despite this tension reflecting the broader challenges of applying competition policy in strategically sensitive sectors, Khoo believes that markets ultimately respond more to regulatory certainty than to individual decisions. “Once clear parameters are established, investment activity typically recovers,” he adds.
