Trump, China ramp up Panama canal pressure with Li deal in limbo
The US and China have been embroiled in an escalating war of words over the Panama Canal. PHOTO: REUTERS
HONG KONG – China dialed up scrutiny of Hong Kong billionaire Li Ka-shing's planned Panama ports sale to a BlackRock-backed group while Donald Trump sought preferential treatment for US ships in the waterway, adding to uncertainty over whether the blockbuster deal will proceed.
China's market regulator said April 27 that its review of Li-owned CK Hutchison Holdings' sale of dozens of ports would cover all parties involved, and that the deal should not be implemented without the body's approval.
Although the transaction only concerns CK Hutchison's assets outside of China and Hong Kong, the regulator's statement is seen as an assertion of Beijing's control over businesses based in the Greater China region.
The US and China have been embroiled in an escalating war of words over the Panama Canal, which handles roughly 3 per cent of global seaborne trade, with the US and China being its two main users. It is piling further political pressure on Li as he tries to sell the two Panama ports, putting him in the crosshairs of tensions between the US and China.
The escalating pressure from both sides highlights the increasingly tricky business environment that CK Hutchison and other major global companies have to navigate as trade tensions between the world's two biggest economies ramp back up.
Trump started pushing for the US to 'reclaim' the waterway soon after taking office this year, and the latest statements from Beijing follow his call for 'free of charge' passage of American ships through the Panama and Suez canals.
'Those Canals would not exist without the United States of America,' Trump wrote in a Truth Social post on Aril 26, saying he had asked US Secretary of State Marco Rubio to 'immediately take care of' the situation.
China, meanwhile, recently told its state-owned firms to hold off on any new collaboration with businesses linked to 96-year-old Li and his family, Bloomberg reported in March, irked by his plan to sell them to the global consortium.
The relevant enterprises must abide by national laws and 'immediately stop the relevant transactions,' according to an opinion column in pro-Beijing newspaper Ta Kung Pao. Otherwise, 'the consequences will be very serious.'
'American consortium BlackRock'
The deal was first announced in March, and involves 43 CK Hutchison-run ports in 23 countries. While work on the deal is still proceeding, including due diligence, accounting and tax checks, CK Hutchison already missed a target to sign a definitive agreement on the Panama part of the deal by April 2. If finalised, the transaction would net CK Hutchison US$19 billion (S$24.96 billion) in cash proceeds.
The Wall Street Journal reported in April that there are discussions around separating the two Panama ports from the US$22.8 billion deal to buy dozens of ports from CK Hutchison. Ta Kung Pao called it out as nothing more than a 'public relations manipulation.'
'No matter how the name is changed, the subject of the transaction has always been the American consortium BlackRock,' the outlet said. BLOOMBERG
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
11 minutes ago
- Straits Times
Canada vows to meet NATO defense budget target early, then spend more
Canada's Prime Minister Mark Carney makes a speech about defense and security at the Munk School in Toronto, Ontario, Canada June 9, 2025. REUTERS/Arlyn McAdorey Royal Canadian Navy submarine HMCS Victoria sails in the vicinity of Esquimalt Harbour while wearing a poppy on its sail in Esquimalt, British Columbia, Canada November 5, 2021. S1 Kendric Grasby/Canadian Forces/Handout via REUTERS/File Photo A pair of Royal Canadian Air Force (RCAF) CF-188 Hornets fly with a United States Navy EA-18G Growler during Exercise Maple Flag 51 over Alberta, Canada June 15, 2018. OS Erica Seymour/Canadian Forces/Handout via REUTERS/File Photo TORONTO - Canada, under pressure to spend more on its military, vowed on Monday to boost funding for the armed forces and hit NATO's 2% military spending target this fiscal year, five years earlier than promised. Prime Minister Mark Carney also said Canada was likely in future to devote a greater percentage of GDP on defense, given the need to replace outdated equipment and reduce its heavy reliance on Washington. "Now is the time to act with urgency, force, and determination," Carney said in a speech in Toronto, reiterating promises to work more closely with Europe's defense industry. The United States and other NATO allies have complained for years about what they see as the inadequate level of Canadian military