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Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldBlackRock has agreed to buy two major ports on the Panama Canal from their Hong Kong-based owner as part of a $22.8bn deal, following pressure from Donald Trump over alleged Chinese influence at the vital waterway.Under the agreement, the ports’ Hong Kong-based owner CK Hutchison would sell the business to a consortium including BlackRock, Global Infrastructure Partners and Terminal Investment Limited, according to a company statement on Tuesday. The group would acquire a 90 per cent stake in the company that owns and operates the two ports in Panama.Trump has frequently alleged that “China is running the Panama Canal”, and rattled Panama when he threatened earlier this year to “take it back” under American control. The Trump administration has also demanded Panama reduce Chinese influence at the canal, claiming Beijing’s involvement in the ports had violated a treaty concerning its neutrality.The deal announced on Tuesday also includes an 80 per cent stake of CK Hutchison’s ports subsidiaries, which run 43 ports in 23 countries, including in the UK and Germany. It also runs ports in south-east Asia, the Middle East, Mexico and Australia.The remaining 20 per cent stake is held by port operator PSA, which is owned by Temasek, the Singapore sovereign wealth fund. CK Hutchison said it expected to receive cash in excess of $19bn from the deal, a figure that includes repayment of some shareholder loans. CK Hutchison’s market capitalisation is HK$148bn ($19bn). The group’s share price surged 22 per cent in morning trading in Hong Kong on Wednesday.Trump’s election victory in November and his calls for the US to retake control of the canal prompted CK Hutchison to consider the sale, sparking a short and intense period of negotiations for the ports, according to people briefed on the discussions.“When President Trump won and he started making noise about annexing Canada and Greenland and Panama, the pressure was put on the Panamanians,” one person familiar with the deal said. The person added that CK Hutchison “realised that it was a political headache and they wanted to do something”.To navigate the potential political fallout, BlackRock chief executive Larry Fink briefed senior leaders in the Trump administration, including the president, to secure their backing for the takeover, two people briefed on the matter said. One of the people added that the consortium would not have gone forward with its bid if they believed the US government would not support the deal.Controlled by Hong Kong’s richest man Li Ka-shing and his family, CK Hutchison has a portfolio of ports, retail, telecoms and other infrastructure. Ports operations made up about 9 per cent of CK Hutchison’s total revenue of HK$461.6bn in 2023.The canal has become a flashpoint in Trump’s first weeks back in office, as he looks to expand the US’s borders and take control of infrastructure assets — disrupting allies and countries that had profited from decades of growing free trade.The deal with BlackRock comes after the asset manager’s acquisition of GIP, which helped make it a force in infrastructure investing. The strategically important waterway is run by the Panama Canal Authority, an arm of Panama’s government. It was built by American engineers and run by the US from its opening in 1914 until a treaty in 1977 agreed a staged handover to Panama, which was completed in 1999.Hutchison Ports, one of the world’s biggest operators of container terminals, has managed the ports at either end of the canal since 1997 under concessions from Panama’s government. The facilities have often attracted political comment from US politicians who have alleged that CK Hutchison’s role means China in effect controls the canal. The facilities mainly operate as “trans-shipment” ports where containers are moved between ships transiting the canal and smaller “feeder” ships shuttling to destinations around the Caribbean and the Pacific coast of South and Central America.CK Hutchison arranged a new concession in 2021 to keep operating the ports for another 25 years.Additional reporting by Robert Wright in London More

An EY survey of 4,000 executives found that half said they would be willing to pass on up to two-thirds of the added costs from tariffs onto their consumers.
President Donald Trump’s 25% tariffs on Canada and Mexico, along with an additional 10% duty on China, kicked in on Tuesday.
“Businesses today, they don’t care about whether the tariffs are coming tomorrow or in a week – they’re preparing [and] trying to build resilience,” said Gregory Daco, chief economist at EY-Parthenon.

People shop in a supermarket in the Manhattan borough of New York City on Feb. 20, 2025.
Charly Triballeau | AFP | Getty Images

Consumers are certain to face higher sticker prices as businesses prepare to pass on rising costs from tariffs onto buyers, according to EY-Parthenon chief economist Gregory Daco.
In an EY survey of 4,000 executives, nearly half said that they were willing to pass on two-thirds of the added costs from tariffs onto their customers. More than 3 in 10 participants were willing to take it a step further and pass over 90% of the additional expense to shoppers, the poll found.

