SOS — Trump must break China’s global shipping chokehold

A high-stakes deal that would give an American company a major role in running dozens of strategically crucial global ports is now in limbo — as China aggressively demands a stake.

The United States cannot let that happen.

US asset manager BlackRock and its partners are vying for 43 of the world’s most important shipping ports, including the two that straddle the Panama Canal.

The seller is C.K. Hutchison, a major Hong Kong operator that is one of China’s “big three” port giants — and the only one not owned outright by the Chinese government.

Prying these ports from China’s oversight is a critical move for both US national security and the global economy.

Now the Chinese Communist Party is trying to block the deal, unless its state-owned COSCO joins the buyers’ group and gains veto rights over port operations.

Alarmingly, all three main parties are reportedly open to letting that happen, apparently thinking that a compromised deal is better than no deal at all.    

But with all that’s at stake, President Donald Trump should use every tool available — starting with the ongoing US-China trade talks — to push the original deal through and keep COSCO out.

The 43 ports that Hutchison seeks to sell would launch a global liberation from oppressive Chinese surveillance and control. 

If the plan falls through — or if it’s altered to add COSCO to the ownership group — China could tighten its grip on the global shipping system, by replacing a Beijing-influenced company with a Beijing-controlled one.

While the media has dubbed this the “Panama Canal deal,” it’s actually much bigger.

The canal, a vital artery that runs through the center of the western hemisphere, is certainly critical — but many of the other ports involved in the deal are equally so.

For example, this deal would include a port inside the Malacca Strait, the only direct maritime pathway between the Indian and Pacific Oceans.

It sees 90,000 ships and $3.5 trillion worth of global trade every year.

Hutchison is also looking to sell five ports that it owns on both sides of the Suez Canal, the preferred maritime commercial route between the Asian and European markets.

About 12% of global trade, $1 trillion a year, passes through Suez.

As China’s purchases of sanctioned Iranian oil draw greater US scrutiny, Hutchison’s four ports on the southern side of the Strait of Hormuz are also critical.

Nearly all Iranian oil must pass through the strait, along with oil and gas from Saudi Arabia, UAE, Iraq, Kuwait and Qatar.

In Europe, Hutchison controls 13 ports that act as a key entry point for Chinese goods into the European Union.

The original deal would reduce China’s port foothold on the continent — and the geopolitical influence that comes with it.

Like all major commercial deals, this one is complicated.

Apart from the two Panama Canal ports, BlackRock would retain 20% ownership of the remaining facilities; its partner, Europe-based Mediterranean Shipping Corp., would control 70%, with Singapore’s Sovereign Wealth Fund owning the rest.

Meanwhile, China’s power in global shipping is massive.

China produces 95% of world shipping containers and all of the refrigerated ones.

Ports around the world are plugged into China’s logistical software platform, LOGINK, which tracks sensitive trade, market, maritime and passenger data.

Huawei’s “Smart Port” 5G telecommunication towers provide Wi-Fi — and ready surveillance capacity — at ports worldwide.  

A Chinese state-owned company makes more than 70% of the world’s ship-to-shore cranes (and 80% of the cranes used in America) — a major risk, according to the House Homeland Security Committee, which has alleged those cranes may be engaging in covert surveillance on behalf of the CCP.

Adding state-owned COSCO to ports deal would give the CCP the power to veto any attempts to replace Huawei towers, LOGINK systems, Chinese cranes or other tools that may already be spying on behalf of the state.

With BlackRock’s minority interest in the vast bulk of these ports, replacing a private Chinese company with a state-owned one is even worse for the United States than the status quo.

Breaking China’s maritime monopoly is urgent.

At the same time, America’s economic leverage has never been higher.

As Beijing trumps up patently absurd anti-monopoly investigations to stall or scuttle the BlackRock-MSC deal, the United States should Trump right back.

He must make the choice clear: Access to American markets cannot continue unless Beijing releases its maritime monopoly.

Elaine Dezenski heads the Center on Economic and Financial Power at the Foundation for Defense of Democracies, where Susan Soh is a research associate.