Why Trump is going full steam ahead to keep China’s shipbuilding in dry dock

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Why Trump is going full steam ahead to keep China’s shipbuilding in dry dock

From the ever-evolving saga of the Panama Canal to new fees for Chinese-linked ships entering American ports – a move maritime industry insiders have called “disruptive” and “self-defeating” – the question for most in the shipping sector is why US President Donald Trump appears so intent on displacing China from it.

Here, we attempt to provide an answer by examining China’s role in global shipping, estimating the effects of Trump’s actions on the trade of major commodities and determining the feasibility of supplanting China-built vessels with alternatives from the US and its allies.

What is the status of the Panama Canal deal?

Trump claimed in his inaugural address on January 20 that “China is operating the Panama Canal”, primarily referring to facilities under the administration of the Hong Kong-based company Hutchison Ports since 1997.

CK Hutchison Holdings, the port and infrastructure arm of Li Ka-shing’s business empire, announced on March 4 it would sell off all its port holdings outside China – including those in Panama – to a US consortium led by investment firm BlackRock in a US$23 billion transaction.

The move has drawn controversy, with Beijing’s offices in Hong Kong reposting a series of negative commentaries online in an implicit condemnation of the decision. The Post reported last week the deal is not expected to be signed by the informal deadline of April 2, pending an antitrust review.

Regardless of the eventual buyer, the sale could trigger a wave of regulatory reviews in the more than 20 countries where the docks are located, should their governments deem them necessary.

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