The proposed sale of two key Panamanian ports by Hong Kong-based CK Hutchison to a consortium led by BlackRock has hit a roadblock, as China exerts pressure to halt the deal. The agreement, initially expected to be signed by April 2, remains in limbo as negotiations continue amid heightened geopolitical tensions between Beijing and Washington.

Chinese authorities have intervened, citing national security and competition concerns. The State Administration for Market Regulation announced an antitrust review, signalling Beijing's determination to prevent strategic infrastructure from falling under total US control. This move follows a broader effort by China to curtail major business divestments to American entities, reflecting the ongoing power struggle between the two global economic giants.

Reports indicate that Beijing has pressured CK Hutchison, controlled by billionaire Li Ka-shing, to reconsider the sale. The Hong Kong and Macau Affairs Office, along with state-backed media, has criticised the move in recent weeks, framing it as a betrayal of national interests.

On the other side, Washington has welcomed the potential acquisition, with US President Donald Trump hailing the deal as a strategic win. The US has long sought to reduce Chinese influence in the Panama Canal, a vital trade corridor facilitating 3% of global maritime trade.

The canal sees around 9.2mn barrels of oil – mostly refined products - and 117mn cubic metres of LNG flowing through its waters daily.

Diplomatic tensions erupted after Trump took office in January, making allegations of Chinese interference in the waterway's management – a claim vehemently denied by Panamanian authorities – and purported "exorbitant fees" charged on US vessels. Trump went as far as vowing to "take back" the canal during his inauguration address. Secretary of State Marco Rubio has subsequently ramped up rhetoric against the small Central American nation, warning President José Raúl Mulino that Washington would "take necessary measures" if the country did not address perceived Chinese involvement, including the ports managed by CK Hutchison.

The Panamanian government has since taken a more cautious approach, stating that legal reviews of the port concession agreements are ongoing. While the country has the authority to intervene, it has so far refrained from taking a decisive stance. However, Panama’s recent policy shift towards closer ties with the US—including allowing American naval vessels free passage through the canal and exiting Beijing's Belt and Road initiative—indicates a potential alignment with Washington's interests.

The deal, valued at over $22.8bn, encompasses 43 ports across 23 countries, with the Panamanian terminals of Balboa and Cristóbal emerging as the focal point of the dispute. If completed, CK Hutchison stands to gain over $19bn in cash, strengthening its financial position while exiting a politically sensitive business.

But the conglomerate now finds itself at the centre of a geopolitical crossfire, which could have long-term repercussions for Hong Kong’s standing as a global business hub. Analysts suggest China’s heavy-handed approach could discourage future foreign investment in the region.

This dispute extends beyond the specifics of the port deal. It is emblematic of the broader US-China rivalry, where critical infrastructure and economic assets are increasingly leveraged as tools of geopolitical influence. For Beijing, retaining influence over the Panama Canal aligns with its Belt and Road Initiative’s ambitions, while Washington seeks to reassert control over key global trade routes.

As negotiations continue, the fate of the deal remains uncertain. While CK Hutchison has not officially cancelled the sale, the growing political and regulatory scrutiny raises questions about whether the transaction will ultimately proceed.