On March 4, BlackRock, Inc., one of the largest U.S. asset management firms, signed a memorandum of understanding with CK Hutchison Holdings Limited solidifying a deal to buy 90 percent of the Panama Ports Company, which operates the Balboa and Cristóbal ports in Panama. These ports have been at the epicenter of U.S.-Panama tensions wherein Washington alleged the Hong Kong–based company could provide a backdoor through which the People’s Republic of China (PRC) could exploit ports along the Panama Canal to the detriment of U.S. strategic interests. The agreement allays some of these fears for now, but its significance also goes well beyond Panama and carries important implications for the future of U.S.-China competition in the Americas as a whole.
Q1: What are the details of the deal?
A1: Hutchison Port Holdings Limited (hereinafter Hutchison) operates two ports, Balboa and Cristóbal, on the Pacific and Atlantic sides of the Panama Canal, respectively. Hutchison is in turn a subsidiary of CK Hutchison Holdings Limited. As part of the deal, BlackRock acquired all shares in Hutchison Port Holdings and Hutchison Port Group Holdings, securing an 80 percent ownership in the 43 Hutchison-operated ports in 23 countries, including Mexico, the Netherlands, Egypt, Australia, excluding Hong Kong. Hutchison’s total ports network, according to the company’s website, comprises 53 ports across 24 countries. The deal, valued at around $22.8 billion, is expected to proceed after confirmation by the government of Panama of the proposed terms of the purchase and sale of the Panamanian ports.
While the deal has been celebrated as a win for the Trump administration, at a financial level this is evidently also a win for Hong Kong, since according to some estimate, Hutchison Port Holdings’ valuation was around $13 billion. CK Hutchison shares increased 25 percent on Wednesday in Hong Kong’s market, the greatest increase it has seen in 27 years.
Q2: Does this deal help to mitigate U.S. security concerns about China’s presence near the Panama Canal?
A2: The deal, which reportedly materialized in the weeks since President Trump’s inauguration, is certainly a victory for the U.S. administration’s Latin America policy and Secretary of State Marco Rubio’s “Americas first” foreign policy. For the time being, it should allay immediate fears that China’s presence there via Hutchison constitutes a security risk for the United States.
However, there are more subtle vulnerabilities still at play along the canal zone. For one, it is unclear if the new owners of Balboa and Cristóbal intend to rip and replace Chinese physical and digital infrastructure that may give Beijing backdoor access into their systems. In September 2024, the House Committee on Homeland Security and the House Select Committee on the Chinese Communist Party released a joint report which showed that ship-to-shore port cranes made by PRC-owned Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) create significant cybersecurity and national security vulnerabilities for both the United States and its allies. In 2023, six of these cranes were acquired for the port of Balboa and a further seven were bought for Cristóbal. The company has also pressured operators for remote access to their cranes, ostensibly for technical troubleshooting purposes. It is unclear if Hutchison had a similar agreement with the manufacturer to transmit data back to the PRC.
Notably, Hutchison is not the only user of ZPMC cranes or other PRC-provided equipment along the canal. The Manzanillo International Terminal, the largest single port along Panama’s Caribbean coast, is owned by Seattle-based firm Carrix, Inc., but received six new gantry cranes from ZPMC in October 2024. Meanwhile, the now-cancelled Colón Container Terminal project led by China’s Landbridge Group left in its wake 300 security cameras donated by Huawei and ZTE, intended as part of a complementary “safe city” project. Furthermore, the exit of Hutchison does not prevent work from continuing on the fourth bridge over the canal, which has been much-delayed but continues to be led by PRC state-owned firms China Communications Construction Company and China Harbour Engineering Company. Nor does it stop the inroads China has made in Panama’s security sector, where it has donated equipment and trained police forces. While the change of ownership represents a clear win for the Trump administration on security and defense grounds, the sale still does not address the administration’s concern that the Panama Canal Authority is charging U.S. ships too much for the use of the canal, especially military vessels.
Removing Hutchison from the equation along the Panama Canal undoubtedly soothes immediate concerns regarding sabotage or covert action by the PRC along the maritime chokepoint, but it is no substitute for broader-based engagement with the Panamanian government. The United States and Panama should view this moment not as closing the book, but rather an opportunity to launch a broader cooperation on cybersecurity, espionage, and intelligence-sharing.
Q3:This deal impacts ports around the world—what other ports in Latin America are involved?
A3: Hutchison Ports owns a total of 53 ports across 24 countries, including 10 ports in Hong Kong and China. Given that the deal with BlackRock will impact 43 ports in 23 countries, it follows that all of Hutchison’s ports outside of China and Hong Kong are included in this deal.
In the Americas, besides the Balboa and Cristóbal ports in Panama, Hutchison operates four container ports in Mexico and one in the Bahamas, bringing its total in the region to seven. This means that the container terminals Ensenada International Terminal in Ensenada, Baja California, Internacional de Contenedores Asociados de Veracruz in Veracruz, the Lázaro Cárdenas Terminal Portuaria de Contenedores in Lázaro Cárdenas, Michoacán, Terminal Internacional de Manzanillo in Manzanillo, along with the Bahamas Freeport Container Port will be affected as well.
One of the most significant impacts of this ownership transition could be on Mexico’s illegal trafficking of goods, particularly fentanyl and its precursors. Ports such as Lázaro Cárdenas, Manzanillo, and Ensenada have become key entry points for fentanyl precursors, methamphetamine chemicals, and other contraband. Between 2015 and 2023, Mexican authorities seized 273 million doses of fentanyl, with these ports serving as primary transit hubs. The strategic location of Mexico’s ports, their high cargo volumes, and their connections to both Asia and Latin America make them highly attractive for criminal organizations looking to exploit weak regulatory enforcement and corrupt networks. Chinese-operated ports, especially, are known for their lack of transparency. Lack of transparency facilitates the making and taking of bribes and corruption, and this, in addition to coercion, is at the heart of any criminal organization seeking to exploit transportation or logistics facilities, including ports. Authorities at U.S.-operated ports will be more transparent and willing to cooperate with local and international law enforcement on drug and illicit cargo interdiction.
