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Trump administration in biggest maritime push in decades

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China's global ports seen as strategic risk in time of war

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Beijing says follows framework of international law

By Jonathan Saul

LONDON, Sept 16 (Reuters) - U.S. President Donald

Trump's administration is on a mission to weaken China's global

network of ports and bring more strategic terminals under

Western control, according to three sources familiar with the

plan.

The drive is part of the most ambitious effort to expand

U.S. maritime influence since the 1970s and is designed to

address growing fears in Washington that it would be at a

disadvantage to China in the event of a conflict.

Trump administration officials believe the U.S. commercial

shipping fleet is ill-equipped to provide logistical support for

the military in time of war and Washington's dependence on

foreign ships and ports is excessive, the people said.

Options the White House is considering include supporting

private U.S. or Western firms to buy Chinese stakes in ports,

the three people said. They did not mention any specific firms

other than to cite BlackRock's ( BLK ) proposed deal to buy the

port assets of Hong Kong's CK Hutchison ( CKHUF ) in 23

countries, including by 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 U.S. Treasury did not respond to

requests for comment.

Besides Panama, U.S. officials and lawmakers are concerned

about Chinese maritime infrastructure holdings in places

including Greece and Spain, the Caribbean, and U.S. West Coast

ports, according to the sources.

China conducts normal co-operation with other countries

within the framework of international law, a spokesperson with

China's diplomatic mission in Washington said.

"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.

Officials in Beijing did not respond to a request for

comment.

"The U.S. government sees Chinese investments in global

ports as a huge threat to its national security," said Stuart

Poole-Robb, founder of risk and intelligence advisers KCS Group.

"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 U.S. security counterparts.

GREEK PORT IN FOCUS

The U.S. 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 have told Reuters previously that

they have not been informed about any plans to change control of

Piraeus.

Washington already has COSCO in its sights.

The Department of Defense added state-owned COSCO to its

blacklist of companies with links to the Chinese military in

January. While the designation does not involve immediate bans

on U.S. companies doing business with those listed, 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 U.S. administration has unveiled measures to increase

America's thin commercial maritime presence around the world,

including by encouraging domestic shipbuilding, is looking to

expand access to U.S.-controlled shipping registries, and is

also reviewing global maritime chokepoints for shipping risks.

China owns or leases an extensive network of ports through

companies including COSCO and other state-controlled enterprises

such as China Merchants and SIPG in Shanghai.

According to a report published last year by the Council of

Foreign Relations, a U.S. think-tank, 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 U.S. shipyard capacity, meaning it could take

decades to catch up, according to U.S. Navy estimates.

The U.S. maritime push has contributed to tensions with

Beijing, which sees port and shipping assets as integral to its

Belt and Road initiative, at a time when the two superpowers are

already at loggerheads over trade and tariffs.

MEDITERRANEAN GATEWAY UNDER REVIEW

In March, the U.S. 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 and this has raised concerns in Washington

over 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 U.S. influence over the seas.

He signed an executive order in April to revive shipbuilding

capacity to expand the fleet of U.S.-controlled vessels.

His administration is examining a proposal to establish a

shipping registry in the U.S. Virgin Islands that could attract

vessels to a U.S.-controlled flag without having to meet the

stricter standards of the domestic U.S. registry.

The U.S. is poised to start hitting Chinese-built or

Chinese-flagged vessels with fees for calling at U.S. ports.

And Trump has also flagged seizing the semi-autonomous

Danish territory of Greenland as an objective, due to its

proximity to the Arctic and key shipping lanes.

Together, this all adds up to the most ambitious effort by

the U.S. to improve its position in global shipping since

President Richard Nixon, who tried to bolster domestic

shipbuilding, the commercial ship registry, and U.S. sea power,

the sources familiar with the plans said.

"The U.S. 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," said Poole-Robb at KCS.

CARIBBEAN SHIPPING CONCERNS

The United States has expressed concern too about Chinese

investment in Jamaica's Kingston terminal, a key maritime

transhipment hub in the Caribbean due to its location and

deep-water port facilities, according to the three sources.

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.

A June analysis 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, U.S. 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 U.S. 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 any U.S.

communication or request 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 U.S. 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.

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 U.S. investments.

In Australia, U.S. private equity firm Cerberus, which was

founded by U.S. Deputy Secretary of Defense 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 U.S. defense 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 U.S. 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."

(Reprting by Jonathan Saul in London; Additional reporting by

Lisa Baertlein in Los Angeles, Zahra Burton in Kingston, James

Pomfret in Hong Kong, David Lantona and Aisling Laing in Madrid,

Joan Faus in Barcelona, Renee Maltezou in Athens, Kirsty Needham

in Sydney, Phil Stewart, David Brunnstrom and Timothy Gardner in

Washington; Editing by David Clarke)