funding. Ottawa spends about 1.4% of its gross domestic product on defense, well below its NATO commitment. The Liberal government plans to meet the 2% target by spending an additional C$9 billion ($6.58 billion) this fiscal year. The money will go toward increasing recruitment, repairing equipment and forging new defense relationships. "We think that this proportion of spending relative to GDP is going to go up somewhat," Carney later told reporters. "That's important because it will protect Canadians." Pressed as to how Canada could afford this at a time of rising budget deficits, Carney cited efforts to cut spending while ruling out tax cuts. Reuters reported last month that NATO chief Mark Rutte had proposed alliance members should boost defense spending to 3.5% of GDP and commit a further 1.5% to broader security-related spending to meet a U.S. demand for a 5% target. Carney won the April 28 election on a promise to stand up to U.S. President Donald Trump's tariffs and also to reduce the country's military reliance on Washington. Randall Bartlett, deputy chief economist at Desjardins, said the extra spending would increase the budget deficit beyond the roughly C$60 billion Carney's election platform promised. "If the government aims to increase defense spending to 3.5% of GDP by 2030 the deficit will only keep increasing," he said. Carney said another reason for Ottawa to act was what he called the decision by the United States to gradually withdraw from the concept of collective security. "Rising great powers are now in strategic competition with America. A new imperialism threatens. Middle powers compete for interests and attention, knowing that if they are not at the table, they will be on the menu," he said. The previous Liberal government last year formally committed to hit the NATO target by 2032. During the election campaign Carney pledged to get to 2% by 2030. Canada will boost pay for the armed forces and buy new submarines, aircraft, ships, armed vehicles and artillery, as well as new radar, drones and sensors to monitor the sea floor and the Arctic, Carney said, without giving details. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
CNA
34 minutes ago
- CNA
US and Chinese officials meet in London for pivotal trade talks
LONDON: Top US and Chinese officials were meeting in London on Monday (Jun 9) to try to defuse a trade dispute that has widened from tariffs to restrictions over rare earths, threatening a global supply chain shock and slower economic growth. On the first of likely two days of talks, officials from the two superpowers were meeting at the ornate Lancaster House to try to get back on track with a preliminary agreement struck last month in Geneva that had briefly lowered the temperature between Washington and Beijing. Since then, the US. has accused China of slow-walking on its commitments, particularly around rare earths shipments. White House economic adviser Kevin Hassett said on Monday that the US team wanted a handshake from China on rare earths after PresidentDonald Trump said Chinese President Xi Jinping had agreed to resume shipments in a rare call between the two presidents last week. "The purpose of the meeting today is to make sure that they're serious, but to literally get handshakes," Hassett, director of the National Economic Council, told CNBC in an interview. He said the US would expect export controls to be eased and rare earths released in volume immediately afterwards. The London talks, expected to continue into the evening on Monday, come at a crucial time for both economies, which are showing signs of strain from Trump's cascade of tariff orders since his return to the White House in January. Customs data showed that China's exports to the US plunged 34.5 per cent year-on-year in May in value terms, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. In the US, business and household confidence has taken a pummeling, while first-quarter gross domestic product contracted due to a record surge in imports as Americans front-loaded purchases to beat anticipated price increases. But for now, the impact on inflation has been muted, and the jobs market has remained fairly resilient, though economists expect cracks to become more apparent over the summer. Attending the talks in London are US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. The Chinese contingent led by Vice Premier He Lifeng includes Commerce Minister Wang Wentao and the ministry's chief trade negotiator, Li Chenggang. The inclusion of Lutnick, whose agency oversees export controls for the US, is one indication of how central rare earths have become, and some analysts saw it as a sign that Trump is willing to put recently imposed Commerce