BlackRock’s Panama Canal Port Takeover Sparks U.S.-China Tensions
March 23, 2025 – BlackRock (NYSE: BLK) CEO Larry Fink is at the center of a geopolitical storm after orchestrating a $22.8 billion deal that grants a BlackRock-led investment group control over two strategic ports on either side of the Panama Canal. While the move has been applauded by the Trump administration, it has drawn sharp criticism from Chinese leadership, including President Xi Jinping.
China’s Reaction to the Deal
According to The Wall Street Journal, Beijing is displeased with Hong Kong-based CK Hutchison for selling the ports without prior government approval. CK Hutchison, controlled by billionaire Li Ka-shing, had allegedly intended to use the ports as a bargaining tool in broader U.S.-China trade negotiations. Chinese state-backed media, including Ta Kung Pao, have condemned the deal, warning that it could lead to restrictions on Chinese ships passing through the canal.
Hong Kong’s Chief Executive John Lee has also weighed in, stating that the deal “deserves serious attention.” Although he stopped short of outright criticism, his remarks reflect growing concern among pro-Beijing factions over the implications of BlackRock’s expanding control in global infrastructure.
Trump’s Push for ‘Taking It Back’
President Donald Trump has long voiced concerns over foreign control of the Panama Canal, previously accusing China of using the region to influence global trade. The U.S. leader praised BlackRock’s intervention, stating that it negates the need for a more aggressive American takeover of the canal’s strategic points.
Trump, in his recent address to Congress, declared, “My administration will be reclaiming the Panama Canal” and reiterated, “We’re taking it back.” While the deal technically remains private, it aligns with the administration’s broader economic and trade policies aimed at reducing Chinese influence in key global trade routes.
Potential Roadblocks to the Deal
Despite its approval by BlackRock and its partners, the deal is not yet finalized. It requires approval from various regulators, and reports from Bloomberg indicate that Chinese authorities are exploring ways to block or hinder the transaction. Potential strategies include citing security risks, antitrust violations, or regulatory challenges to stall the deal.
CFRA analyst Cathy Seifert has suggested that BlackRock’s stock could see a short-term dip if the deal collapses. However, the bigger concern for the investment giant is reputational risk for its newly expanded infrastructure division, which was bolstered by BlackRock’s $12 billion acquisition of Global Infrastructure Partners (GIP) last year.
Beyond the Panama Canal: A Broader Global Investment
Fink has clarified that the transaction extends far beyond the Panama Canal, covering 43 ports across 23 countries. Speaking at an energy conference in Houston, he emphasized that BlackRock is not purchasing the Panama Canal itself, but rather key port assets along critical shipping routes, including six ports along the Suez Canal.
“My kids called me and said, ‘BlackRock bought the Panama Canal? Can we go on it?’ And I said, ‘We did not buy the Panama Canal,’” Fink said, addressing public misconceptions. He highlighted that the two Panamanian ports represent only 4% of the total deal’s value, while the broader infrastructure portfolio will allow BlackRock to manage up to 100 ports globally.
With projected returns of 15% to 16%, Fink sees infrastructure investments as a lucrative asset class, even amid rising geopolitical tensions. “Even with tariffs and other things, it means the ports will be quite active,” he noted.
CK Hutchison’s Response and Beijing’s History of Criticism
This is not the first time CK Hutchison and its billionaire founder Li Ka-shing have drawn criticism from Beijing. In 2015, when CK Hutchison shifted its focus toward European assets, the company faced backlash from Chinese officials who viewed the move as prioritizing international expansion over national interests.
Following the recent controversy, CK Hutchison released its earnings report on Thursday, warning of heightened geopolitical and trade tensions but making no direct reference to the port sale. Chairman Victor Li, son of Li Ka-shing, acknowledged that the company faces an “unpredictable and volatile” business environment in 2025.
As BlackRock moves closer to finalizing the port acquisition, the geopolitical stakes continue to rise. While the deal has strengthened ties between BlackRock and the Trump administration, it has simultaneously intensified tensions with Beijing. The coming weeks will be critical as regulatory hurdles and political maneuvering shape the fate of this high-stakes transaction.