The observations from the executives come as President Donald Trump’s 25% tariffs on Canada and Mexico took effect on Tuesday, along with an additional 10% duty on imports from China.
Target CEO Brian Cornell recently said that the tariffs on Mexican goods will likely lead to higher prices on produce.
The pace of the current trade war under the second Trump administration has been surprising and “much faster than we had previously seen,” Daco told CNBC. 
The economist’s baseline estimates project tariffs will have a “notable shock” of reducing U.S. gross domestic product by 0.6%, with the assumption of 20% duties on China and an average of 3% tariffs on the rest of the world.
However, “our initial baseline was actually that tariffs would be implemented later,” Daco said.

Even if the Trump administration’s tariffs only last for a short term and are quickly lifted, uncertainty will continue to erode on business confidence — and prices can’t move at the same pace. 
“Businesses today, they don’t care about whether the tariffs are coming tomorrow or in a week — they’re preparing [and] trying to build resilience,” through methods such as increasing inventories and looking toward different supply chains and alternatives, Daco said.
“But doing that has a cost and is inflationary in and of itself. Uncertainty deters economic activity,” he added. 
Specific, targeted tariffs “are extremely painful at the sector level,” but their effects take more time to filter through to consumers, Daco said. Auto, construction and steel producers likely have some inventory currently on hand before they increase costs on consumers, he added.
“So consumers are not going to see, necessarily, the full impact overnight — but very rapidly, they will see auto prices go up — a fridge, building a home, and other things that are going on,” Daco said.
Even if tariffs are quickly lifted, he forecasts higher price levels remaining sticky.
“It’s true that tariffs could be pulled back…. That does not mean that there’s no negative,” said Daco. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Nvidia is facing its first real competitor in China. US export controls, designed to cut off China’s access to advanced chips and chipmaking gear, were supposed to ensure that no domestic rival could emerge. But the very sanctions meant to shut down China’s chipmaking sector have instead fuelled it, accelerating the rise of an unexpected challenger: Huawei.The paradox is clear — had the US never imposed chip export bans, the Chinese conglomerate would have continued to rely on Taiwan Semiconductor Manufacturing Company for its chips. Chinese chips would have probably remained second-tier, reliant on foreign technology with little urgency to innovate. Instead, by sanctioning Huawei and cutting it off from advanced US chips, Washington has become the greatest driver of the technological self-sufficiency it sought to prevent.Huawei together with Chinese chipmaker SMIC — which is also under US sanctions — has made a key breakthrough in chipmaking, improving the yield of its latest AI chips to about 40 per cent, doubling from 20 per cent a year ago.Yield, the percentage of functional chips in a batch without defects, is a critical metric in chipmaking. Defects in chips are inevitable, especially in advanced chips. Shrinking transistor sizes and complex chip designs raise failure rates. Even slight variations in production and impurities in materials can cause malfunctions. Advanced chips are built in multiple layers, where misalignments add another layer of risk. Therefore, yields of between 30 and 40 per cent are common for new chip production lines, improving significantly as manufacturing is refined. Huawei reaching this crucial threshold — despite limited access to advanced fabrication tools — marks a turning point for its AI chip business, with the higher yields making its production line profitable for the first time.Challenges remain. Nvidia’s dominance is reinforced by its deeply entrenched software ecosystem and developer base, making a shift to alternatives difficult. Meanwhile, local chipmakers’ access to advanced manufacturing gear remains limited, meaning less efficient fabrication. Performance is another concern. Critics argue that Huawei’s chips lag behind Nvidia’s in performance per unit.However, a fundamental shift in the AI sector could work in Huawei’s favour. AI can be categorised into two markets: training — where AI models are created; and inference — where they are deployed to generate real-world responses. While training happens once, inference happens billions of times in real-world use. This shift towards inference-heavy workloads marks the next stage of competition for chip companies.For example, creating AI models such as OpenAI’s GPT-4 uses high-performance training chips. But once trained, deploying it to users requires a far greater number of lower-power inference chips. As AI inference becomes more prevalent, demand for cost-efficient chips will increase. In China, where AI chips are in short supply, Huawei may have an edge despite trailing Nvidia in performance. Scaling up the number of chips could help bridge this gap. Parallel processing allows multiple chips to work together, distributing the workload and combining results for the final output.Chinese tech giants such as Baidu and ByteDance are shifting to Huawei’s AI chips for deep-learning workloads, potentially setting a precedent for other countries seeking non-Nvidia alternatives.But the broader battle over chips extends far beyond Huawei. China, the largest chip consumer in the world, is a market Nvidia cannot afford to lose. Analysts estimate that last year alone, Nvidia made $12bn from 1mn H20 AI chips sold to China. That a single product generated revenue equivalent to nearly a tenth of the company’s annual total underscores how critical the Chinese market remains to Nvidia.Yet Washington’s greatest miscalculation may not be underestimating China’s chipmaking capabilities, but rather overlooking the forces that drive technological progress. History has shown that every industrial power that has tried to suppress a rival’s technological rise has, at best, delayed it — and at worst, accelerated it. Chips are no exception. The chip war is far from over, but in the long run, the US may have ensured that it is a war China cannot [email protected] More

