A single line about the Panama Canal jolted diplomatic nerves in Washington, Beijing, and Panama City, thrusting Hong Kong billionaire Li Ka-shing into a fresh cross-current between the United States and China. The flare-up followed the January inauguration, when the new U.S. president raised the idea of taking the waterway back under American control, startling allies and rivals alike and reviving old security debates.
“When President Donald Trump called for the US to retake control of the Panama Canal during his inauguration speech in January, it set off a chain of events that landed Hong Kong tycoon Li Ka-shing in the middle of a US-China tiff.”
The remark triggered questions over sovereignty, trade, and the role of Chinese-linked companies in strategic ports. It also renewed scrutiny of Li’s regional investments and China’s growing ties with Panama.
Why the Canal Still Matters
The Panama Canal is a critical artery for global commerce. Roughly 5% of world trade transits the waterway. Control of access and nearby terminals can shape shipping costs, security planning, and regional influence.
The United States built the canal in the early 20th century and operated it for decades. Under the Torrijos–Carter Treaties, full control passed to Panama on December 31, 1999. Since then, the Panama Canal Authority has managed operations, including a 2016 expansion that allows larger ships to pass.
That history fuels periodic U.S. anxiety over foreign influence near the locks. The latest remark revived those concerns and put a spotlight on private concessions around the canal, not the canal itself.
Li Ka-shing’s Port Footprint
Li Ka-shing is one of Asia’s best-known investors. Through entities tied to his former flagship Hutchison Whampoa, he built a vast portfolio of port assets. In Panama, a Hutchison-linked operator won long-term concessions to manage container terminals at both ends of the canal after the U.S. handover.
Those deals have long been cited by some in Washington as a strategic worry. They argue that Chinese-linked firms may gain logistical insight or leverage near a vital chokepoint. Business advocates counter that the concessions are commercial, regulated by Panamanian law, and subject to international shipping norms.
Competing Views on Security and Sovereignty
U.S. hawks say even a commercial footprint can create risk. They cite proximity to key infrastructure and the ability to gather data on shipping flows. Analysts who share this view want closer review of port contracts and stronger oversight of equipment, staffing, and data handling.
Panamanian officials stress sovereignty and the canal’s strong safety record. They point to the independent Panama Canal Authority, its security protocols, and the country’s interest in keeping traffic moving. Any disruption would damage Panama’s revenue and global reputation.
Chinese officials typically frame the issue as normal trade. They argue that Chinese companies compete openly and help upgrade logistics networks. Beijing’s deeper ties with Panama have grown since 2017, when Panama recognized the People’s Republic of China, opening the door to more investment.
Economic Stakes For Shippers and Ports
The canal’s reliability is the anchor for supply chains linking Asia, the Americas, and Europe. Any hint of political uncertainty can ripple through freight costs and insurance premiums. Shippers watch for changes in terminal access, fees, or inspections that might slow schedules.
- Canal traffic supports energy, agriculture, and consumer goods flows.
- Large carriers rely on predictable slot bookings after the 2016 expansion.
- Port efficiency at Balboa and Cristóbal affects transit times and costs.
Port operators say commercial logic dominates day-to-day work. Their case rests on throughput targets, safety standards, and contract compliance. Critics warn that geopolitics can intrude quickly when strategic assets are involved.
What To Watch Next
Policy signals from Washington will shape the next phase. Options range from quiet monitoring to a sharper review of foreign-owned terminals near the canal. Panama may reassure partners with audits, transparency on concessions, or new security measures around data and equipment.
For Li Ka-shing-linked entities, steady operations and regulatory compliance are key. Any deviation could draw more scrutiny. For China, deeper commercial ties with Panama will move forward only if they avoid perceptions of strategic overreach.
The latest remark reopened old debates rather than settled them. The canal remains under Panamanian control, and trade continues to flow. But the episode shows how a few words can revive long-dormant disputes and pull global business leaders into the middle of them.
