US Keen to Control More Ports, Cut China's 'Maritime Advantage'

Rivalry between the West and China is intensifying in the global shipping and ports sector, with the US now considering support for private American or Western firms keen to buy Chinese stakes in strategic ports.

Sources have told Reuters the Trump Administration is keen to limit China’s “maritime advantage” and get more terminals under Western control.

The drive is part of an effort to expand US maritime influence and aims to address fears in Washington that it would be at a disadvantage to China in the event of a conflict.

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Trump administration officials believe the US commercial shipping fleet is ill-equipped to provide logistical support for the military in a time of war and that Washington’s dependence on foreign ships and ports is excessive, the people said.

Options the White House is considering include helping US or Western firms to buy Chinese stakes in ports, the three people said.

They did not mention any specific firms, but noted BlackRock’s proposed deal to buy the port assets of Hong Kong’s CK Hutchison in 23 countries, including two ports close to the Panama Canal, as a good example.

The sources asked not to be named because they are not authorised to discuss the matter publicly. The White House and US Treasury also did not respond to requests for comment.

Some analysts have said the share or division of control of the 43 ports that CK Hutchison wants to offload is likely to be a key topic of debate when the US does a tariff deal with China.

That’s because Chinese officials were reported to have told BlackRock, Hutchison and the Mediterranean Sea Company several months ago they would block the $23-billion takeover if COSCO did not get a stake.

Focus on Greek port Piraeus

Besides Panama, US officials and lawmakers are concerned about Chinese maritime infrastructure holdings in places such as Greece and Spain, the Caribbean, and ports on the US West Coast, the sources said.

“The US government sees Chinese investments in global ports as a huge threat to its national security,” Stuart Poole-Robb, founder of risk and intelligence advisers KCS Group, said.

“The concern is that China could leverage its control over these assets for espionage, military advantage, or to disrupt supply chains during geopolitical crises,” he said, citing conversations with US security counterparts.

The US intends to look at Chinese interests in the Greek port of Piraeus, the three sources said. Situated in Athens, in the eastern Mediterranean, Piraeus is a pivotal hub on the trade route linking Europe, Africa and Asia.

COSCO, one of China’s biggest port and shipping groups, holds a 67% stake in the Piraeus Port Authority company.

Some Chinese investors are concerned Washington may want to target COSCO’s operations in Greece, a source close to Chinese investors involved in Greek shipping said.

COSCO and the Greek government did not respond to requests for comment. Greek officials told Reuters previously that they had not been informed about any plans to change control of Piraeus.

Officials in Beijing did not respond to a request for comment, but a spokesperson with China’s diplomatic mission in Washington said they conducted normal cooperation with other countries within the framework of international law.

“China has always been firmly opposed to illegal and unjustifiable unilateral sanctions and so-called long-arm jurisdiction and moves that infringe on and undermine other countries’ legitimate rights and interests through economic coercion, hegemonism and bullying,” the spokesperson said..

COSCO on US watchlist

Washington has had COSCO in its sights. In January, the US Department of Defence added state-owned COSCO to its blacklist of companies with links to the Chinese military.

That designation does not involve immediate bans on US companies doing business with those listed, but it can act as a signal that further action is being considered.

“The United States intends to attack China’s international influence by exaggerating the ‘China threat theory’ and use this as an excuse to force allies to take sides in supply chain arrangements,” the Development Research Center of the State Council, an official think-tank of China’s governing cabinet said in a paper published last month.

The US administration has unveiled measures to increase America’s thin commercial maritime presence around the world and bolster domestic shipbuilding.

It is also looking to expand access to US-controlled shipping registries, and reviewing global maritime chokepoints for shipping risks.

A drone view shows cranes and containers at the new megaport being built by China's state-owned Cosco Shipping in Chancay, Peru — Cranes and containers are seen at the ‘mega-port’ built by China’s state-owned Cosco Shipping in Chancay, Peru (Reuters).

‘China has stakes in 129 ports’

China owns or leases an extensive network of ports through companies such as COSCO and other state-controlled enterprises like China Merchants and SIPG in Shanghai.

A report published last year by the Council of Foreign Relations, a US think-tank, said China had investments in 129 port projects worldwide through various companies, as of August 2024.

China’s shipbuilding industry is also estimated to be 230 times larger than US shipyard capacity, meaning it could take decades to catch up, according to US Navy estimates.

The US maritime push has contributed to tensions with Beijing, which sees port and shipping assets as integral to its manufacturing and trade sectors, as well as its Belt and Road initiative, at a time when the two superpowers are already at loggerheads over tariffs.