President Trump has offered a mix of reasons for upending global trade relations, baffling and angering America’s biggest trading partners.President Trump made one of the biggest gambles of his presidency Tuesday by initiating sweeping tariffs with no clear rationale on imports from Canada, Mexico and China, triggering a trade war that risks undermining the United States economy.His actions have upended diplomatic relations with America’s largest trading partners, sent markets tumbling, and provoked retaliation on U.S. products — leaving businesses, investors and economists puzzled as to why Mr. Trump would create such upheaval without extended negotiations or clear reasoning.Mr. Trump has offered up a variety of explanations for the tariffs, saying they are punishment for other countries’ failure to stop drugs and migrants from flowing into the United States, a way to force manufacturing back to America and retribution for countries that take advantage of the United States. On Tuesday, he cited Canada’s hostility toward American banks as another reason.Canadian Prime Minister Justin Trudeau said it was difficult to understand Mr. Trump’s rationale for the tariffs but posited that his intent was to cripple Canada. “What he wants is to see a total collapse of the Canadian economy, because that’ll make it easier to annex us,” Mr. Trudeau said during a news conference on Tuesday. “That’s never going to happen. We will never be the 51st state.”Howard Lutnick, the commerce secretary, said Tuesday afternoon that the president might reach some sort of accommodation with Canada and Mexico and announce it on Wednesday. “I think he’s going to figure out, you do more, and I’ll meet you in the middle some way,” Mr. Lutnick said.Canada announced a series of retaliatory tariffs on $20.5 billion worth of American imports, and Mr. Trudeau said that other “non-tariff” measures were forthcoming.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Prime Minister Justin Trudeau of Canada warned that the Trump administration’s tariffs were leading to a trade war. Mexico’s leader vowed to impose countermeasures on Sunday.Sweeping tariffs imposed by President Trump threatened economic upheaval for consumers and businesses in the United States on Tuesday as the country’s biggest trading partners struck back, raising fears of a burgeoning trade war.Canada and China swiftly condemned the U.S. tariffs and announced retaliatory tariffs against American exports. President Claudia Sheinbaum of Mexico said that if the U.S. tariffs were still in place on Sunday, she, too, would announce countermeasures.“This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners,” Prime Minister Justin Trudeau of Canada said in a stern and, at times, biting address on Tuesday.The U.S. tariffs were a stark turnabout from the free-trade evangelism that has marked much of postwar American foreign policy. The measures amounted to 25 percent tariffs on all imports from Canada and Mexico and a 10 percent tariff on all imports from China. They came on top of a 10 percent tariff on Chinese goods put into effect one month ago and a variety of older levies, including those that remain from the China trade war during Mr. Trump’s first term.Amid the tariff dispute, the niceties and flattery that some foreign leaders had employed in the first weeks of the Trump administration seemed to fall away.Addressing Mr. Trump as “Donald,” Mr. Trudeau said at a news conference in Ottawa: “You’re a very smart guy. But this is a very dumb thing to do.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Facing the threat of tariffs from President Trump after he took office, Mexico bent over backward to comply with his demands.Almost immediately, the government moved to secure its northern border, severely stanching migration to the United States. Then it hunted cartel leaders in a dangerous fentanyl stronghold. And just last week, in a once-in-a-generation move, it delivered into U.S. custody 29 of the country’s most powerful drug lords.But even after all of that, Mr. Trump imposed the tariffs anyway, shaking global markets. The move left officials in both countries baffled about what the White House was trying to accomplish and frantically asking the same question: What was Mr. Trump’s endgame?Even some people close to the president seem to disagree on the answer.Some outside advisers predict that the tariffs, which are currently at 25 percent on most imports from Mexico and Canada, will result in a steady stream of revenue for the United States.Others maintain that they are Mr. Trump’s attempt to shake up the global order and flex his muscles on the world stage.Many believe that the president, who has seen trade deficits as a crisis for decades, is simply trying to follow through on a threat that he has dangled over Mexico for months. By pressing forward, they say, Mr. Trump is seeking to ensure that he is seen as tough among world leaders as he pushes his foreign policy agenda in other global hot spots, including Gaza and Ukraine.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More