Welcome to The Corner. In this issue, we explore how a deal by shipping giant MSC and BlackRock to buy dozens of port terminals from a Hong Kong-based operator will concentrate international trade in the hands of a single foreign corporation and threaten national security, despite the U.S. asset manager’s involvement.
U.S.-Brokered Deal with Hong Kong Ports Corporation Increases National Security Risk
Arnav Rao
Shipping giant Mediterranean Shipping Company (MSC) and asset manager BlackRock made headlines in early 2025 when they announced a deal to acquire 43 port terminals across 23 countries from Hong Kong-based CK Hutchison. At the time, Donald Trump declared the deal a win for the United States, claiming that the transaction would protect American exporters and importers from Chinese manipulation.
But upon closer inspection, the deal consolidates control of international trade by a single foreign corporation that is already the world’s largest ocean carrier, thereby creating a variety of new deep threats to U.S. national
interests. If completed, the transaction raises the risk that MSC will lock out competing shipping lines and pressure American businesses to use MSC’s ships and ports, raising prices and increasing supply chain fragility. In short, it will simply replace one threat to the U.S. economy and national security with another.
MSC, which is privately owned by Italian billionaire Gianluigi Aponte, currently operates an ocean-going fleet of around 900 vessels calling on more than 500 ports in 155 countries. If the deal with CK Hutchison is finalized, MSC would also become the world’s largest terminal operator, controlling nearly a tenth of global terminal throughput, thereby creating massive vertical
integration of ships and ports. The deal would also include strategically important terminals for the United States, including Balboa and Cristóbal, which control transshipment for the Panama Canal, a waterway that handles roughly 40 percent of all U.S. container traffic.
Importantly, MSC’s acquisition comes at a time when global ports have seen repeated bouts of congestion and while the order book for new ships
remains high, which could make congestion more frequent and severe. Given these dynamics, MSC has a strong incentive to use its vertical integration to give preferential access to its own ships or raise costs on rival carriers, ultimately raising costs for the public and increasing supply chain brittleness.
Shipping industry executives are already signaling discomfort that a direct competitor could soon control berthing priority, crane allocation, and gate access at some of the most strategically important ports in the global supply chain. As one executive told the Financial Times, “If you’re a shipping line and then your biggest competitor suddenly has all this [port] capacity, you’re naturally concerned because you don’t want to feed more revenue to your competitor, or risk that they’ll stop you coming or not give you the best berth windows.”
The vertical integration also creates problems for shippers
and consumers. As Australia’s competition watchdog noted, shippers have complained that “vertically integrated shipping lines are only offering shipping capacity to cargo owners if they also take up their logistics services.” And further, that vertical integration is squeezing “small and
medium freight forwarders for landside logistics, warehousing and customs clearance services out of the market.”
The U.S. government has also long been wary of vertical integration of shipping lines and terminal operators. A 2011 Department of Justice policy paper, for example, warned that when a terminal is controlled by a carrier it may permit the owner to raise rivals’ costs, restrict access, or favor its own downstream operations.
Traditionally, governments operated ports and terminals themselves rather than leaving them in the hands of private actors, precisely to prevent potential threats to their own national security and to domestic economies. But as governments began deregulating shipping in the 1980s and 1990s, they also began divesting their ownership of terminals. At first, terminals were mostly snapped up by independent stevedoring corporations, but beginning in the 2010s, shipping lines entered the terminal business.
History offers examples of what can happen when port neutrality breaks down. In the 1880s, China’s loss of control over its ports put it at the mercy of Western governments and commercial interests, contributing
to what the Chinese today bitterly remember as the “Century of Humiliation.”
Regulators across more than 50 jurisdictions, including the European Union, Panama, and China are reviewing the MSC/BlackRock deal for potential competition and strategic risks. Many have concerns. The administrator of the Panama Canal Authority, for example, said, “If there is a significant level of concentration on terminal operators belonging to an integrated or one single shipping company, it will be … inconsistent with neutrality.”
China, also recognizing the risks of vertical integration, has pushed for its state-owned shipping corporation, COSCO, to be included in the deal. Industry analysts expect the United States to press for COSCO’s exclusion, particularly from key Panama ports such as Balboa and Cristóbal. But even if it prevails on this point, the U.S still faces the prospect of being excluded from open access to world trade by private European corporations and governments.
📝 WHAT WE'VE BEEN UP TO:
- Open Markets Institute policy director Phillip Longman co-authored an article for Washington Monthly outlining
what’s needed to preserve Social Security, which faces insolvency in less than a decade, and to make the program more equitable for future recipients. Longman offered practical suggestions such as raising the income cap for Social Security taxes and taxing financial returns such as rental income and capital gains. But he also urged Democratic policymakers to go beyond such programmatic fixes. “They need to be able to tell voters that they are addressing the root causes behind why so many Americans now face insecurity in old age,” he wrote.