Review of maritime ‘chokepoints’

In March, the US Federal Maritime Commission launched a review of seven maritime chokepoints. It said it wanted to identify regulations, policies, or practices “that create unfavourable shipping conditions”.

The Strait of Gibraltar, which separates Spain from Africa at the entrance to the Mediterranean Sea, was one such waterway the review is examining.

Spanish Prime Minister Pedro Sanchez has sought to deepen trade ties with China – a move that has raised concerns in Washington because of Beijing’s access to its ports, two of the sources said.

“We are not aware of any alleged concerns or approaches by third parties on this matter, and therefore it is not appropriate for us to comment,” a Spanish foreign ministry spokesperson said when asked for comment about Chinese port investments.

COSCO has concessions to operate container terminals in Valencia and Bilbao, a Spanish Port Authority spokesperson said.

Trump has taken numerous steps since returning to the White House to boost US influence over the seas. He signed an executive order in April to revive shipbuilding capacity to expand the fleet of US-controlled vessels.

His administration is also examining a proposal to establish a shipping registry in the US Virgin Islands that could attract vessels to a US-controlled flag without having to meet the stricter standards of the domestic US registry.

Meanwhile, the US is poised to start hitting Chinese-built or Chinese-flagged vessels with fees for calling at US ports.

And Trump has also flagged interest in Greenland, which is a semi-autonomous part of Denmark, due to its proximity to the Arctic and key shipping lanes.

Together, it adds up to the most ambitious effort by the US to improve its position in global shipping since President Richard Nixon, who tried to bolster domestic shipbuilding, the commercial ship registry, and US sea power, the sources familiar with the plans said.

“The US in the short to medium term is likely to continue its efforts to counter Chinese influence in the key port areas by building alliances and partnerships to counter Chinese power and economic growth,” Poole-Robb at KCS said.

Caribbean ports ‘a security risk’

Washington has expressed concern too about Chinese investment at a terminal Kingston, Jamaica – a key transhipment hub in the Caribbean due to its location and deepwater port facilities, the three sources said.

China Merchants has a stake in the company operating Kingston’s container terminal together with France’s CMA CGM. Chinese metals group JISCO bought the Alpart alumina refinery in St Elizabeth, west of the capital in 2016 and owns nearby Port Kaiser.

An analysis in June by the Center for Strategic & International Studies think-tank said China’s presence in Kingston posed the greatest security risk to the United States out of all Beijing’s port projects in Latin America and the Caribbean.

On a visit to Kingston in March, US Secretary of State Marco Rubio described China’s strategy as being characterised by “predatory practices”, using government-subsidised companies to “underbid everybody” and acquire assets.

The presence of equipment from untrusted suppliers in critical infrastructure throughout the world, including ports, increases the risk to US national security, a State Department spokesperson said when asked about Rubio’s comments.

A spokesperson for Jamaica’s ministry for foreign affairs and foreign trade said it had no knowledge of a US request or communication about reducing China’s maritime influence in the Caribbean nation.

There was already some pushback against Chinese investment in the region during the first Trump administration.

“I suspect that there’s going to be increasing pressure from the US for us to back off from any increasing engagement with China,” said former Jamaican Prime Minister Bruce Golding, who helped bring Chinese investments into the Caribbean country.

US West Coast ports, and Darwin

In the United States, meanwhile, COSCO has investments with local partners in container terminals at the ports of Los Angeles and Long Beach. The White House did not respond to a request for comment about COSCO’s US investments.

In Australia, US private equity firm Cerberus, which was founded by US Deputy Secretary of Defence Stephen Feinberg, has shown interest in buying the lease for Darwin Port, a senior executive of the port’s Chinese operator Landbridge said in May.

Australian Prime Minister Anthony Albanese has pledged to return the strategic northern port to local ownership and reiterated during a visit to China in July that the government’s position was very clear about wanting Australian ownership.

Albanese’s office referred Reuters to his previous comments.

Feinberg has not been involved in any discussions or decisions regarding any acquisitions his former company may be interested in, a US defence official said when asked for comment.

Democratic and Republican lawmakers have been scrutinizing China’s port ownership since the end of President Joe Biden’s term, a US port official familiar with the matter said.

Speaking in February, Carlos Gimenez, chairman of the House Homeland Security Subcommittee on Transportation and Maritime Security, said: “America cannot, and will not, stand idly by while Communist China continues to undermine our interests at maritime ports.”