Department export restrictions on the table. China holds a near-monopoly on rare earth magnets, a crucial component in electric vehicle motors. Lutnick did not attend the Geneva talks at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other. POSITIVE CONCLUSION Trump and Xi spoke by phone last week, their first direct interaction since Trump's Jan 20 inauguration. During the call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary. But Trump said on social media the talks focused primarily on trade led to "a very positive conclusion," setting the stage for Monday's meeting in the British capital. The next day, Trump said Xi had agreed to resume shipments to the US of rare earths minerals and magnets, and Reuters reported that China has granted temporary export licenses to rare-earth suppliers of the top three US automakers. EXPORT RESTRICTIONS IN FOCUS China's decision in April to suspend exports of a wide range of critical minerals and magnets upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. Kelly Ann Shaw, a former White House trade adviser during Trump's first term, said that the US was arguing that China's continued export control restrictions violated the agreement in Geneva to remove retaliatory measures. "What I expect to see announced in the next few hours is effectively a reaffirmation of China's commitment, plus some concessions on the US side, with respect to export controls measures over the past week or two," said Shaw, a trade partner at the Akin Gump law firm in Washington. But Shaw said she expected the US only to agree to lift some new export curbs, not longstanding ones such as for advanced artificial intelligence chips. Reuters reported on May 28 that the US ordered a halt to shipments of semiconductor design software and chemicals and aviation equipment, revoking export licenses that had been previously issued. White House spokeswoman Karoline Leavitt told the Fox News program "Sunday Morning Futures" that the US wanted the two sides to build on the progress made in Geneva in the hope they could move towards more comprehensive trade talks. The preliminary deal in Geneva sparked a global relief rally in stock markets, and US indexes that had been in or near bear market levels have recouped the lion's share of their losses. But Ian Bremmer, president of the Eurasia Group, said while a temporary truce was possible, there was little prospect for the bilateral relationship to become constructive given broader decoupling trends and continued US pressure on other countries to take China out of their supply chains. "Everyone around Trump is still hawkish, and so a breakthrough US-China trade deal is unlikely, especially in the context of other deals that are further along and prioritised," he said in an analyst note.
Straits Times
an hour ago
- Straits Times
IAEA chief relays Iran warning against Israeli strikes on nuclear facilities
IAEA Director General Rafael Grossi holds a news conference after the first day of the agency's quarterly Board of Governors meeting at the IAEA headquarters in Vienna, Austria, June 9, 2025. REUTERS/Lisa Leutner CAIRO - International Atomic Energy Agency (IAEA) chief Rafael Grossi said Iranians warned him that an Israel strike on the country's nuclear facilities could cause Iran to be more determined about developing a nuclear weapon, according to an interview broadcast and published on Monday. 'A strike could potentially have an amalgamating effect, solidifying Iran's determination – I will say it plainly – to pursue a nuclear weapon or withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons,' Grossi said in the interview, published on the Jerusalem Post website and broadcast on i24 TV on Monday. Grossi, however, doubted that Israel would strike Tehran's nuclear facilities, the Jerusalem Post reported. The Iranian nuclear program "runs wide and deep," Grossi told the Jerusalem Post. "Disrupting them would require overwhelming and devastating force." Tehran and Washington have recently engaged in Oman-mediated nuclear talks. Iran is set to hand a counter-proposal for a nuclear deal to the United States via Oman, Iranian foreign ministry spokesperson Esmaeil Baghaei said on Monday, in response to a U.S. offer that Tehran deems "unacceptable". Last week, U.S. President Donald Trump said he had warned Israeli Prime Minister Benjamin Netanyahu not to take actions that could disrupt nuclear talks with Iran. "I told him this would be inappropriate to do right now because we're very close to a solution now," Trump told reporters in the Oval Office. "That could change at any moment." Trump and Netanyahu are expected to speak over the phone on Monday. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