- The American Prospect published an article by Open Markets reporter Austin Ahlman profiling the Democratic candidates in a competitive race for Nebraska’s Second Congressional District. “The contest is set to defy the tidy progressive-vs.-moderate and establishment-vs.-insurgent
narratives that have defined other marquee primary races across the country,” Ahlman writes.
- The Center for Journalism & Liberty at Open Markets Institute lauded the European Commission for using the Digital Markets Act to investigate Google for anticompetitive conduct against news publishers in a move seen as defying the Trump administration’s pressure on Europe to halt regulation of digital platforms. “The
Commission’s concerns—that Google may be demoting news websites and failing to uphold its DMA obligations to apply transparent, fair, and non-discriminatory conditions in Google Search rankings—reflect yet another example of practices Big Tech firms like Google have repeatedly employed,” CJL@OMI director Courtney Radsch said in a statement.
- OMI transportation analyst Arnav Rao released a statement urging the Senate to halt confirmation proceedings for President Trump’s Surface Transportation Board nominees to replace STB Board member Robert Primus, whose illegal removal is seen as
helping to pave the way for a merger between Norfolk Southern and Union Pacific to create the nation’s first coast-to-coast rail corporation. “It is crucial that the Board adequately assess its potential impact on service, labor, and the prices of the countless essential goods that travel along our railways every day,” Rao said.
- The American Prospect quoted Open Markets legal director Sandeep Vaheesan in an article on the future of the Federal Trade Commission’s non-compete ban, issued by the agency during the Biden administration. “They want to kill this rule without having a political fight about it,” Vaheesan said of the FTC under Trump, which has failed to defend the non-compete ban in court. “They know the political fight will be extremely unfavorable.”
- Courtney Radsch, director of CJL@OMI, participated in the Canadian Technology Law Conference’s panel on “Supporting News and Quality Information.” The annual CTLC convenes leading experts to explore how emerging technologies are reshaping regulation, governance, and society.
- CNS Maryland quoted Open Markets transportation policy analyst Arnav Rao in an article report on Wall Street’s growing influence over the railroad industry. Rao criticized activist investors like Ancora for “pillaging” Norfolk Southern, saying the aim of activist investors is to “squeeze shippers … squeeze labor and then make a quick buck.”
- Open Markets legal director Sandeep Vaheesan was quoted by Truthout on the alarming takeover of utilities by private equity firms, driven by the boom in massive data centers. Drawing on his book
Democracy in Power: A History of Electrification in the United States, Vaheesan warned that private equity’s “extractive orientation” threatens to bring higher rates,
inferior service, and greater financial instability to essential public infrastructure—echoing the damage the industry has inflicted on retail and housing.
- The Guardian published an op-ed coauthored by Johnny Ryan, senior fellow at the Open Markets Institute, warning that the European Union is “hurtling toward digital vassalage.” Ryan argued that under European Commission President Ursula von der Leyen, enforcement of key tech regulations has stalled out of fear of offending the Trump administration—further entrenching the dominance of U.S. tech giants.
🔊 ANTI-MONOPOLY WINS:
- OpenAI lost a legal battle in Germany over claims the AI corporation broke copyright laws by illegally using song lyrics in model outputs without paying licensing fees. OpenAI is likely to appeal the decision. (DW)
- The European Commission opened an antitrust probe into Red Bull over concerns the Austrian energy drinks brand illegally hindered competition by persuading supermarkets and gas stations to restrict sales of rival energy drinks or put them in a disadvantaged location, helping to preserve Red Bull’s dominant market share. (Wall Street Journal)
- Google agreed to a settlement with Epic Games, which makes the popular Fortnite, in a longstanding antitrust lawsuit that challenged the tech giant’s app store monopoly rents. Under the terms of the settlement, Google will allow links to external payment systems and substantially lower its commission on app purchases and payments. (TechCrunch)
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📈 VITAL STAT:
$228.5 Million
The amount Sutter Health will pay three million small businesses and individuals to settle a class action lawsuit that alleged the northern California hospital system artificially drove up insurance premiums from the 1990s to 2020. (Reuters)
📚 WHAT WE'RE READING:
Paper Girl: A Memoir of Home and Family in a Fractured America — Award-winning journalist and author Beth Macy paints a compelling portrait of a middle-class midwestern town in crisis in the 2020s, rocked by the combination of a collapsing middle class, tech platform radicalization, and the rapid decline of local news and civic connection. While avoiding easy tropes, Macy tells a compelling story about the way our modern economy and information system is ripping apart the social fabric of once-vibrant communities.
Pre- Order Chief Economist Brian Callaci's new book:
Open Markets Institute’s chief economist Brian Callaci will publish his first book Chains of Command: The Rise and Cruel Reign of the Franchise Economy on April 20 through University of Chicago Press. The book offers a sharp critique of the franchise model used by many fast food chains, which has shaped labor markets, corporate power, and inequality in the U.S. In Chains of Command, Callaci shows how franchisors have altered the legal treatment of corporations in their favor through a decades-long crusade of lobbying and litigation, and argues for greater cooperation between workers and small franchise owners. Pre-order the book here.
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