China is reportedly considering trade blockades at numerous global ports, including two located near the Panama Canal. This information surfaced on Thursday.
The deal involves approximately $20 billion and encompasses over 40 ports held by Hong Kong’s Li Ka-shing, which are being transferred to US firms BlackRock and Mediterranean Shipping Company (MSC).
China has stipulated that its leading shipping firm, Cosco, must be an equal partner with BlackRock and MSC for this agreement to proceed. Sources familiar with the matter shared this detail with the Wall Street Journal.
It seems that BlackRock, MSC, and Li’s CK Hutchison are open to the idea of including Cosco, according to the source.
Meanwhile, MSC, Cosco, and the Chinese Embassy did not respond quickly to requests for comments. BlackRock, on the other hand, chose not to comment at all.
The deadline for the transaction is rapidly approaching on July 27. Exclusive consultations among the three partners are set to wrap up soon, and the inclusion of Cosco could happen.
However, this modification might not sit well with President Trump, who considered the deal a win for national security—asserting that the US must “recover” control of the waterway.
Additionally, Chinese officials have instructed state-run firms to halt any upcoming transactions with Hutchison and other firms linked to Li, as noted by sources.
A report from Bloomberg last month indicated that Cosco’s involvement appeared as a potential solution following intense trade discussions between the US and China in Switzerland.
According to sources, Chinese authorities have communicated to BlackRock, MSC, and Hutchison that Beijing will take measures to obstruct the sale unless Cosco is integrated into the deal.
The firms participating in this transaction, it seems, are well aware that they cannot alienate China.
Both BlackRock and Hutchison are intertwined with national interests, while MSC stands as one of the largest carriers for Chinese exports.
MSC, owned by Italian billionaire Gianluigi Aponte, is stepping up as a significant player in this deal, even as BlackRock prepares to take charge of two crucial ports in Panama.
This transaction may position MSC to become the largest terminal operator in the world.
This situation is not unprecedented; in 2014, China blocked significant shipping alliances involving MSC, Denmark’s AP Moeller-Maersk, and France’s CMA CGM.
